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Shell was underprepared for ill-fated tow across Gulf of Alaska

Extracts from an article by Suzanna Caldwell published April 3, 2014 by AlaskaDispatch under the Screen Shot 2014-04-04 at 09.24.01headline: Coast Guard report shows Shell was underprepared for ill-fated tow across Gulf of Alaska

A Coast Guard report released Thursday shows that while a series of events ultimately led to the grounding of a drilling rig designed to drill in the Arctic, an “inadequate assessment and management of risks” was the biggest cause of the Kulluk grounding.

The findings in the 152-page report conclude that while bad weather in the Gulf of Alaska was the primary cause of the grounding, “ineffective” risk management and application of towing measures from Shell and Edison Chouest contributed to the grounding.

The report lays out in specific detail everything that led to grounding of the drilling rig, which was heading to Everett, Wash., where offseason repairs could be completed ahead of the planned 2013 Arctic drilling season. The move was also timed to avoid a tax liability that would have left Shell on the hook for millions of dollars had the Kulluk remained in Alaska waters.

“The Coast Guard report shows that Shell was completely unprepared for the realities of operating in Alaska’s harsh seas,” said Rebecca Noblin, Alaska director for the Center for Biological Diversity. “But what’s even more troubling is it shows Shell’s willingness to subsume safety concerns to financial ones. This isn’t just about making mistakes; it’s about knowingly taking unnecessary risks to save a few dollars.”

As of late last year, the Kulluk remained in Singapore undergoing repairs. In October, a Shell executive hinted that damage to the rig was so extensive that it might not come back into service.

FULL ARTICLE

COAST GUARD REPORT (152 PAGES)

Screen Shot 2014-04-04 at 09.38.42RELATED: Shell Faces US Coast Guard Investigation Into Alaska Rig Accident

Extract

The exploration campaign in the Arctic waters, which has been hit by protests and legal challenges, along with major technical difficulties, was estimated last year to have already cost about USD5 billion to Shell, before the company had drilled into a single oil-bearing rock. Ben van Beurden, the group’s new chief executive, has been non-committal on whether the company plans to drill the region in the future.

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