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Shell CEO says an Arctic offshore oil find would take years to bring on line

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By ALAN BAILEY: Petroleum News: December 20, 2013

Shell CEO Peter Voser said Dec. 11 that he anticipates oil production from the Alaska Arctic offshore to start during the second half of the next decade, if the company makes a discovery. For several years the company has been engaged in an exploration program on the outer continental shelf of the Alaska Chukchi and Beaufort seas but has yet to drill an exploratory well into a potential hydrocarbon zone.

Voser is leaving Shell in March and his remarks about his company’s Alaska plans came as part of an interview, posted on the Shell website, in which he commented on Shell’s business strategy and some of the issues facing the company as he prepares to hand over the management reins to his successor at the top.

Following a series of difficulties during the summer exploration season in 2012, in which Shell commenced drilling in both Arctic seas but was only able to drill top-hole sections of wells, the company placed its drilling program on hold in 2013. The company has recently announced its intention to continue its Arctic drilling program, possibly as soon as the summer of 2014. However, the company has continued to place a hold on its efforts in the Beaufort Sea, with, for the time being, drilling to continue just in the Chukchi Sea, where the company sees the biggest undiscovered oil potential.

“We took a pause in 2013 and used the time to reflect on what happened in 2012,” Voser said. “Shell is making preparations to potentially start exploratory drilling in 2014 or 2015, but this has not yet been decided. If we make a discovery, I would envisage possible production during the second half of the next decade.”

Shell has previously said that, if it does make an oil find in the Chukchi Sea, it anticipates shipping the oil to market through a pipeline that it would need to construct under the Chukchi and across the National Petroleum Reserve-Alaska to the northern end of the trans-Alaska oil pipeline. The permitting and construction of the necessary infrastructure to develop a field and bring the oil on line would presumably take several years to accomplish and require the discovery of a major oil resource.


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