Shell's plan for 2014: returning to the Chukchi Sea.

AuthorBradner, Mike
PositionOIL & GAS

Shell has hopes to return to the Arctic the summer of 2014 to finish two wells the company started in 2012. Shell was able to begin drilling on two exploration prospects that summer, "Burger" in the Chukchi Sea and "Sivulliq" in the Beaufort Sea, and had hoped to return in 2013 to finish those and drill more wells.

That did not happen. The company's plan was disrupted by the loss of the drillship Kulluk in a marine accident when the conical vessel went aground off Kodiak December 31, 2012, after being caught in a storm.

The Kulluk, which is owned by Shell, was damaged to the extent that it could return to the Arctic in 2013 or in 2014, the company said. Marine industry sources say the drillship is a total loss, in fact.

Without the presence of a second drill vessel to lend support in an emergency to the company's other drillship, the Noble Discoverer, Shell was unable to deploy for a 2013 Arctic drill season.

Pending New Rules

The company is now aiming at scaledback program in 2014, focusing only on the Chukchi Sea. Shell has filed an amended Plan of Exploration with the US Bureau of Ocean Energy Management, or BOEM, for its proposed 2014 program.

The latest plan is for the Noble Discover, which had had extensive modifications, to return and be accompanied by a different drilling vessel for standby, the Polar Pioneer, a "harsh weather" semi-submersible offshore drill rig owned by Transocean Ltd.

In December BOEM asked for clarifications of certain parts of Shell's exploration plan. Once the plan is deemed "complete," and the items questioned are clarified to the agency's satisfaction, it is then released for public comment.

There are other uncertainties for Shell, however. One is a pending set of new federal rules for Arctic offshore drilling set to be released early in the new year by the Bureau of Offshore Safety, BOEM's sister agency in the Interior Department. Shell will await those rules before making any decision to actually deploy its fleet and drill in 2014.

Meanwhile, two other companies are preparing for drilling in the Chukchi Sea, ConocoPhillips and Statoil, are waiting to see what happens to Shell before making any commitments on drilling. Officially, ConocoPhillips still says it plans to drill in 2014. Statoil, the Norwegian company, has a schedule that calls for drilling in 2015. However, both companies have said that those plans could change. The same uncertainties that face Shell, such as the pending new offshore rules, affect them as well.

The problems Shell encountered in 2012 are well documented. Although the company had successfully and safely drilled Chukchi Sea offshore wells in the early 1990s, the federal...

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