Shell is dropping plans to drill in the Arctic waters off Alaska this year after a 2012 drilling season marred by equipment failures and ongoing investigations by the Coast Guard, Interior Department and the Department of Justice.
Shell’s announcement came as the Justice Department investigates 16 safety and environmental violations the Coast Guard found in late November on the Noble Discoverer, one of the company’s two Arctic drilling rigs. The other rig, the Kulluk, is the subject of a Coast Guard investigation into the circumstances of its grounding Dec. 31 off Alaska’s Kodiak Island.
The Interior Department has launched a broader review of Shell’s Arctic problems, which include the containment dome on its spill response barge being “crushed like a beer can” during a test off Washington state. The Environmental Protection Agency says both Shell drilling rigs violated air-quality standards. And the Noble Discoverer rig dragged anchor and almost grounded in Alaska’s Dutch Harbor.
Shell has suspended drilling operations in Arctic waters for 2013 after a series of mechanical failures. However, the oil giant states that it remains committed to exploration in the region.
In what is a huge setback for the company’s Arctic plans, the firm has abandoned plans to drill off the north coast of Alaska this year, after its Kulluk oil drilling ship ran aground during severe storms last month.
Anchorage – the name of the company’s project aimed at providing the US with a new source of domestic oil – states that its pause in drilling activities is “to prepare equipment and plans for a resumption of activity at a later stage”.
“We’ve made progress in Alaska, but this is a long-term programme that we are pursuing in a safe and measured way”, said Shell president Marvin Odum.
“Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”
seahorse3 wrote:Plant, you are proselytizing the "devil"
seahorse3 wrote: quit blaming the "devil."
seahorse3 wrote:You win Plant. You have beat me.
They figured out the key to Arctic oil drilling.
But it took a long time.
The suits over at Shell (NYSE: RDS-A) have been in the hot seat over the past year or so after burning through more than $5 billion to tap Arctic oil reservoirs in the Chukchi Sea.
As I've discussed in these pages before, the risk-versus-reward scenario for Shell's Chukchi Sea adventure never made much sense. The independent oil producer simply had too little experience in Arctic oil production and too many mishaps last year (including a damaged containment dome that was crushed by the weight of unforgiving Arctic waters) to make it a particularly profitable venture...
Moreover, after two of President Obama's advisors called for a permanent halt to oil exploration in the Arctic, long-time investors got skittish. Peak oil politics at work.
Truth is — and I've said this time and time again — Shell would've been better off working with the Russians to tap Arctic oil treasures, as producers have more experience in those climates and the regulatory environment is less stringent.
Certainly this is what Exxon (NYSE: XOM) did a couple of months ago after signing a deal with Russian petroleum giant Rosneft (PINK SHEETS: RNFTF). Back in February, the two companies approved a deal that resulted in some easy money for Russia and an additional 234,000 square miles of oil exploration for Exxon in the Russian Arctic.
It looks like Shell is now heading down the same path...
Plant, who is that guy?Plantagenet wrote:Don't be silly. You the person who keeps talking about the devil, not me.
You had to go and post something, giving him the opportunity to avoid answering my question.pstarr wrote:I imagine that is how Plant sees the President of the United States.
I know. It ain't right.
Keith_McClary wrote:Plant, who is that guy?Plantagenet wrote:Don't be silly. You the person who keeps talking about the devil, not me.
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