Approval of Shell arctic drilling has a catch

OREANDA-NEWS. July 02, 2015. The US Interior Department's Fish and Wildlife Service approval for Shell to resume oil drilling in the Chukchi sea off Alaska today may make the company's plans more difficult.

The agency is requiring that Shell space out drilling operations by at least 15 miles — six miles farther than Shell had planned — to avoid disturbing foraging or migrating walruses.

The company has yet to obtain drilling permits from Interior's Bureau of Safety and Environmental Enforcement. Shell said today it is evaluating the Fish and Wildlife authorization and will continue to pursue its 2015 drilling program.

Shell is hoping to resume work in US arctic for the first time since 2012 in just four days, putting it up against the wire in its efforts to obtain all necessary approvals.

The 15-mile buffer to avoid disturbing foraging and migrating walruses was part of a rule Fish and Wildlife issued in 2013 to protect marine mammals.

Shell had argued that its drilling units should be allowed to operate within nine miles of one another, saying the science does not indicate it does not have any greater effect on the animals than activity 15 miles away. But regulators retained the buffer requirement.

Shell wants to return to the Chukchi to drill up to six wells on its Burger Prospect. The company's authorization from Fish and Wildlife would allow Shell to explore from 4 July-31 October.

The authorization stipulates that no more than two simultaneous seismic operations and three exploration drilling operations will be allowed at any given time. Shell has planned to use two drilling rigs and a fleet of support vessels.

Shell's last US Arctic ocean drilling program, in 2012, was plagued by a series of mishaps. A containment dome on the Arctic Challenger was damaged during testing. The Noble Discoverer dragged its anchor and nearly ran aground on the Alaska coast later that month, raising concerns about its ability to operate in harsh arctic conditions. Shell opted to move its Kulluk drilling rig through the Gulf of Alaska in December, only to have it run aground on Sitkalidak island after breaking free from its towing vessel during stormy weather.

Shell managed to conduct some preliminary drilling work known as a "top hole" on its Burger A site in the Chukchi and drilled a second top hole at its Sivulliq site in the Beaufort sea in 2012. But after the containment dome was damaged, Shell was barred from penetrating into hydrocarbon-bearing zones in those wells.