Shell could abandon Arctic after this season

I can answer that question myself. Here is the full USCG report for those with detailed interest.
The main points appears to be about drills and paperwork.

[QUOTE=The Commodore;171728]I think there was something posted earlier that she was only on charter until October of this year.[/QUOTE]

Transocean stated in October 2013 that the Polar Pioneer got awarded a 3 year contract, so that would mean they’re paying for it at least another year: http://phx.corporate-ir.net/phoenix.zhtml?c=113031&p=irol-newsArticle&ID=1865242

Unless they negotiate some cancellation deal.

The Discoverer was contracted until the end of December 2016. Same story there, I guess.

well, this is the finale for this ridiculous saga. The Alaskan arctic is not longer going to be even looked at for many decades to come…not going to see it in my working career and likely not even in my lifetime. THIS REALLY SUCKS!

[B]Interior Department Cancels Arctic Offshore Lease Sales[/B]

Beaufort and Chukchi Sea Lease Sales will be Cancelled in Current Five Year Oil and Gas Program

Date: October 16, 2015

Washington, D.C. – In light of current market conditions and low industry interest, the U.S. Department of the Interior today announced that it will cancel the two potential Arctic offshore lease sales scheduled under the current five-year offshore oil and gas leasing program for 2012-2017. The decision follows Shell’s announcement of its exploration results at the Burger prospect in the Chukchi Sea and that the company will cease further exploration activity in offshore Alaska for the foreseeable future.

“In light of Shell’s announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half,” said Secretary of the Interior Sally Jewell. “I am proud of the performance of Interior’s Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement, the U.S. Coast Guard and others in ensuring that Shell’s program this past season was conducted in accordance with the highest safety and environmental standards.”

Under the current Five-Year Program, Chukchi Sea Lease Sale 237 was scheduled potentially for 2016. The Bureau of Ocean Energy Management (BOEM) issued a Call for Information and Nominations in September 2013, in response to which industry submitted no specific nominations. Shell recently announced that the results of its exploration well at the Burger J site in the Chukchi Sea did not warrant further exploration in the Burger prospect.

Similarly, Beaufort Sea Lease Sale 242 had been scheduled potentially for the first half of 2017. BOEM published a Call for Information and Nominations in July 2014, but only received one nomination, thereby raising concerns about the competitiveness of any such lease sale at this time.

Today, the Bureau of Safety and Environmental Enforcement (BSEE) also denied requests from Shell and Statoil for lease suspensions, which would have allowed the companies to retain the leases beyond their primary terms of ten years. The leases will expire in 2017 (Beaufort) and 2020 (Chukchi). Among other things, the companies did not demonstrate a reasonable schedule of work for exploration and development under the leases, a regulatory requirement necessary for BSEE to grant a suspension.

yup, GAME OVER indeed.

Soon: AIVIQ for sale. Next year: maybe the Disco off to China, same treatment as the Kulluk.

And Shell US & Alaska directors retiring …

[QUOTE=Drill Bill;171924]yup, GAME OVER indeed.

Soon: AIVIQ for sale. Next year: maybe the Disco off to China, same treatment as the Kulluk.

And Shell US & Alaska directors retiring …[/QUOTE]

The Disco would be no great loss for the drilling industry. More of the old scrap heaps should go the same way to get them off the market

Didn’t they completely repower the disco?

[QUOTE=rshrew;171951]Didn’t they completely repower the disco?[/QUOTE]

that is my understanding…and all new generators as well

Shell certainly burned a lot of cash with very poorly thought out irrational and reckless spending for just about everything.

Shell has been a successful company for a long time. This Alaska Arctic drilling program must be an extreme aberration. They could not have done worse if they tied.

The generators are fairly new Cat 3512C. Main propulsion is by a single MAN Diesel and direct drive CCP, with three azimuth thrusters and a tunnel thruster for maneuvering according to DNV-GL: https://exchange.dnv.com/Exchange/main.aspx?extool=vessel&subview=machinerysummary&vesselid=27355
When the M/Eng. was installed I don’t know, but it is NOT original from 1966, since this model did not exist before 1996.

She was built as a Log Carrier in Japan in 1966 and converted to a turret moored Drillship of Sonat design in 1976.
Here is her history: 2010 - Noble Discoverer, 2001 - 2010 Frontier Discoverer, 1976 - 2001 Discoverer 511, 1972 - 1976 Offstar, 1966 - 1972 Matsuhiro Maru. (IMO 6608608)

Class was changed from ABS to DNV in June, 2007: https://exchange.dnv.com/Exchange/main.aspx?extool=vessel&subview=summary&vesselid=27355
Class notation: 1A1 Ship-shaped Drilling unit

Since initial conversion she has gone through a number of upgrades and had sponsons added at least once.
Here is pictures of her I took in Singapore in July, 2014 while preparing for this year’s drilling season in the Arctic:

A bit of patch work and not what you would expect to be used in an area like the Chukchi Sea. Even if a lot of money were spent on new machinery, equipment and steel you still have an old ship, closing on 50 years of age and hard drive.

[QUOTE=ombugge;171962]Since initial conversion she has gone through a number of upgrades and had sponsons added at least once.

A bit of patch work and not what you would expect to be used in an area like the Chukchi Sea. Even if a lot of money were spent on new machinery, equipment and steel you still have an old ship, closing on 50 years of age and hard drive.[/QUOTE]

Nice pics. Looking at her stern she looks more like a floating shoe box than anything state of the art (that you would expect up north).

[QUOTE=ombugge;171962]The generators are fairly new Cat 3512C. Main propulsion is by a single MAN Diesel and direct drive CCP, with three azimuth thrusters and a tunnel thruster for maneuvering according to DNV-GL: https://exchange.dnv.com/Exchange/main.aspx?extool=vessel&subview=machinerysummary&vesselid=27355
When the M/Eng. was installed I don’t know, but it is NOT original from 1966, since this model did not exist before 1996.

She was built as a Log Carrier in Japan in 1966 and converted to a turret moored Drillship of Sonat design in 1976.
Here is her history: 2010 - Noble Discoverer, 2001 - 2010 Frontier Discoverer, 1976 - 2001 Discoverer 511, 1972 - 1976 Offstar, 1966 - 1972 Matsuhiro Maru. (IMO 6608608)

Class was changed from ABS to DNV in June, 2007: https://exchange.dnv.com/Exchange/main.aspx?extool=vessel&subview=summary&vesselid=27355
Class notation: 1A1 Ship-shaped Drilling unit

Since initial conversion she has gone through a number of upgrades and had sponsons added at least once.
Here is pictures of her I took in Singapore in July, 2014 while preparing for this year’s drilling season in the Arctic:
[/QUOTE]

This information isn’t quite accurate. The generators are Caterpillar 3512’s 1050 KW with E-POD emissions equipment. The main engine is a MAN B&W 6S42MC slow speed direct coupled to a fixed pitch propeller. The Main engine was built in 2013 and installed in 2014 South Korea shipyard. The bow thruster is just a tunnel thruster. The stern thruster is a drop down dual thruster arrangement non azimuth. She is headed to Washington, then eventually overseas. Everyone can see the writing on the wall.

[QUOTE=highseasmechanic;171992]This information isn’t quite accurate. The generators are Caterpillar 3512’s 1050 KW with E-POD emissions equipment. The main engine is a MAN B&W 6S42MC slow speed direct coupled to a fixed pitch propeller. The Main engine was built in 2013 and installed in 2014 South Korea shipyard. The bow thruster is just a tunnel thruster. The stern thruster is a drop down dual thruster arrangement non azimuth. She is headed to Washington, then eventually overseas. Everyone can see the writing on the wall.[/QUOTE]

Thanks for corrections. I just referred to the DNV-GL specs. I have not been directly involved with this vessel, or been on board, but you appear to?
I’m a bit surprised that you say the aft thrusters are not azimuthing. The Sonat class turret moored units all had thrusters to turn the vessel while on location. I have been involved with those + the FPSO Petrojarl with a similar arrangement.

PS> 3 Az. thruster was a typo. Should read 2 Az. + 1 tunnel thrusters.

[QUOTE=ombugge;171995]Thanks for corrections. I just referred to the DNV-GL specs. I have not been directly involved with this vessel, or been on board, but you appear to?
I’m a bit surprised that you say the aft thrusters are not azimuthing. The Sonat class turret moored units all had thrusters to turn the vessel while on location. I have been involved with those + the FPSO Petrojarl with a similar arrangement.

PS> 3 Az. thruster was a typo. Should read 2 Az. + 1 tunnel thrusters.[/QUOTE]
He is spot on about the thrusters. Forward is a simple tunnel thruster, rated around 1000 HP and aft is a drop down, non-azimuth thrusters, each one of those also around 1k. They are on the port quarter and all 3 are hydraulic, adding to environmental concerns for the crew when they were working in a less than desirable environment.

On an interesting side note, Fennica and Nordica are returning to Europe for the first time via the Northwest Passage.

should we worry for the Fennica ? Uncharted areas and all that … :wink:

It’s the old adage all over again…location, location, location

Arctic Oil Drilling: Why Does U.S. End It?

By Aiswarya Lakshmi October 20, 2015

The Obama administration has taken steps to keep drill rigs out of Alaska’s northern ocean for a decade or more. The sudden of turnabouts is attributed to slowing down of economy.

The U.S. Department of Interior announced that it is canceling two lease sales and will not extend current leases for companies interested in drilling in the Arctic waters off the Alaska coat.

“The federal government is cancelling federal petroleum lease sales in US Arctic waters that were scheduled for 2016 and 2017,” said Interior Secretary Sally Jewell. This happened three weeks after Royal Dutch Shell announced it was walking away from exploratory drilling in US Arctic waters.

Jewell said the Chukchi Sea off Alaska’s northwest coast and the Beaufort Sea off the state’s north coast will not be included in the agency’s next five-year lease sale plan. Current leases held by Shell and other companies in Arctic waters will not be extended, she added.

The Interior Department’s decision does not appear to be strictly motivated by environmental concerns. It wasn’t environmental protest that killed off Shell’s drilling either. What really forced the Anglo-Dutch company to retreat was low oil prices and disappointing drilling results.

The Department cited a number of reasons to cancel the sales, including low industry interest and market conditions.

As oil prices remain low, interesting in risky and remote drilling may seem like a less profitable option to oil companies.

According to a press release from the Department of the Interior, the fact that Shell’s exploratory well found less oil than predicted was also a factor.

The move is somewhat surprising coming from Obama. Just six months ago, the president gave permission to Shell to more seriously explore drilling off the Alaskan coast, a move that upset his eco-conscious supporters.

The news is welcomed by climate hawks and environmental activists, who say that continuing to search for new sources of fossil fuels will contribute to climate change while also putting ecosystems at risk in the face of oil spills.

For the next few years anyway, Arctic drilling will effectively be off the table. However, should oil price recover, interest in offshore drilling in the Arctic in the future may be renewed.

Well someday when there is no more new reserves being discovered in places where the cost of production is lower will anyone look to the Arctic again for oil but that is a very long way away.

[QUOTE=c.captain;172070]It’s the old adage all over again…location, location, location

Well someday when there is no more new reserves being discovered in places where the cost of production is lower will anyone look to the Arctic again for oil but that is a very long way away.[/QUOTE]

In Norway and Russia it’s business as usual in the Arctic :slight_smile:

Not exactly …

Surely not. Also in Russia the big oil guys have postponed their exploration drilling plans for several years.

And they do feel the effect of the sanctions.

[QUOTE=Drill Bill;172130]Surely not. Also in Russia the big oil guys have postponed their exploration drilling plans for several years.

And they do feel the effect of the sanctions.[/QUOTE]

Postponed yes, but not like USA which has set back the industry decades. On the next up turn in Oil prices Norway and Russia is ready to explore the Arctic, USA will have to catch up.