The Obama administration has granted Shell permission to begin work in the Chukchi Sea; however, the permission applies only to initial site work and drilling in areas that are not oil-bearing.
Shell has been given the go-ahead to proceed with limited preparatory activities in the Chukchi Sea offshore Alaska, according to the Bureau of Safety and Environmental Enforcement (BSEE).
The news, delivered Aug. 30, restricts Shell to activities in zones that are not oil-bearing. These activities include the creation of a mudline cellar for the blowout preventer, a BSEE news release said. The company is also being allowed to drill and set the first two strings of casing into shallow non-oil-bearing zones.
“It is our highest priority that any activities that occur offshore Alaska be held to the highest safety, environmental protection, and emergency response standards,” BSEE Director James A. Watson said in the prepared statement. “Shell’s applications for permits to drill into potential oil reservoirs remain under review, and Shell will not be authorized to drill into areas that may contain oil unless and until the required spill containment system is fully certified, inspected, and located in the Arctic.”
Meanwhile, Shell has yet to secure Coast Guard approval for the company’s required containment system, although BSEE safety experts already have cleared the drillship and Shell’s response equipment.
The announcement is a sign of some forward movement for the company’s effort to drill in the Arctic. But it arrives as the drilling opportunity window continues to near its close this year. Due to the time crunch caused by permitting and regulatory delays along with the weather, Shell already had to reduce the number of wells it planned to drill to two -- one each in the Chukchi and Beaufort seas.
Despite the setbacks, Shell officials remained confident that it would be able to drill in the Arctic in 2012. Earlier in August, the company positioned drillings rigs and associated support vessels at Dutch Harbor, Alaska, the last deepwater port before transiting the Bering Strait and ultimately into the Chukchi and Beaufort seas.
At stake is about 90 Bbbls of oil, 1,669 Tcf of natural gas, and 44 Bbbls of NGLs, which may remain undiscovered in the Arctic, according to US Geological Survey estimates. Holding about 22% of the world’s undiscovered conventional oil and natural gas resources, the Arctic continental shelves may be the largest unexplored area for petroleum left in the world.
Responding to BSEE’s decision, Shell released a statement, saying “The administration’s decision to approve initial drilling into non-oil-bearing zones in the Chukchi Sea reflects the national importance of exploring the energy resource offshore Alaska. Once the Noble Discoverer drillship reaches its [well] location, it will connect with anchors that have been pre-staged in the Chukchi Sea and work will commence.
“Shell has dedicated more than six years to gain the confidence and trust of regulators and to earn the right to begin this historic operation. ... In the weeks ahead, we look forward to operating safely and responsibly, putting Americans to work and finding out even more about the oil and gas reserves that are believed to lie under Alaska’s Chukchi Sea,” the company emphasized.
Contact the author, Velda Addison, at vaddison@hartenergy.com.
