Daily GPI / NGI The Weekly Gas Market Report / Regulatory / NGI All News Access

Shell Revises Chukchi Sea Plan, Could Return Next Summer

Royal Dutch Shell plc on Thursday filed revisions to its previously approved Chukchi Sea Exploration Plan with the Bureau of Ocean Energy Management (BOEM). The company could return to Arctic exploration next year.

"The filing should not be seen as a final decision to drill next summer but it does preserve the option," the company said in an email. The plans have not been released by BOEM.

"If we drill in 2015, the program will consist of two drilling rigs working simultaneously at Shell's Burger prospect in the Chukchi Sea: the Noble Discoverer and the Polar Pioneer (owned by Transocean)," said spokesman Curtis Smith. "In addition to a new rig, we have fortified our fleet with more anchor handlers, new tugs and additional offshore supply vessels. We've also added an extra helicopter to the rotation."

Smith said the revised program "places more emphasis on integrated planning and additional marine protocols. It also means refocused contractor management and better organizational alignment. We're taking a methodical approach in the months ahead and we need to see progress on a number of fronts -- including successful resolution to the supplemental environmental impact statement (SEIS) BOEM is working on now."

The U.S. Court of Appeals for the Ninth Circuit in January ruled that the U.S. Minerals Management Service, the predecessor agency to BOEM, may have used inadequate information regarding available reserves and environmental risks for Chukchi Sea Lease Sale 193 held in 2008, and it kicked the issue back to Alaska's district court (see Daily GPI, Jan. 23; Feb. 8, 2008). The circuit court ruling reinstated one against the government that favored several conservation groups and Alaska stakeholders.

The Chukchi had been estimated to hold around 1 million bbl of economically recoverable crude. However, the Ninth Circuit said the estimate was chosen arbitrarily. Following the circuit court ruling, the Obama administration and Shell asked the district court to allow federal revisions to be made through an SEIS (see Daily GPI, April 10). Shell, the biggest leaseholder in Chukchi and the Beaufort seas, so far has invested close to $6 billion in Alaska's offshore with little to show for its effort.

A draft SEIS now is set for publication in October, to be followed by a public comment period. A final SEIS could be issued in February (see Daily GPI, May 27).

Shell has stepped back from Arctic exploration following some mishaps in the region. One of these was the grounding of Mobile Offshore Drilling Unit Kulluk on the eastern coast of Sitkalidak Island, Alaska, in late December 2012. The grounding was mainly due to a failure of personnel to assess and manage the risks of towing the rig in heavy seas, the U.S. Coast Guard said in a report on the incident issued earlier this year (see Daily GPI, April 4).

Recent Articles by Joe Fisher

Comments powered by Disqus