Shell Oil begins exploratory drilling in Alaska's Beaufort Sea

The Anchorage Daily NewsOctober 4, 2012 

— Shell Oil is now drilling wells in two Arctic seas off Alaska's northern coast.

Drilling began Wednesday afternoon in the Beaufort Sea after the end of an Inupiat whale hunt, according to Curtis Smith, spokesman for Shell Alaska.

The company resumed drilling in the Chukchi Sea on Sept. 23 after a two-week suspension due to encroaching sea ice, he said.

But Shell still won't be able to drill deep enough to reach oil this year. An oil spill containment dome, an essential piece of safety gear, was damaged during testing last month in a Bellingham shipyard.

Shell had agreed to hold off drilling in the Beaufort until two villages, Kaktovik and Nuiqsut, concluded their whaling seasons. The Alaska Eskimo Whaling Commission notified Shell on Wednesday that it could drill, Smith said. Kaktovik just landed its second whale of the fall hunt, and Nuiqsut earlier had success. A Kaktovik crew struck a third whale but lost it and village whaling captains haven't decided whether seek permission to try again, resident Annie Tikluk said.

At around 2:45 p.m., Shell began drilling with the Kulluk, a conical drilling rig, over its Sivulliq prospect some 20 miles offshore in the Beaufort Sea, Smith said. It was able to anchor over the site a few days ago even though whaling was still underway, he said.

In the Chukchi Sea, Shell is drilling with the Noble Discoverer, anchored over its Burger prospect.

Shell says its 2012 season is shaping up to be a success despite a slow start and limits on drilling to about 1,400 feet, far short of oil-rich zones. Interior Secretary Ken Salazar has said Shell cannot drill into geological formations that contain oil until the oil spill containment system, which sits on a barge, is complete.

Shell is investigating what went wrong in the testing of the containment dome, designed to be lowered over an out-of-control well to funnel oil, natural gas and contaminated water back to the barge, the Arctic Challenger.

It doesn't plan to release its findings to the public, Smith said. But it fully expects the containment system to be repaired and approved by regulators for deployment during the 2013 drilling season, he said.

Shell contractor Superior Energy Services owns and will operate the barge and containment system. But Smith said that ultimately, "it's under the banner of Shell."

Shell is drilling what it calls "top-holes," or partial wells that it expects to revisit and complete next year.

Federal rules imposed on publicly traded companies prohibit it from providing details on how that work is progressing until the season wraps up, Smith said.

"Yes, it's been a tough summer in many ways. But it's also been a really exciting summer," he said. "I know it's slower and shorter and not as deep as we want, but to shake all this out, it still feels pretty good."

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