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Shell begins drilling well at Beaufort Sea prospect

Thu Oct 4, 2012 4:04pm GMT

ANCHORAGE, Alaska Oct 4 (Reuters) – Royal Dutch Shell Plc has started drilling a well in the Beaufort Sea off northern Alaska, making good on exploration plans that had been stalled by floating ice, technical delays and problems with meeting oil spill-preparation requirements.

Shell said it started drilling late on Wednesday at its Sivulliq prospect after getting clearance from Inupiat Eskimo whalers, who had just completed their autumn bowhead whale hunt. Under the plans, operations must cease by the end of October.

As with the well it began last month in the remote Chukchi Sea off northwestern Alaska, Shell is permitted by federal authorities to drill only to shallow depths that are far short of oil-bearing reservoirs. The permits issued by the U.S. Bureau of Environmental Safety and Enforcement allow only “top-hole” drilling because Shell has not yet met oil-spill regulations.

Shell failed to win U.S. Coast Guard clearance for a required oil-spill barge, and key equipment was damaged during sea trials last month in the Puget Sound region. The company announced that the barge, the Arctic Challenger, will not be available for use this year in Alaska, but that repairs should be completed in time for next year’s open-water drilling season.

Shell says it has spent $4.5 billion to date on its offshore Alaska exploration program, which was launched with the purchase of federal oil leases at sales held in 2005, 2007 and 2008. But drilling was delayed by ardent opposition from environmentalists and locals, adverse court rulings and regulatory changes imposed after the 2010 Deepwater Horizon disaster in the Gulf of Mexico.

The Sivulliq prospect being drilled by the Kulluk rig is 16 miles (26 km) offshore, according to federal officials. The Burger prospect in the Chukchi, which Shell is drilling with the Noble Discoverer drillship, is about 70 miles offshore.

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