Shell's Arctic drilling ambitions delayed

Shell has spent six years attempting to explore for oil and gas in the Arctic. After finally receiving approval for limited drilling, the company has been forced to forgo its plans for another season.

Oil spill response crews run drills from the Nanuq response vessel near Valdez, Alaska.

Shell has abandoned plans to drill in oil-bearing zones in the Arctic this year after a containment dome designed to shut in oil in the event of an underwater spill was damaged during a test.

The time required to repair the dome, ice floe movements and the fall Inupiat Eskimo whaling season led Shell to revise its 2012-2013 exploration program and forgo plans to drill in hydrocarbon deposits this year. Instead, the company will begin as many wells, known as "top holes" as time remaining in the season allows, Shell said in a statement.

The top portion of the wells drilling in coming weeks will be capped and temporarily abandoned this year, Shell said.

Shell has been trying for six years -- and has spent billions in the process -- to explore its outer continental shelf leases offshore Alaska. The company has run into a number of regulatory hurdles and delays with a retrofit of its oil containment barge, the Arctic Challenger. Shell can't begin its oil exploration drilling until the barge is on site in the Arctic.

Shell did begin drilling earlier this month in the Chukchi Sea, but has since been delayed by ice floe movements. Shell also has it drill rig Kulluk waiting outside the whaling blackout area in the Beaufort Sea.  The company is expected to resume exploratory drilling there once the hunt ends.

Last month, the Obama Administration approved Shell to begin limited drilling in the Arctic waters off of Alaska's northern coast. The approval announced by the Bureau of Safety and Environmental Enforcement allows Shells to start certain preparatory activities in the Chukchi Seas that will increase safety. The activities included the creation of a mudline cellar, a safety feature

Photo: Shell


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