The Joplin Globe, Joplin, MO

Business

September 17, 2012

Shell scales back Alaska offshore drilling efforts until next year

Shell Alaska said Monday it has abandoned its efforts to drill into hydrocarbon deposits in the offshore Arctic after the latest in a series of glitches on the company’s troubled oil containment barge resulted in damage to the high-tech dome designed to contain oil in the event of an underwater spill.

Company officials said they will continue to drill “top holes” off the Alaskan coast through the end of this season’s drilling window, but will not attempt to reach any oil deposits this year - a serious but not fatal setback for the company, which has spent six years attempting to explore its outer continental shelf leases off the coast of Alaska.

“This critical program ... could be an important national resource for the next several decades, and we are committed to doing it safely and responsibly,” Shell spokeswoman Kelly op de Weegh said in a statement to the Los Angeles Times. “We’re not going to rush things for the sake of a few days this season.”

The latest setback involves the oil containment barge, the Arctic Challenger, which has been delayed in Bellingham, Wash., undergoing a trouble-plagued retrofit overseen by Superior Marine Technical Services, a Shell contractor.

The vessel has been unable for weeks to win U.S. Coast Guard certification, following problems with some onboard safety systems, along with trouble fixing good stowage for the ship’s anchor chocks and the boom designed to flare gas in the event of a spill. Coast Guard officials documented four minor illegal fluid discharges from the vessel while it was moored in Bellingham.

Federal authorities have not allowed Shell to plumb into hydrocarbon deposits until the barge is on site in the Arctic, but the multimillion-dollar upgrade has been delayed with one problem after another while attempting to win certification from the Coast Guard.

The refurbishment was completed last week and the vessel underwent sea trials in Washington’s Puget Sound, and a series of tests were successfully completed on the newly designed Arctic containment system, Op de Weegh said.

“However, during a final test, the containment dome aboard the Arctic Challenger barge was damaged,” she said.

Sources familiar with the testing said the mishap occurred when one of several clump weights was placed into about 160 feet of water to mark the area of a theoretical oil spill, to see if the containment dome aboard the barge could be lowered over it.

“When they came back to find it, it (the weight) was lost, submerged into the silt,” said one source, who spoke on condition of anonymity because he was not authorized to discuss the operation.

Engineers launched a mini-submarine known as a Remotely Operated Vehicle, which is part of Shell’s plan for putting any oil spill containment equipment into place, to help get the oil containment dome carried aboard the Challenger set over the “leak.”

“They got some of the weights set to hold the dome, then one of the eight winches on the dome became inoperative,” the source said. “They attempted to discover what was wrong by using the ROV, and got it tangled in the anchor lines of the dome and it sank into the silt.”

Divers were then dispatched to the sea floor to try to recover the dome without damaging the high-tech umbilical that controls it, he said.

It was not clear how much damage the dome ultimately suffered, but it apparently was enough to prompt Shell to abandon its well-drilling plans for the current season.

Coast Guard spokesman Lt. Paul Rhynard, in an email to The Times on Friday, acknowledged that there were “ROV issues” during the testing but said they had no bearing on Coast Guard certification of the vessel.

Still, Shell officials said they would be able to drill “top holes” on some wells in order to be ready to quickly commence operations in the summer of 2013.

“We will begin as many wells ... as time remaining in this season allows,” Op de Weegh said. “The top portion of the wells drilled in the days and weeks ahead will be safely capped this year, in accordance with regulatory requirements.”

Shell had commenced drilling an initial well in the Chukchi Sea earlier this month, but was forced to shut down the operation and move away when a large ice floe began approaching.

The ice has proceeded southwesterly and company officials said they are hopeful they can reposition the rig and commence drilling again in the next day or two.

In the Beaufort Sea, Shell is awaiting the conclusion of the fall Inupiat Eskimo whaling season, which could end as early as this week, before launching drilling operations there.

 

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