November 7, 2013 / 8:10 AM / 6 years ago

Shell moves to keep open 2014 Alaska drilling option

LONDON, Nov 7 (Reuters) - Royal Dutch Shell, which abandoned this year’s offshore Alaska drilling programme after a series of setbacks in 2012, has submitted a stripped-down exploration plan to U.S. authorities in a move that aims to keep its options open to drill in summer 2014.

“Shell submitted revisions to its previously approved Plan of Exploration Wednesday, Nov. 6 to the Department of Interior; this process is required to keep the company’s 2014 exploration options viable,” the company said in a statement.

“The plan details Shell’s exploration program for multiple wells in the Chukchi Sea.”

Shell’s 2012 plan included drilling in the Beauforts Sea as well. Both seas are off Alaska’s remote northern coast and are inaccessible for drilling in the winter.

The Chukchi is the more westerly of the two. Finance director Simon Henry said last week any new drilling programme would be focused on the Chukchi only.

Shell’s Arctic campaign was beset by accidents and a rising tide of environmental protests and regulatory scrutiny in 2012.

Problems came to a head at the end of that year when the Kulluk, a rig that had been drilling in the Beaufort Sea, came loose from a vessel towing it south for the winter and ran aground near Kodiak Island.

Henry said last week that the Kulluk, one of a handful of specialised Arctic drilling rigs worldwide, would not be returning to the Beaufort Sea and Shell had commissioned a replacement.

Shell has spent about $5 billion on the search for oil in Alaska’s Arctic seas since it won licences to drill there in 2005.

Analysts say the allure of Alaska’s offshore and other Arctic seas for oil drillers remains strong given the complications of politics and violence they face in other parts of the world.

Drilling in the cold, remote waters is technologically difficult and expensive, but dwindling reserves elsewhere have forced oil firms to look deeper offshore.

The seas are shallow and are estimated to contain 13 percent of the world’s undiscovered oil and 30 percent of its gas.

“We will continue to take a methodical approach to this exploration phase and will only proceed if the program meets the conditions necessary to proceed safely and responsibly,” the company said.

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