This week the SubseaIQ team added 4 new projects and updated 25 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.
N. America – US Alaska
Sep 17, 2012 – After battling through federal regulatory issues and environmental lawsuits, Shell’s Chukchi Sea exploration drilling program has gotten off to a rocky start. Soon after spudding the first well, the Noble Discoverer (mid-water drillship) was forced to move off location for a short time due to an encroaching ice floe. The latest setback occurred when the containment dome – used to contain uncontrolled oil flowing from a subsea wellhead – was damaged during testing. Without an operational containment dome, the company will not be able drill into oil-bearing zones. However, Shell will still be able to drill the shallow top-hole sections of several exploration wells before the short drilling season comes to an end.
Project Details: Burger, SW Shoebill, Cracker Jack
Europe – North Sea
Sep 20, 2012 – Xcite Energy has successfully concluded the pre-production well test in the Bentley Phase 1A work program. The test was built around two horizontal well sections (9/3b-7 and 9/3b-7Z) that represented an excess of 4,200 feet of net reservoir. Approximately 147,000 barrels of Bentley crude were produced. Results confirmed the existence of a large aquifer that should provide long term pressure support during production. Even with the aquifer in place, the oil-water ratio was far better than expected and provides important information for modeling long term oil recovery from the field. Both well bores will be suspended and kept available for use in the next phase of development. Drilling and testing were carried out by the Rowan Norway (400′ ILC). Once the test equipment on the rig has been decommissioned the rig be demobilized from the field and released back to Rowan.
Project Details: Bentley
Sep 19, 2012 – The Norwegian Ministry of Petroleum and Energy introduced a policy of naming fields and discoveries after prominent individuals or events of national significance. The re-naming policy is an effort to parallel the importance of Norway’s offshore energy reserves with the contributions of people and events that shaped the nation. In this instance, the Draupne field is now the Ivar Aasen field. Aasen was a poet and linguist in the 1800s. He is credited with developing the Nynorsk (New Norwegian) language which aided in the modernization of the country.
Project Details: Edvard Grieg (Luno, Ivar Aasen) Project
Sep 19, 2012 – Premier Oil awarded a contract worth $24.3 million to Aberdeen-based energy consulting firm ADIL to provide people and systems for the execution phase of the Solan field in the UK North Sea. ADIL spent the previous two years providing similar services to the field’s former operator, Chrysaor, during the development phase. The contract will conclude once the field is brought into production, currently scheduled for 4Q 2014. ADIL personnel will oversee construction of the jacket and topsides as well as a 300,000 barrel subsea storage tank. Once brought online, Solan is expected to produce 40 million barrels of oil at an initial rate of 24,000 barrels per day.
Project Details: Solan
Sep 18, 2012 – Serica Energy announced a farm-out agreement has been reached with JX Nippon for UK North Sea Block 22/19c. At present, Serica holds a 100% interest in the block. Once the UK government signs off on the transaction, JX Nippon will be the operating partner with an 85% stake. As part of the agreement, JX Nippon will pay $250,000 to Serica and bear all future costs associated with the license.
Project Details: Oates
Sep 17, 2012 – Ithaca Energy announced that a hydraulic intervention to correct a production tubing blockage in well P1 has been performed with minor success. Gross production from the well is now between 700 and 800 bopd. P1, drilled in 2006, is the original appraisal well and was completed as a development well in 2011. A workover was contemplated by the Athena partners but it was determined that more value would be gained from producing the well in its current condition. The company did indicate that future attempts to further clear the blockage using facilities on the FPSO may be undertaken.
Project Details: Athena
Sep 14, 2012 – EnQuest will formally become operator of Blocks 9/2b and 9/2c with the completion of its acquisition of an additional 15 percent from First Oil. EnQuest’s total stake in Kraken is now 60 percent.
Project Details: Kraken
Sep 14, 2012 – The Norwegian Petroleum Directorate has approved Wintershall’s permit to drill exploration well 16/1-16 using the Bredford Dolphin (mid-water semisub). The well is located in 370 feet of water in PL457.
Project Details: Noor
Sep 19, 2012 – Chevron continues a successful run in the Greater Gorgon area offshore Western Australia with the announcement of positive results from the Satyr-2 exploration well. The company has confirmed that the well intercepted a net gas column of 128 feet. Satyr-2 was drilled to a depth of 12,454 feet by the Atwood Eagle (DW semisub) in permit WA-374-P. This marks Chevron’s fifteenth discovery in Australia since mid-2009. Chevron’s Gorgon natural gas project is the largest of almost a dozen terminals planned or under construction along the country’s coast.
Project Details: Greater Gorgon
Sep 18, 2012 – INPEX awarded a contract worth $273 million to Technip for work related to the Ichthys LNG Project in the Browse Basin, Western Australia. Starting immediately, Technip will provide services concerning the preparation and execution of offshore commissioning of the FPSO and central processing facility. Completion of the contract is expected in 4Q 2016 when first gas is scheduled to be delivered. This is the third Ichthys contract awarded to Technip this year. The other two include agreements for engineering and procurement services and for the supply of flexible piping.
Project Details: Ichthys
S. America – Other & Carib.
Sep 17, 2012 – Falkland Oil and Gas confirmed that their Loligo exploration well is a gas discovery. Drilling operations were carried out by the Leiv Eiriksson (UDW semisub). The well was drilled to a measured depth of 13,264 feet and intersected six-gas bearing Tertiary aged targets. Information obtained from the well will be used with existing seismic data to gain a better understanding of reservoir potential and distribution. The well will be plugged and abandoned but it is important to note that Loligo has proven a working hydrocarbon system in the northern part of the East Falkland Basin.
Project Details: Loligo
Africa – West
Sep 20, 2012 – Eni reports promising test results from the Sankofa East-1X well drilled off Ghana in the Offshore Cape Three Points block. The well was drilled to a total depth of 11,975 feet in 2,706 feet of water by the Transocean Marianas (DW semisub). Testing revealed 91 feet of gas and condensate pay as well as a gross oil column of 249 feet in Cretaceous sandstones. A production test of the oil-bearing zone delivered roughly 5,000 bopd; however, flow rates were constrained by surface infrastructure limitations. It is possible that the well will be suspended for future use in development operations. Eni plans to immediately drill other wells in the area to determine the size of the discovery and further evaluate the potential for commercial development.
Project Details: Sankofa
Sep 19, 2012 – Bowleven’s latest Etinde appraisal and development well offshore Cameroon is now underway. The IM-5 well is being drilled by the Atwood Aurora (350′ ILC) in block MLHP-7. The primary objective of the operation is to establish reservoir and fluid properties in the Middle Isongo sands. An extensive logging, testing and coring suite will be performed as well. The well has been designed in a manner that will allow for use as a future producer. A second well will be drilled on the permit, the location of which will be determined by results of the IM-5.
Project Details: Etinde
Ophir Continues EG Success
Sep 17, 2012 – Ophir Energy wrapped up a successful 2012 drilling campaign with a gas discovery in the Fortuna West-1 exploration well on Block R offshore Equatorial Guinea. The well was drilled to a measured depth of 10,426 feet by the Eirik Raude (UDW semisub). Gas was encountered in the primary and secondary targets. The Felix Prospect was also intercepted and testing indicated promising results for future appraisal. Fortuna West-1 is the last of three wells in the company’s 2012 Block R drilling program. Combined results of these wells have increased estimates of in-place contingent resources from 116 MMboe to 500 MMboe.
Asia – SouthEast
Sep 14, 2012 – The Pearl Energy-led joint venture has awarded Clough and TL Offshore the platform procurement construction installation and commissioning contract. Clough will be responsible for the procurement, construction and commissioning portion of the work while TL Offshore will be responsible for offshore transporation and installation. Work is expected to commence in September 2012. Completion is anticipated in early 2014.
Project Details: Manora
Sep 14, 2012 – The Pearl Energy-led joint venture has awarded Tanker Pacific Offshore Terminals the contract to carry out the conversion of the FSO to be used on the Manora field with work taking place in Singapore. Installation of the FSO is scheduled or early 2014.
Project Details: Manora
- Remote-controlled world record at Åsgard (mb50.wordpress.com)
This week the SubseaIQ team added 3 new projects and updated 17 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.
Asia – SouthEast
Sep 13, 2012 – The Gurame SE-1X well is expected to spud towards the end of September, according to MEO Australia. Success of the appraisal well could lead to early development of the Gurame oil and gas field situated offshore northern Sumatra in the Seruway PSC. The well was identified via 3D seismic as the lowest risk drill-ready candidate with the highest potential for commercial development. Drilling will be undertaken by the Hercules 208 (200′ MLC). Two attractive targets in the well, the Baong and Belumai reservoirs, are expected to be naturally fractured and gas bearing. These attributes should improve the possibility of achieving commercial flow rates. MOE maintains a 100% interest in Seruway.
Project Details: Gurame
Sep 12, 2012 – The Berangan-1 well has proved to be Lundin Petroleum‘s third gas discovery in block SB303 offshore Malaysia. The well was drilled in 229 feet of water to a total depth of 5,607 feet by the West Courageous (350’ ILC). Data acquired from the well indicates a 541 foot gross continuous gas column in mid-Miocene sands. While Berangan-1 is the third gas discovery in SB303, it is the fourth in the contract area. Each of the 4 gas discovery lies within a 6 mile radius.
Project Details: Berangan
Sep 11, 2012 – Otto Energy has approved the Final Investment Decision for Phase II of the Galoc field. Total project cost will be $188 million. Based on its working interest in the project, Otto will be funding 33 percent of the cost, or $62 million. The scope of work for Phase II includes drilling two subsea wells, tying back the wells to the existing FPSO and installing a second production riser and control umbilical. Both wells are expected to commence production during the second half of 2013. The two new Phase II wells will increase field production rates to 12,000 bopd from the current rate of 5,600 bopd.
Project Details: Galoc
Europe – North Sea
Sep 13, 2012 – BP has announced it reached an agreement to sell its 18.36% stake in Draugen Field in the Norwegian Sea to Norske Shell for $240 million. The deal, subject to regulatory approval, should be completed by the end of the year. BP’s net production from the Shell-operated Draugen field averages 6,000 barrels per day. Since 2010, BP has entered into agreements to sell assets valued at $33 billion. In an effort to focus more on growth opportunities and its core business strengths BP expects to divest $38 billion in assets between 2010 and 2013.
Project Details: Draugen
Sep 13, 2012 – Providence Resources has been informed by ExxonMobil that a letter of intent has been signed for the use of Ocean Rig’s Eirik Raude (UDW semisub). The rig will be used to drill the Dunquin prospect located in Frontier Exploration Licence 3/04 offshore Ireland. Program duration is expected to take up to 6 months and will commence in the first quarter of 2013, pending corporate and co-venture contract approvals. Partners in the exploration license include operator ExxonMobile (27.5%), Eni (27.5%), Repsol (25%), Providence Resources (16%) and Sosina Exploration (4%).
Project Details: Dunquin Project
Sep 12, 2012 – JV partner Bridge Energy has announced the start of operations at exploration well 7/11-13 on the Norwegian continental shelf. The well is targeting the Triassic reservoir Geite prospect which is located 19 miles (30 kilometers) west of the Ula field. The Maersk Guardian (350′ ILC) is drilling the well and is expected to be on location for a minimum of 80 days.
Project Details: Geite
N. America – US Alaska
Sep 12, 2012 – Shell’s much anticipated Chukchi Sea drilling campaign is underway marking the first attempt in 20 years to explore offshore U.S. Arctic petroleum resources. Currently, the Noble Discoverer (mid-water drillship) is being used to drill the mud line cellar and top-hole sections of the first well. This is expected to take two weeks, after which the Discoverer will either continue drilling the Burger prospect or will move to another location to drill the top-hole section. Part of that decision will rest on whether or not the company is able to obtain a permit to drill past the surface sections into the oil bearing portion of the well. Shell has plans to drill three wells in the Chukchi Sea and two wells in the Beaufort Sea if the weather cooperates.
Project Details: Burger, SW Shoebill, Cracker Jack
Africa – Other
Sep 11, 2012 – Africa-focused Tullow Oil reported Monday that the Mbawa-1 exploration well, currently being drilled by Apache Corporation offshore Kenya, has encountered gas in its shallowest objective. Mbawa-1, located in the L8 license, has so far been drilled to a depth of 8,375 feet and it has encountered approximately 170 feet of net gas pay in porous Cretaceous sandstones. The Deepsea Metro I (UDW Drillship) is now drilling the well to a total depth of 10,745 feet. Apache is the operator of Block L8 with a 50-percent interest. Tullow holds a 15-percent interest.
Project Details: Mbawa
Beach Gains 30% of Est Cobalcescu
Sep 12, 2012 – Melrose Resources has agreed to farm-out 30% of its equity in the Est Cobalcescu exploration concession in the Black Sea to Beach Petroleum. Once the transaction is completed, Melrose will retain operatorship of the concession. Terms dictate that Beach will pay its proportionate share of past costs and cover Melrose’s share of the recently completed seismic survey.
Africa – West
Sep 13, 2012 – The joint venture partners for Aje, led by YFP, are reprocessing seismic data related to the Aje discovery with a focus on the Cenomanian reservoir. The joint venture is mulling the potential for early oil development as the technical review could lead to an increase in Cenomanian oil volumes. An appraisal well may be drilled in 2013 targeting the reservoir.
Project Details: Aje
N. America – US GOM
Sep 13, 2012 – Petrobras has started production at its Chinook field in the U.S. Gulf of Mexico. The Chinook #4 well was drilled and completed in Lower Tertiary reservoirs. Production from Chinook is processed by the BW Pioneer – the first FPSO to operate in U.S. waters.
Project Details: The Greater Chinook Area
Sep 12, 2012 – It has been announced that Plains Exploration & Production has agreed to buy Shell’s 50% working interest in the Holstein Field for approximately $560 million. The transaction is effective October 2012 and should close by the end of the year. Holstein, located in the U.S. Gulf of Mexico, began producing in December 2004 and is facilitated by a spar platform anchored in 4,400 feet of water. Average net production at the field is 7,400 boepd. The remaining 50% interest in the field is held by BP.
Project Details: Holstein
S. America – Brazil
Sep 13, 2012 – Vanco is preparing to move the GSF Arctic I (mid-water semisub) to drill its Canario prospect on BM-S-63. This is the second well in their three-well program offshore Brazil. Drilling is expected to commence in approximately two weeks.
Project Details: Canario
Sep 13, 2012 – Vanco Energy’s Sabia well reached a depth of 13,779 feet when a decision was made to stop drilling short of the proposed depth of 14,717 feet. Based on current well data, the discovered volumes are at the low end of the pre-drill range estimate. While the well encountered an active petroleum system, the commerciality of the discovery cannot be firmly made at this time. The information obtained from the well is likely to have a positive impact on the next two prospects to be drilled – Canario and Jandaia.
Project Details: Sabia
Sep 12, 2012 – Petrobras has announced the start of oil production at the Baleia Azul presalt field in the offshore Camps Basin. First oil from the field is being pumped aboard the Cidade de Anchieta FPSO. The Cidade de Anchieta is one of two new production systems that Petrobras will put into operation in 2012. Initial production at Baleia Azul is a good sign for Petrobras whose oil production has taken a hit this year due to maintenance and unexpected shutdowns. The company has also announced plans to bring Bauna and Piracaba fields online in October. Petrobras holds a 100% stake in the fields.
Project Details: Espadarte
Shell Alaska yesterday began drilling operations at its Burger prospect in the Chukchi Sea, offshore Alaska. The Noble Discoverer drillship is being used for the operations.
“The occasion is historic. It’s the first time a drill bit has touched the sea floor in the U.S. Chukchi Sea in more than two decades. Today marks the culmination of Shell’s six-year effort to explore for potentially significant oil and gas reserves, which are believed to lie under Alaska’s Outer Continental Shelf. In the days to come, drilling will continue in the Chukchi Sea, and we will prepare for drilling to commence in the Beaufort Sea,” said the company in a press release.
- Arctic frontier opens as Shell begins drilling in Chukchi Sea (fuelfix.com)
- Statoil delays start of Chukchi drilling until at least 2015 (fuelfix.com)
- Drilling Off The Alaska Coast For The First Time In More Than Two Decades (alan.com)
President Obama’s recent invitation to open an area in Alaska to energy drilling is playing to poor reviews from industry leaders and administration critics, who say the move is an attempt to mislead the public about the administration’s willingness to open federal lands to more oil and gas production.
Over the weekend during a brief refueling stop in Alaska on the way to the nuclear summit in Seoul, Mr. Obama issued a release inviting industry input on an oil and gas lease sale in Alaska’s Cook Inlet.
“Today’s announcement is part of our commitment to increasing safe and responsible domestic oil and gas production as part of an all-of-the-above energy strategy for America,” said Secretary of the Interior Kenneth L. Salazar. “We will continue to support efforts to safely expand offshore oil and gas exploration, using the best science to assess where recoverable resources lie and providing industry with abundant opportunity to lease and develop areas that contain those resources.”
But the Cook Inlet, off the coast of South-Central Alaska is the oldest oil field in the state, dating back to the early 1960s, and industry organizations are ridiculing the move as an attempt to try to dress up an old leasing area the industry has had little to no interest in drilling in for years. In fact, two previous Cook Inlet sales in 2009 and 2011 were either canceled or put on hold because of lack of industry interest.
“Oil production has been tapering off there – that’s true for any old oil field,” said Benjamin Cole of the industry-funded Institute for Energy Research. “It’s not economic for the industry to put oil wells there.”
Mr. Cole compared the administration’s lease sale offer in the Cook Inlet to a used-car dealer offering a 1962 Ford with 350,000 miles on it.
“It may be a good car, may have been a good car for all those people who learned to drive on it, but it may not make economic sense to lease it again,” he said.
A spokesman for the House Natural Resources Committee said the panel would not have an official response but argued this “latest political move is really much ado about nothing.”
The Cook Inlet lease sale was part of President George W. Bush’s 2007-12 plan for drilling in the outer continental shelf, which the Obama administration canceled and then delayed coming up with its own five-year proposal until last year.
“This is another case of President Obama canceling a lease sale that was scheduled by a previous administration and then trying to take credit for possibly allowing it to happen,” said committee spokesman Spencer Pederson. “Also, the Cook Inlet is mostly natural gas, so if the administration is using this to distract Americans from noticing gasoline prices have doubled under President Obama, House Republicans have a list of places we would suggest the administration open for American oil production to help lower prices at the pump.”
A Department of Interior spokeswoman declined to comment on the claims about the Cook Inlet, but pointed to an Interior Department estimate that the area could contain more than 1 billion barrels of undiscovered oil and 1.2 trillion cubic feet of natural gas.
The same report estimated another area off Alaska, the Chukchi Sea, could contain an estimated 15.4 billion barrels of oil and 76.8 trillion cubic feet of natural gas.
ConocoPhillips Alaska operates the Kenai liquefied natural gas export terminal in the Cook Inlet Area and has expressed interest in the drilling in the Interior Department’s latest lease sale opportunity.
In contrast, oil companies jumped at the chance to drill in the Chukchi Sea when the Bush administration offered a lease sale for a portion of it in 2008.
But more than a dozen environmental organizations have tried to derail drilling in the Chukchi Sea scheduled to start in July by challenging the drilling plans of companies such as Royal Dutch Shell in court.
Sabrina Fang, a spokeswoman for the American Petroleum Institute, says the industry has only marginal interest in the Cook Inlet and would much prefer to see more permitting opportunities in the Chukchi Seas, as well as Beaufort Sea, another area off Northern Alaska, which is home to one of the largest colonies of Beluga whales.
“Leasing in areas that have been available for years is not the forward-thinking energy policy needed to increase future energy security,” Ms. Fang said. “If the administration was serious about Alaska oil and gas exploration, then they would schedule lease sales in these areas before 2015 and 2016.”
- BOEM: Conditional Approval for Shell’s Chukchi Sea Exploration Plan (USA) (mb50.wordpress.com)
- USA: Shell’s Chukchi Sea Oil Spill Response Plan Approved (mb50.wordpress.com)
On February 17, 2012, the Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) approved Shell’s Oil Spill Response Plan (OSRP) for the Chukchi Sea.
Approval of the Plan is another major milestone on the path to drilling in the Alaska offshore this summer and further validates the huge amount of time, technology, and resources Shell says it “has dedicated to assembling an Arctic oil spill response fleet second to none in the world.”
Specifically, Shell’s OSRP includes the assembly of a 24/7 on-site, nearshore and onshore Arctic-class oil spill response fleet, collaboration with the U.S. Coast Guard on both assets and response planning, and newly engineered Arctic capping and containment systems that will be tested before drilling commences.
“We recognize that industry’s license to operate in the offshore is predicated on being able to operate in a safe, environmentally sound manner. Shell’s commitment to those basic principals is unwavering. Our Alaska Exploration Plans and Oil Spill Response Plans will continually be guided by our extensive Arctic expertise, solid scientific understanding of the environment and world-class capabilities,” said Pete Slaiby, VP Alaska.
Consistent with new regulatory requirements implemented in the wake of the Deepwater Horizon oil spill, Shell was required to prepare for a worst case discharge nearly five times that of their previous plan, to include planning for adverse weather conditions, and to develop special equipment and strategies that could respond to a loss of well control and a spill.
Shell has committed to provide for the following emergency contingencies: (1) the availability of a capping stack to shut off any flow of oil if other shut-off systems fail; (2) the capability to capture and collect oil from that stack; and (3) access to a rig capable of drilling a relief well that could kill the well, if necessary. The ready availability of a capping stack and an oil collection system are new commitments that apply lessons learned from the Deepwater Horizon tragedy to offshore oil and gas production activities.
Shell has proposed drilling up to six wells in the Chukchi Sea during the next two summer open water seasons within the Burger Prospect, located about 70 miles off the coast in approximately 140 feet of water.
“After an exhaustive review, we have confidence that Shell’s plan includes the necessary equipment and personnel pre-staging, training, logistics and communications to act quickly and mount an effective response should a spill occur,” said BSEE Director James A. Watson. “Our staff will maintain vigilant oversight over Shell to ensure that they adhere to this plan, and that all future drilling operations are conducted safely with a focus toward spill prevention.”
The approval issued Friday does not authorize Shell to begin drilling; Shell must still seek and obtain approval from BSEE for well-specific drilling permits prior to commencing operations, and BSEE would inspect and approve equipment that has been designed and deployed for the effort, including Shell’s capping stack, before activities could go forward.
Shell has also filed a OSRP for operations in the Beaufort sea. “The Beaufort Oil Spill Response Plan has been filed and is still being reviewed. It’s our understanding that review will be complete in the near future.” said Shell in a statement.
- Norway: E.ON to Drill Exploration Well near Skarv
- Expro Aims to Capitalise on Emerging Deepwater Market in China
- UK: New Premises for Kongsberg Maritime
- Australia: Shore ASCO to Build Darwin Marine Supply Base
- USA: Shell’s Chukchi Sea Oil Spill Response Plan Approved
- UK: DPS Offshore Buys Tritech’s Gemini Sonars
- Norway: PGS Reports Record Late Sales Revenues
- UK: Cargotec’s Chain Wheel Manipulator Wins Award
- Norway: STX OSV Delivers Island Captain
- USA: MOEX Agrees to Pay for Deepwater Horizon Incident
- U.S. Approves Shell’s Arctic Oil Spill Response Plan (gcaptain.com)
- USA: EAB Rejects Appeals for Review of Shell’s Noble Discoverer OCS Air Permits (mb50.wordpress.com)
Shell announced on its website that the Environmental Appeals Board (EAB) denied all petitions for review of Shell’s Noble Discoverer OCS air permits.
As a result, Shell has, for the first time, usable air permits that will allow the Noble Discoverer to work in the Alaska OCS beginning in 2012.
“Achieving usable permits from the EPA is a very important step for Shell and one of the strongest indicators to date that we will be exploring our Beaufort and Chukchi leases in July. That our air permits for the Noble Discoverer withstood appeal is a testament to the robust nature of the work we have done to have the smallest possible impact on the Arctic air shed and further validates that Shell is a company uniquely-positioned to deliver a world-class drilling program in the Alaska offshore. We look forward to continued progress on the permitting front and remain committed to working with regulators and stakeholders to achieve all of the permits necessary to drill in 2012.” reads Shell’s statement.
Wilderness Society Director, Lois Epstein, recently expressed her opinion in which she assumed that neither Alaskans, the Nation nor Shell is, “ready to drill safely in the Arctic.” Ms. Epstein signed-on to a letter that claims Shell should be denied Arctic air permits because emissions from their drilling rigs and oil spill response fleet will accelerate global warming.
Pete Slaiby, Shell Alaska VP responded that “Shell has been arctic-ready for years”, saying that Shell and others have successfully drilled over 35 wells in the Alaska offshore without incident and that “Shell, alone, has dedicated more resources to Arctic science in the last five years than all Federal agencies combined.”
- USA: Environmental Groups Challenge EPA’s Permits for Shell’s Drillships
- Shell’s Arctic Drilling Plans Suffer Another Blow
- USA: Shell Makes Important Step toward Arctic Offshore Drilling
- USA: Offshore Drilling Rig Noble Bully I Arrives in Gulf of Mexico
- Alaska: Apex Reports Shell Prepares Drilling Machinery for Chukchi and Beaufort Seas
- BP, Shell to partake in arctic drilling inquiry, Telegraph says (mb50.wordpress.com)
- Shell Arctic drilling permit affirmed (cbc.ca)
- Shell Just Got The Air Permits It Needs For Exploratory Arctic Drilling (businessinsider.com)
The Bureau of Ocean Energy Management (BOEM) on Friday, October 16, issued conditional approval of Shell Gulf of Mexico, Inc.’s revised Exploration Plan under leases in the Chukchi Sea Planning Area. In its Exploration Plan, Shell proposes drilling up to six exploration wells in Alaska’s Chukchi Sea beginning in the 2012 drilling season.
This decision follows the bureau’s completion of a site-specific Environmental Assessment that examined the potential environmental effects of the plan. The conditions of approval require Shell to comply with a range of important safety and environmental protection measures.
BOEM’s conditional approval does not authorize Shell to commence exploratory drilling in the Chukchi Sea. Shell must satisfy the conditions of BOEM’s approval, as well as obtain approvals from the Bureau of Safety and Environmental Enforcement (BSEE) regarding its Oil Spill Response Plan and well-specific applications for permit to drill.
“Our scientists and subject matter experts have carefully scrutinized Shell’s proposed activities,” said BOEM Director Tommy P. Beaudreau. “We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its Exploration Plan and all other applicable safety, environmental protection and emergency response standards.”
Shell acquired its leases in the Chukchi Sea in 2008 under Lease Sale 193, which BOEM recently reaffirmed after completing a Supplemental Environmental Impact Statement. All of these leases are subject to a series of stipulated requirements to mitigate operational and environmental risks, and the conditions for approval of Shell’s Exploration Plan build on and expand those requirements.
Among the conditions of approval is a measure designed to mitigate the risk of an end-of-season oil spill by requiring Shell to leave sufficient time to implement cap and containment operations as well as significant clean-up before the onset of sea ice, in the event of a loss of well control. Given current technology and weather forecasting capabilities, Shell must cease drilling into zones capable of flowing liquid hydrocarbons 38 days before the first-date of ice encroachment over the drill site. Based on a 5-year analysis of historic weather patterns, BOEM anticipates November 1 as the earliest anticipated date of ice encroachment. The 38-day period would also provide a window for the drilling of a relief well, should one be required.
- Shell clears hurdle in bid to drill in Alaska (marketwatch.com)
- Conditional OK for Shell’s Alaska offshore oil plan (reuters.com)
- Shell Gets Nod to Drill in Arctic (mercurynews.com)
Environmentalists fear the move by the privately held investment firm based in the US will accelerate exploitation of the region
Leo Hickman guardian.co.uk
Guggenheim Partners, a privately held investment firm based in the US, which manages more than $125bn worth of assets on behalf of its clients, has confirmed it is setting up a new fund dedicated to making investments in the Arctic region.
The news has been criticised by environmentalists who fear that it will further accelerate the exploitation by oil and shipping companies of the region which is being made even more accessible by climate change.
The fund was first revealed over the weekend at a conference held by the Juneau World Affairs Council in the Alaskan capital on the “politics of climate change“. Alice Rogoff, the publisher of Alaska Dispatch who is married to one of America’s wealthiest men, Carlyle Group co-founder David Rubenstein, told the conference that she had learned Guggenheim Partners was planning a fund “worth billions”. She added that it might concentrate first on building a privately funded icebreaker, which could then be leased to the US coastguard.
There have been growing calls in Alaska for a $1bn “heavy” ice breaker which could be used not just to help tackle any possible oil spills and perform search and rescue duties, but also further secure new shipping routes into the area. Shell confirmed last year that it is already building two of its own icebreakers in preparation of it being granted an extended permit to drill in the Chukchi and Beaufort seas from next year onwards.
Mead Treadwell, Alaska’s lieutenant general, said the fund was a “major announcement” for the region, adding that the Alaskan Arctic also currently lacks a deepwater port. Without such a port available, he said, oil companies would incur extra costs by having to supply a “flotilla” of support vessels when drilling at sea.
The Guggenheim Partners website posted a link to an Alaska Dispatch story about the fund, but a company spokesman refused to provide any specific details. “We are in the very early planning stages for an Arctic investment fund,” said Jeffrey Kelley. “At this point in time it would be premature to comment further about potential structure or investment parameters.”
A permanently secured route through the Bering Strait up into the Arctic would be a major boon to shipping companies and resource extractors. Last month, Nordic Bulk Carriers, a Danish shipping company, said it would save a third of its usual costs and nearly half the time shipping goods if a route to China was available through the Arctic instead of via the Suez Canal and the Indian Ocean.
Ben Ayliffe, an Arctic campaigner for Greenpeace, criticized the fund: “We shouldn’t be surprised that the industry which got us into the worst global economic crisis in living memory now has the planet’s last great wilderness in its sights. But, even by its own standards, it would seem exceedingly short-sighted to pour billions of dollars into the extraction of climate-changing fossil fuels just as scientists warn that the Arctic’s summer sea ice is entering what they call a ‘death spiral’.”
Greenpeace is campaigning for the Arctic to be better protected.
- Time to Take Alaska Out of the Icebox (gcaptain.com)
- Here’s Why You Need To Watch The Burgeoning Relationship Between China And Greenland (mb50.wordpress.com)