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Shell ends 2012 Arctic Ocean drilling off Alaska

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Posted: Wednesday, October 31, 2012 11:59 am

ANCHORAGE, Alaska - Shell Oil's flotilla of Arctic Ocean vessels is heading for warmer waters.

Royal Dutch Shell PLC announced that it concluded exploratory drilling on Wednesday, its mandatory cutoff date before winter. It completed preliminary drilling at one well at the Burger-A Prospect 70 miles offshore in the Chukchi Sea and one at the Sivulliq Prospect 18 miles offshore in the Beaufort Sea.

"We're looking forward to revisiting these wells as soon as we can next year," Shell Alaska spokesman Curtis Smith said by phone from Prudhoe Bay.

The end of drilling by Shell's two drill ships and about 20 support vessels wraps up a tumultuous season that saw the company penetrate the ocean floor for the first time in more than two decades, finally making progress on an Arctic offshore investment of more than $4.5 billion, including $2.1 billion for Chukchi leases in 2008.

Shell began initial drilling but was prohibited from extending the wells into petroleum reservoirs until it could stage a spill response barge near the exploratory wells. But there were problems getting the spill barge certified by the Coast Guard. Another complication was the continued protest by environmental groups that contend oil companies cannot clean up a spill in waters choked by, or covered by, sea ice.

"This year showed to all of us that even one of the world's biggest companies wasn't ready to move forward in the Arctic," said Mike Levine, an attorney for Oceana, from his office in Juneau.

A Shell drill ship pulled its anchor and nearly ran aground at an Aleutians Island port, Levine said, and the company damaged its new containment dome as it tested its spill response barge off the coast of Washington state.

Less than 24 hours after drilling began Sept. 9 in the Chukchi, Shell moved it drill ship as a precaution because an ice floe 30 miles long and 12 miles wide was heading toward the prospect.

"These problems don't give us confidence that this company is ready to pursue a massive industrial undertaking in one of the remotest places on the planet," Levine said.

The company considers the season a success, Smith said. Moving off a well to dodge ice moving in from a hundred miles away demonstrated the company's Arctic preparedness, he said. Lessons learned from rotating hundreds of workers onto vessels and managing equipment in cold weather will be used to drill up to 10 exploratory wells during the multi-year project, he said.

Shell this year completed two top holes that will be the foundation for a pair of exploratory wells. Top holes consist of mud-line cellars 20 feet in diameter and 40 feet deep that provide protection from ice for a blowout preventer, plus a hole drilled to about 1,500 feet. Drill ships next year will uncap the top holes and drill to oil-bearing rock.

Shell contends that a spill is unlikely in the relatively shallow Arctic waters and that its response gear would quickly address a blowout.

Levine said a response to a blowout like BP PLC's disaster in the Gulf of Mexico would be hindered by the Arctic's storms, wind, ice and darkness. The federal government, he said, is not keeping its commitment for safe drilling.

"We're seeing a government agency that in large part has ignored those realities and bend over backward to allow Shell to undertake these activities," he said.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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