By Yereth Rosen
ANCHORAGE, Alaska Feb 11 Royal Dutch Shell
Plc's two offshore rigs in Alaska will head to Asia for
repairs and upgrades, the Anglo-Dutch oil company said on
Monday, casting doubts on its plan to do any drilling off the
state's coast this year.
The departures, expected within weeks, will draw a curtain
on the rigs' accident-prone first year at work in the Arctic.
Shell's multi-billion-dollar move into the environmentally
sensitive U.S. waters - the first since the Macondo disaster of
2010 - is being watched closely by the industry.
Even before Shell's Kulluk drillship ran aground near Kodiak
Island on Dec. 31 after escaping its tow lines, the 2012
drilling program was stalled by troubles with support vessels
and regulatory scrutiny of the other rig, the Noble Discoverer.
After the Arctic drilling season closed at the end of
October, a fire then broke out on the Discoverer.
There were even engine failures on the Aiviq, the specially
designed ship pulling the Kulluk, before it lost its tow
Shell has already spent $4.5 billion on its program to seek
oil in the Chukchi and Beaufort seas, but the Kulluk incident
combined with the many other challenges led the U.S. Department
of Interior to launch a review of its program.
"It's time for Shell to re-evaluate whether it makes sense
to continue pouring money into this complex and difficult
drilling effort," Lois Epstein, Arctic program director for The
Wilderness Society, said in a statement on Monday.
Shell said in a statement that no decision had been made yet
about the 2013 Alaska offshore drilling program.
The company decided the Kulluk could get better services in
Asia than at the Seattle-area shipyard where it was headed on
its ill-fated crossing of the Gulf of Alaska.
"We haven't determined yet where in Asia," said Curtis
Smith, Shell's spokesman in Alaska. "A number of shipyards in
Asia have the drydock facilities and capacities to better
execute these types of projects."
The Kulluk, anchored since Jan. 8 in Kiliuda Bay off the
eastern side of Kodiak Island, sustained flooding damage,
including damage to its generators, according to early
As for the Discoverer, owner Noble Corp will move it
to a shipyard in South Korea, Shell said. The drillship, costing
Shell $244,000 per day under its contract, has been docked for
several weeks in Seward, Alaska, where inspections by the U.S.
Coast Guard revealed deficiencies in environmental and safety
Shell expects the two ships to depart Alaska in the next
three to six weeks, starting a journey that will take another
two to four weeks, Smith said.
"In the meantime, we are exploring a range of options for
exploration work offshore Alaska in 2013," the company said in a
statement. "Shell remains committed to safely exploring for
Alaska's offshore energy resources."
Smith said he could not comment beyond that on plans for
drilling in 2013.