Shell Forced to Reduce the Scale of their Arctic Exploration Plans

Shell’s plans to drill up to five wells in the Arctic Waters off Northern Alaska have been hit by delays due to late thawing sea ice along the coast, and interruptions in the construction of its emergency oil spill containment barge.

Peter Voser, the CEO, has stated that they plan to drill just two exploration wells in the Chukchi and Beaufort seas. Although, in order to take full advantage of the drilling rigs and exploration vessels that are already in the area, Shell will consider top-hole drilling a few wells. This is the process whereby a well is drilled, but stops before it actually reaches a reservoir of hydrocarbons. Shell can then return to the site in future to complete the well (a bit like laying the foundations for a house, in preparation for the day you want to build it).

The Arctic drilling season is notoriously short due to the threat of sea ice during most of the year. Normally ice encroaches on the area of the planned drill sites around the start of November, but this year, due to unusually thick shore ice taking much longer to melt, the sea temperatures are lower and it is predicted that the ice could arrive earlier, cutting the season by several precious weeks.

Shell must also wait for the completion of its Arctic Challenger barge, a major part of its oil spill containment system. Important safety and operational systems are still to be installed, and then the whole barge must pass certain tests upon inspection by the Coast Guard. Only then will it earn a ‘certificate of inspection’ and be fit for use on the open sea.

By. Joao Peixe of Oilprice.com