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The Anchorage Daily News: Shell says no Beaufort oil drilling in 2008

TOP-HOLE: Company wants to put in three shallow wells at Sivulliq.

By ALAN BAILEY and KAY CASHMAN
Petroleum News

Published: February 19th, 2008 12:58 AM
Last Modified: February 19th, 2008 01:09 AM

Even if the U.S. Court of Appeals gives Shell approval to drill oil exploration wells in Alaska’s Beaufort Sea this year, the company has decided not to do any “critical” drilling in 2008, Shell’s Alaska operations manager Susan Moore said.

The company’s spokesman in Alaska, Curtis Smith, said Shell’s decision was based on “the availability of drilling assets” combined with a response to “repeated requests that we take a measured approach to exploring the Alaska offshore.”

However, the company does plan to drill some shallow wells, termed “top-hole wells,” that would not go deep enough to penetrate hydrocarbon reservoirs. Shell has been discussing its plans with regulators, Moore said.

“Basically it’s preparatory work that would take place at the Sivulliq prospect,” Smith said, referring to the prospect that used to be called Hammerhead, which lies offshore the North Slope on the western side of Camden Bay.

Top-hole wells typically delve 1,000 to 1,200 feet and establish the well structure, isolate the permafrost and provide a well with structural integrity, Smith said.

Shell wants to use its Kulluk floating drilling platform to drill three of these wells at Sivulliq. But the Frontier Discoverer, the drillship that Shell had also contracted for Beaufort Sea drilling, will remain in Australia during 2008, he said.

Drilling top-hole wells “will give us a head start on our 2009 season, which we hope will be quite robust,” Smith said.

To drill the top-hole wells Shell will need permission of the 9th U.S. Court of Appeals because the company’s Beaufort operations remain on hold, pending the outcome of an appeal by the North Slope Borough, the Alaska Eskimo Whaling Commission and several environmental organizations against U.S. Minerals Management Service approval of Shell’s exploration plan.

That appeal has resulted in a court injunction on Shell’s Beaufort drilling activities until the case is settled. The court heard oral arguments in December. It is not known when it will rule.

“If we get the go-ahead from court and the permits we need, taking a more measured approach will help instill confidence with the stakeholders — demonstrate that we can operate safely and responsibly,” Smith said. “We’ll also get a chance to show off some of our technology.”

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