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Shell Arctic drilling programme in doubt because of need for rig repairs

19 February 2013

Shell has said its Arctic drilling campaign this summer is in the balance because of problems with the two drillships involved in the project. The Kulluk drilling rig went aground off Alaska on New Year’s Eve and was battered by storms for several days before it could be towed off, and there have also been issues with its second drillship, the Noble Discoverer.

The Kulluk being towed off Alaska
The Kulluk being towed off Alaska

Its exploration plans for 2013, announced in late January, showed it was still intending to resume the work. It has so far spent nearly $5bn on its Arctic campaign without yet reaching potentially oil-bearing rocks. 

Shell said on February 11 that ongoing evaluations of the condition of the Kulluk had led it to determine the rig would now need to be dry towed to a shipyard in Asia with a suitable dry dock.

The Noble Discoverer will also be towed from Alaska to a shipyard in Korea. The US Coast Guard highlighted a series of problems with safety management and pollution control systems on the Noble Discoverer, which is leased by Shell.

Shell said it had “not made any final decision on 2013 drilling in Alaska”, but that “the outcome of further inspections for both rigs will determine the shipyard schedule and timing of their return to service.”

As well as the problems with the rigs, Shell’s 2013 plans could also be threatened by the outcome of a high-level review by US authorities into its 2012 campaign, and by a US Coast Guard review.

“It’s too soon to know what the outcomes of those investigations will be,” Shell said. “In the meantime, we are exploring a range of options for exploration work offshore Alaska in 2013.

Shell says it remains committed to safely exploring for Alaska’s offshore energy resources.

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