Shell begins arctic drilling after ‘hiccups’

OREANDA-NEWS. August 03, 2015. Shell has started drilling the top portion of an exploratory well on its Burger prospect in the Chukchi sea off the north coast of Alaska, its first return to US arctic waters since 2012.

The Transocean drilling rig Polar Pioneer began work yesterday on the Burger J well and plans to drill to depth once the icebreaker MV Fennica returns from repairs in Portland, Oregon. US regulators issued permits that prevent Shell from drilling into hydrocarbon-bearing zones until the icebreaker returns, as the ship is carrying the capping stack that would capture oil if there was a blowout.

The start of drilling in the Chukchi sea comes after a series of early setbacks to this year's arctic drilling program that Shell chief executive Ben van Beurden described yesterday as "hiccups."

US regulators in late June prevented Shell from simultaneously drilling two wells during the short arctic drilling season that ends on 28 September, citing concerns about disturbing walruses. Then the MV Fennica hit an uncharted shoal on its way to the Chukchi sea. The icebreaker returned to Portland for repairs but yesterday was temporarily delayed from departing by environmental activists.

More than a dozen activists from Greenpeace were hanging off ropes from a bridge in the path of the icebreaker. Authorities eventually forced the activists to leave, but not before a federal judge ordered Greenpeace to pay sanctions of \\$2,500 for each hour the activists stayed on the bridge. Shell said the icebreaker is now in transit to the arctic.

Shell's drill ships and most of its fleet are now in place, van Beurden said on the earnings call yesterday. The icebreaker should arrive in the Chukchi sea before the company plans to apply for a modified permit that would let it drill into hydrocarbon-bearing zones, he said.

"Everything is basically going on schedule as planned," he said.

Shell is permitted to drill up to two wells in the arctic, but yesterday van Beurden said the company planned to drill one well this season. Shell did not respond for comment on whether its drilling plans changed, but said its plan is "to make as much of the time we have in theater before the sea ice arrives."