With only a partial summer’s drilling program completed last year, Royal Dutch Shell plc now plans to pause exploratory drilling activity this year offshore Alaska in the Beaufort and Chukchi seas.

The delay, announced last week, is to prepare equipment and set plans to resume activity at a later time.

“We’ve made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way,” said Upstream Americas Director Marvin Odum. “Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”

To date Shell has spent more than $5 billion and nearly a decade preparing to drill in Alaska’s cold waters. Following years of delays and millions of dollars in planning, the operator last year secured the required permits and equipment needed to drill, and it was the first producer in more than 20 years given permission to drill in offshore Alaska. However, the oil major faced setbacks from the start of last year’s program.

In July, officials scaled back initial plans to drill up to five wells and instead set a course to drill only two offshore wells, in part because of construction delays on an emergency spill containment vessel (see NGI, July 30, 2012). Federal officials then gave the operator the green light to begin “limited” drilling in the Chukchi (see NGI, Sept. 3, 2012). However, just one day after it began drilling, Shell halted operations because sea ice had begun moving toward a drillship, and days later it halted Chukchi drilling for the year after a containment system was damaged by ice (see NGI, Sept. 17, 2012). In early October drilling began at the Sivulliq prospect in the Beaufort, but all drilling was halted by the end of the month.

Shell completed top-hole drilling on two wells last year in the Beaufort and Chukchi seas safely, with no serious injuries or environmental impact, the company noted. However, as the Noble Inc. Kulluk drilling rig, which was used in preliminary drilling, was being towed to port, it separated on New Year’s Eve from a tow vessel and grounded on an uninhabited Alaska Island. Shortly thereafter, the Department of Interior launched a high-level assessment of Shell’s Alaska program (see NGI, Jan. 14). The Kulluk and the second drilling rig, the Noble Discoverer, were being towed to locations in Asia this year for maintenance and repairs, according to Shell.

“Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators, and meets the high standards the company applies to its operations around the world,” said Odum.

“We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area. Alaska remains an area with high potential for Shell over the long term, and the company is committed to drill there again in the future,” officials said. “If exploration proves successful, resources there would take years to develop.”

In response to Shell’s announcement, Alaska’s Republican Sen. Lisa Murkowski said she had been “a strong supporter of Shell’s activities in the waters off Alaska’s northern coastline and in energy exploration in general, but I have always said that it must be done to the highest safety standards. Shell’s decision to postpone this summer’s exploratory drilling program shows that it shares that commitment to safety.

“This pause — and it is only a pause in a multi-year drilling program that will ultimately provide great benefits both to the state of Alaska and the nation as a whole — is necessary for Shell to repair its ships and make the necessary updates to its exploration plans that will ensure a safe return to exploration soon.”

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