Shell abandons Alaska drilling

2013-02-28 07:30
Royal Dutch Shell has halted its drilling in the Arctic one day after the work began because sea ice is moving toward the company's drill ship. (Dave Martin, AP)

Royal Dutch Shell has halted its drilling in the Arctic one day after the work began because sea ice is moving toward the company's drill ship. (Dave Martin, AP)

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Washington - Royal Dutch Shell will not be drilling for oil in Alaska's Beaufort and Chukchi Seas this year, the company said on Wednesday, a widely expected decision that follows a series of setbacks in the 2012 season.

"Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people," said Marvin Odum, director, Upstream Americas.

Shell has spent more than $4.5bn on its search for oil in the Chukchi and Beaufort seas since it won licences to drill there in 2005. Its 2012 season ended with the grounding of one of its two drill ships after a storm while it was being towed to Seattle for the winter.

The company said earlier in February that its two rigs would head to Asia for repairs and upgrades, casting further 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 US waters - the first since the Macondo disaster of 2010 - is being watched closely by the industry.

Even before the Kulluk drill ship ran aground near Kodiak Island on 31 December after escaping its tow lines, the 2012 drilling programme was stalled by troubles with support vessels and regulatory scrutiny of the other rig, the Noble Discoverer, which belongs to Noble.

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 connection.

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