Shell Arctic plans anchored with its Alaska drillship

ANCHORAGE, Alaska Thu Jan 24, 2013 5:16pm EST

ANCHORAGE, Alaska Jan 24 (Reuters) - A Shell drilling rig that ran aground near Alaska's Kodiak Island remains anchored in a nearby sheltered bay three weeks later, and its fate is as unknown as whether the oil company will be able to drill in waters off the state this year.

The damaged Kulluk drillship is a key part of Royal Dutch Shell's ambitious plan to drill for oil in two parts of the Arctic Ocean. Beyond its work last year in the Beaufort Sea off Alaska's northern coast, it serves as a required backup for Shell's contracted rig, the Noble Corp-owned Discoverer.

"Once we know more about the Kulluk's condition, we'll know more about its immediate and long-term role in our ongoing exploration," Curtis Smith, Shell's spokesman in Alaska, said of the conical-shaped vessel built specifically for Arctic ice conditions. "There is no timetable. This is a process that needs to be extremely thorough, and we're treating it as such."

The Kulluk was being pulled across the Gulf of Alaska - part of a long trek from the Beaufort to its maintenance shipyard near Puget Sound - when it broke free of tow lines in a storm and grounded off Sitkalidak Island on the night of Dec. 31.

It was towed 17 days ago from its grounding site to Kiliuda Bay, a designated refuge area on the east side of Kodiak Island, where it has been anchored in place and tethered to two tugs, said a spokesman for the command team overseeing the move.

While no fuel tanks were breached, the Kulluk had flooding damage to its power system and other areas, according to early assessments. The U.S. Coast Guard-led incident command team said last week that its condition was "consistent with what is expected from a vessel of this type being on hard ground."

Other details about its condition were not available on Thursday. "The assessment's still ongoing at this point," said Jim Appleby, a Shell official on the incident command team.

The Kulluk's hull was examined by a team of 12 divers and a remote-operated vehicle. Those on-site examinations were completed last week, but the results have yet to be released.

All this means more uncertainty for the Discoverer, which did some drilling last year for Shell in the more remote but potentially more oil-rich Chukchi Sea off northwestern Alaska.

"We don't have any insight into how this 2013 drilling season may play out, but I can assure you that every effort is being made right now by both companies to prepare the vessel for operations in 2013 in some format," Noble Chief Executive David Williams said on a call with investors on Thursday.

Williams said the past year in Alaska had revealed areas where Noble must improve, but he hoped it could apply the experience and geographic insight it gained in the near future.

Both the Kulluk and Discoverer operate with a fleet of support vessels, and each one is required, under Shell's exploration permits, to be available to drill a relief well in case the other drillship is involved in a well blowout.

The Coast Guard had found safety and environmental deficiencies with the Discoverer that Noble planned to address through maintenance. But with so many resources devoted to the Kulluk, Shell has been unable to move it to the Puget Sound area, Smith said, and there is no timetable yet for that.