Shell confident about Arctic efforts

10/1/2012

ANCHORAGE, Alaska — The stars lined up — almost — for Shell Oil to drill exploratory wells this year in waters off Alaska’s north coast.

The Arctic Ocean was on record pace for low sea ice. The Obama administration gave a qualified green light to drilling. Two drill ships and a flotilla of support vessels were staged off prospects.

But as the roughly four-month open water season wound down, Shell announced last week it would limit drilling to “top-hole” work, the shallow but time-consuming preparation for an offshore well. The final straw for the decision: damage during testing Sept. 15 to an undersea containment dome, part of a spill response system that Shell put in place to reassure federal regulators that Arctic offshore drilling could be done safely.

Environmentalists cheered the setback.

Shell Oil President Marvin Odum says he considers it a temporary impediment in the long-term quest to open a petroleum frontier.

“I think you can hear the enthusiasm in my voice, both for what’s been accomplished this year and what we will do moving into 2013,” he said after the decision.

Royal Dutch Shell PLC has spent $4.5 billion on Arctic offshore drilling, moving ahead in fits and spurts to overcome delays from court challenges and the added scrutiny that followed BP’s Deepwater Horizon blowout in the Gulf of Mexico.

Odum said glitches were expected and the payoff from significant resources in the Chukchi and Beaufort seas will make the trouble worthwhile.

“If they prove up the way we hope they will, and the way the U.S. government thinks they may, then this will be very much worth all our time and effort,” he said. “There is still great enthusiasm for that.”

(The Chronicle Herald)