[B][FONT=inherit]Shell prepares Arctic drilling plan but is uncertain about 2014[/B]
[FONT=inherit]Published: October 31, 2013 [/FONT]
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[FONT=inherit][FONT=inherit]By DAN JOLING — Associated Press[/FONT]
[FONT=inherit][FONT=inherit]ANCHORAGE, ALASKA — Royal Dutch Shell PLC will submit an Arctic offshore exploration plan for waters off northern Alaska but has not made a final decision on whether to drill in 2014, the company announced Thursday. [/FONT]
Chief Financial Officer Henry Simon announced third quarter earnings and answered questions about 2014, according to a transcript of the press conference.
“Alaska is very much top of the priority list,” he said.
The company will drill only in the Chukchi Sea of Alaska’s northwest coast if the decision is made to move ahead in 2014, Simon said. The company does not have a drill vessel ready for the shallow Beaufort Sea off Alaska’s north coast. The vessel used in 2012, the Kulluk, ran aground near Kodiak Island on its way to a shipyard after the drilling season last year and may never be used again, Simon said.
“The Kulluk we do not expect, in fact we are not sure that we will necessarily bring the Kulluk back into operation,” Simon said.
The company would drill in the Chukchi with the same ship it used in 2012, the Noble Discoverer, Simon said, backing it up with a new rig, the Transocean Polar Pioneer, which could drill a relief well if a blowout occurred, as required by federal regulators.
Environmental groups oppose artic offshore drilling, saying oil companies have not demonstrated they can clean up a major spill in ice-choked waters. They say Shell demonstrated in 2012 that oil companies are not prepared to deal with cold, dark conditions hundreds of miles from infrastructure that supports drilling in other regions and that not enough is known about the Arctic ecosystem to allow industrial development.
“As other companies appear to recognize, they simply are not ready to operate in the harsh and remote Arctic Ocean environment,” said Susan Murray of Oceana in a prepared statement. "There is no proven technology that would allow companies to drill safely in Arctic Ocean conditions, and the risks far outweigh any potential benefits."
Shell drilled in both the Chukchi and the Beaufort in 2012 but suffered serious setbacks, culminating with the grounding of the Kulluk.
The Noble Discoverer was detained in Seward after the drilling season and investigated for safety violations.
Repairs for the vessels led the company to decide to do no Arctic offshore drilling in 2013. Both vessels were transported to shipyards in Asia and Shell has spent about $200 million on the Kulluk.
Shell subsidiaries in September agreed to pay fines of $1.1 million as part of a settlement with the Environmental Protection Agency for air quality violations from the two drill vessels or their support fleet.
The exploration plan will be a multi-year project, Simon said.
“Clearly we would like to drill as soon as possible, so we are putting the building blocks in place,” he said. "We expect to know that our kit will be ready and available early 2014, but there remains permitting and regulatory process through which we need to go before we can confirm a decision to drill in 2014."
The water of the Beaufort prevents a normal rig from operating there, he said, but the Chukchi has more potential.
“Our focus would be very much on the Chukchi, which is by far the biggest prize; that is the multi-billion barrel prize,” he said.
Shell Oil said Thursday that it would try - again - to drill for oil in the Chukchi Sea off Alaska’s Arctic coast, where last year ice and late permits forced its rigs to abandon the area without completing a well.
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In the summer of 2012, however, Shell was thwarted by ice and trouble meeting permitting standards. Later, on its way to a warm water port, one of Shell’s drill ships, the Kulluk, ran aground and later needed repairs.
Problems with ice? Solution: Replace the world’s most ice-capable drilling rig (Kulluk) with a semisub that has no ice class whatsoever and, due to design, requires more ice management than the conical unit.
[QUOTE=z-drive;123717]Yes, I love the fact they have foreign vessels working there and nobody seems to care since its the arctic! Out of sight, out of mind![/QUOTE]
Last time I was there, only the vessels that have no equivalent in the US-flagged fleet were of foreign origin. The Swedish icebreaker Tor Viking II was needed because there were two drilling units but only one US-flagged icebreaking AHTS (Aiviq), and the Finnish icebreakers Fennica and Nordica were used for ice management because there are no American vessels that come even close in terms of operational capability in ice.
Apparently the Jones Act exemption will expire in 2017, so by then there should be enough US-flagged icebreaking vessels to do the job (if drilling in the Arctic continues). What kind of ships would you guys like to see there, from technical point of view? More rather conventional ships like Aiviq, or something like the new Russians PSVs working in Sakhalin?
[QUOTE=“z-drive;123717”]Yes, I love the fact they have foreign vessels working there and nobody seems to care since its the arctic! Out of sight, out of mind![/QUOTE]
There was a 5 year waiver in the USCG budget 2 or 3 years ago allowing this. Not sure if they extended it or not. Thank congress for that. They care, because they got money in their pockets for that favor to eff us in the a**.
[QUOTE=BMCSRetired;123726]Thank congress for that. They care, because they got money in their pockets for that favor to eff us in the a**.[/QUOTE]
FUCK! Are you kidding? The USCG is continuing to FUCK US IN THE ASS in the GoM. Nothing has changed at all down here. There are foreign vessels all over the place. Saw a huge flex pipelayer working near SE Pass area which I could not identify by sight but which had its AIS turned off! THE BULLSHIT here is hip deep and getting deeper all the time…soon it will be up to our eyes!
THE US MARINER IS GOING TO CONTINUE TO GET FUCKED IN THE OFFSHORE UNTIL THE DAY THAT WE ALL UNITE AND SAY “NOT ANY FUCKING MORE ARE WE GOING TO TAKE THIS SHIT”!
Pity is that I will be long dead and turned to slime by the time that happens…
[QUOTE=c.captain;123733]FUCK! Are you kidding? The USCG is continuing to FUCK US IN THE ASS in the GoM. Nothing has changed at all down here. There are foreign vessels all over the place. Saw a huge flex pipelayer working near SE Pass area which I could not identify by sight but which had its AIS turned off! THE BULLSHIT here is hip deep and getting deeper all the time…soon it will be up to our eyes!
THE US MARINER IS GOING TO CONTINUE TO GET FUCKED IN THE OFFSHORE UNTIL THE DAY THAT WE ALL UNITE AND SAY “NOT ANY FUCKING MORE ARE WE GOING TO TAKE THIS SHIT”!
Pity is that I will be long dead and turned to slime by the time that happens…[/QUOTE]
They don’t make the rules idiot-boy, they only enforce and forward to the US Attorney. If the US Attorney don’t prosecute, there is no violation. Instead of blustering like a cranky old guy that life has passed by. Why don’t you take a civics lesson so u actually understand how government works? U think u r a wit becuz u know everything but since u r only half right, that makes u a half wit which is why most of your posts are ignored.
It is so much nicer here when u r at work and can’t get on the internet.
Standing by fore u to start blustering again like Captain Haddock from Tintin…
They don’t make the rules idiot-boy, they only enforce and forward to the US Attorney. If the US Attorney don’t prosecute, there is no violation. Instead of blustering like a cranky old guy that life has passed by. Why don’t you take a civics lesson so u actually understand how government works? U think u r a wit becuz u know everything but since u r only half right, that makes u a half wit which is why most of your posts are ignored.
It is so much nicer here when u r at work and can’t get on the internet.
Standing by fore u to start blustering again like Captain Haddock from Tintin…[/QUOTE]
[QUOTE=z-drive;123755]I always though it was customs/border patrol that handles jones act crap anyways! It is! The CG isn’t the one to whine to.[/QUOTE]
It’s not a Jones Act issue but Outer Continental Shelf Act issue. Labor on the OCS is “supposed” to be reserved for US citizens but the giveaway of visas continues unabated at the loss of thousands of jobs for American mariners but some people here seem to think my opinions on the subject are baseless regardless of which branch of government enforces regulations. All I know is that the USCG issues the waiver letters for these vessels and with those letters, the foreign mariners go to a US embassy or consulate in their home country and get a visa pasted into their passports.
How many foreign vessels have been working on the OCS for a decade or more with their foreign mariners where not one real effort has ever been made to replace them with Americans? Some here obviously don’t care about that but I do and have tried to fight it in Washington but my single lone voice doesn’t change matters of policy. That would take hundreds if not thousands of voices and even then it would be a fight which others here apparently have no guts for or just don’t give a shit for those who lose. They must have theirs?
Shame on everyone there that doesn’t lose their shit when it happens. nimby perhaps, but if some foreign tug showed up in my trade and was cutting into my action I’d be up in arms, and knowing the fleet up here I’d imagine they would last a matter of minutes before being chased out of town through illegitimate means. Guess I should worry about the US fleet as a whole but its tough to when you have enough shit to deal with locally.
I thought we were talking about Shell in Alaska next season? Now we are talking about GOM?? I realize there are lots of foreign boats working in the GOM?!? As for the Arctic there is only 1 US vessel that can fill the role of the Nordica & Fennica, the Aiviq( although that is questionable). Until someone builds more US flagged icebreakers for use up there I don’t see Shell having an option.
[QUOTE=mainecheng;123775]The answer is to fill the gap with US flagged hulls- Crowley, Another Chouest, Tidewater would be the expected players[/QUOTE]
This is of course what is going to happen in the long run. What puzzles me is that while everyone seems to be complaining about foreign ships taking their jobs, there have been no newbuilding orders for suitable ice-strengthened tonnage in the US since Aiviq. Of course 2017 is still far away and there’s all that uncertainty surrounding Arctic drilling in general, but if the ships are not ready by that time, there might be another Jones Act waiver simply because the domestic companies can’t do the job. On the other hand, we don’t know what’s happening behind the scenes - perhaps new ships are already on the drawing board, just awaiting a customer willing to charter them…