With the clock ticking on a short season for Arctic drilling, Shell Oil Co. is
facing a triple threat of complications in its quest to explore for oil this
year off Alaska's northern coast.
Sea ice is lingering a bit longer than usual. A problem with a permit regulating air pollution on one of its drill ships remains unresolved. And an oil spill containment barge still isn't ready.
Shell remains confident it will be able to work in its Arctic drilling sites this year, said Pete Slaiby, the Shell vice president who oversees Alaska.
"We are still planning to move ahead," Slaiby said Thursday evening in a brief telephone interview. "It's absolutely possible."
Shell hopes to begin drilling in August, the first exploration in the offshore region in two decades. But it won't have much time when it gets there for drilling wells that could take a month each. The stakes are huge. Shell has invested more than $4 billion in leases, vessels and other special equipment for its Arctic mission.
Under exploration plans approved by the federal Bureau of Ocean Energy Management, it must suspend drilling "in known hydrocarbon zones" by Sept. 24 in the Chukchi Sea and by Oct. 31 in the Beaufort Sea. It could seek to extend those dates, but so far hasn't given any indication it intends to do that, according to the federal agency.
Shell already has scaled back and no longer is aiming to drill the five wells it once planned for this year, Shell spokesman Curtis Smith said this week. The new number hasn't been set, he said.
BARGE WITH PURPOSE
Shell's novel oil spill containment barge, a critical vessel that regulators say must be in the Arctic for drilling to begin, remains under construction at a shipyard in Bellingham, Wash. Shell, through its contractor Superior Energy Services, is retrofitting a 38-year-old barge, now called the Arctic Challenger.
"It's not complete yet," said Coast Guard Cmdr. Christopher O'Neil, the agency's lead spokesman. Fire suppression systems and electrical wiring are among the elements being checked, he said.
"We're still inspecting construction as it's completed, systems as they are ready for our inspection," O'Neil said. "It's almost an around-the-clock operation at this point, so that's really moving ahead."
A sticking point is how the vessel will be classified by the American Bureau of Shipping, a process that must be complete before the Coast Guard can issue a final certificate of inspection, O'Neil said. The barge will carry a containment dome engineered by Shell that could be lowered to a wellhead in the event of a spill. Oil would travel from the dome through an attached hose back to the barge, where it would be separated from seawater and the gas would be flared.
Shell originally proposed classifying the vessel as a stationary offshore production platform, but then it would have to be able to stand up to a 100-year storm. That doesn't make sense for a vessel that is mobile and could get out of the way of a rare, giant storm, said Smith.
Shell then proposed classifying the vessel as a mobile offshore drilling unit, able to handle a 10-year storm. But it may now be seeking to have it evaluated as a different type vessel, O'Neil said. The American Bureau of Shipping declined to comment and Smith said if that proposal had changed, he
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