Royal Dutch Shell, which has spent nearly $5 billion over the past seven years to drill in Alaska's offshore, suspended its plans to drill for oil and natural gas in Arctic waters this year due to damage to a containment system caused by sea ice.

The announcement came about a week after the containment dome aboard Shell's Arctic Challenger barge, which would contain crude oil, was damaged by ice in the Chukchi Sea. The accident occurred only one day after Shell began drilling in the Chukchi Sea (see Daily GPI, Sept. 12). "The time required to repair the dome, along with steps we have taken to protect local whaling operations and to ensure the safety of operations from ice floe movement, have led us to revise our plans for the 2012-2013 exploration program.

"In order to lay a strong foundation for operations in 2013, we will forgo drilling into hydrocarbon zones this year. Instead, we will begin as many wells, known as 'top holes,' as time remaining in this season allows. The top portion of the wells drilled in the days and weeks ahead will be safely capped and temporarily abandoned this year," the major oil and gas producer said.

"I'm disappointed with the news, but believe Shell has made the right decision, keeping safety paramount," said Sen. Lisa Murkowski of Alaska, the ranking Republican on the Senate Energy and Natural Resources Committee.

Shell did not say how long it would take to repair the containment dome. "It is clear that some days will be required to repair and fully assess dome readiness," the company said.

The Noble Discoverer, one of the two drill ships leased by Shell for its historic Alaska drilling campaign, had begun digging a top hole of the "Burger A" well prospect on Sept. 10, which was in the direct path of potentially encroaching sea ice. The drill ships and support vessels were safely removed from the path of the ice. The Noble Discover "is expected to resume its position and drilling operations over the 'Burger A' prospect in the days ahead," Shell said.

"Also, in the coming days, Shell is expected to begin exploratory drilling in the Beaufort Sea," the company said.

Sea ice hasn't been the only challenge facing Shell. It also has been beset by legal challenges from stakeholder and conservation groups, as well as a project makeover required by new regulations enacted following the Macondo well blowout in the deepwater Gulf of Mexico.

Shell joins BP plc, which in July scuttled a cutting-edge drilling project in the shallow waters of Alaska's Beaufort Sea after an internal review concluded that the endeavor should not go forward as designed (see Daily GPI, July 11).

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