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US Government launches probe into Shell's Arctic oil programme

11 January 2013

The US Interior Department has launched a high-level review of Shell’s troubled 2012 Arctic drilling campaign, which could place the company’s plans to explore for oil in the region into doubt. A string of equipment failures affected the company’s 2012 Arctic season, culminating in the grounding of its Kulluk rig off Alaska on New Year’s Eve.

Shell's other drillship in the Arctic, Noble Discoverer, went adrift in July 2012 and suffered an engine room fire in November
Shell's other drillship in the Arctic, Noble Discoverer, went adrift in July 2012 and suffered an engine room fire in November

The rig has been refloated and taken to a safe anchorage, but reports on January 10 claimed that hundreds of gallons of fuel may have leaked from lifeboats during the grounding.

There were also problems with the company's Arctic oil spill response barge and containment equipment, and the US Coast Guard is investigating “deficiencies and maintenance issues” aboard another rig used by Shell in the Beaufort Sea, the Noble Discoverer, which suffered a fire in its engine room in November 2012.

The Interior Department said it would “assess Shell’s performance in the Arctic’s challenging environment” and the results of the expedited review would “help inform future permitting processes in the region”. Shell was planning to resume drilling this summer but must first secure a series of permits from Department agencies.

Ken Salazar, the US Interior Secretary, said the administration was “fully committed to exploring for potential energy resources in frontier areas such as the Arctic” but that “the unique challenges posed by the Arctic environment demand an even higher level of scrutiny”.

He said: “It’s troubling that there was such as series of mishaps. There is a troubling sense…that so many things went wrong.”

A Shell spokesman said the company welcomed the review. “While we completed our drilling operations off the North Slope safely and in accordance with robust permitting and regulatory standards, we nevertheless experienced challenges in supporting the program – especially in moving our rigs to and from the theatre of operations.

"We have already been in dialogue with the DOI on lessons learned from this season, and a high level review will help strengthen our Alaska exploration program going forward.”

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