Shell drops drilling to depth in Arctic after spill containment device damaged

Shell has dropped plans to drill exploration wells to potential hydrocarbon depths after a spill containment dome on the company's Arctic Challenger response barge was damaged during a test.

The company will continue with the drilling of "top holes" or the top part of wells in preparation for continued drilling in 2013.

Shell spokesman Curtis Smith said the company hopes to resume work on its Chukchi Sea exploration well in mid-week. A massive ice floe that caused Shell to pull its drillship from the site has now passed by, he said.

Meanwhile, Shell is investigating the cause of damage to a containment cap on the Arctic Challenger barge, which was undergoing tests in Puget Sound.

"We don't yet know the cause. It (the damage) is extensive enough that we will not be able to get to Alaska in time to do the drilling (to depth)," he said.

Smith said he couldn't say how many "top holes" the company may now be able to complete. Given the dynamic situation with ice and weather, Shell is not willing to make a prediction, he said. However, the preparation work will allow the company to get a jump-start in completing wells in 2013.

The ice floe (30 miles long by 11 miles wide) has passed over the Burger prospect and there is now open water, but Shell will wait until there is a sufficient distance between the ice and the prospect before bringing the Noble Discoverer back (i.e. The wind may change).

"We expect to be back on site in mid-week," he said.

Alaska Sen. Lisa Murkowski said the company made the right decision.

"I’m disappointed with the news but believe Shell has made the right decision, keeping safety paramount," Murkowski said in a statement.

The barge was in Puget Sound undergoing tests for final certification when the damage occurred. Shell has not yet provided information on the extent of the damage or what caused it.

U.S. Interior Department rules require the spill response barge to be on the scene in the Arctic when Shell drills below its currently-approved depths of about 1,400 feet on exploration wells in the Chukchi and Beaufort Seas.

Shell has two drill vessels and support ships in the Arctic including the drillship Noble Discoverer in the Chukchi Sea, and the mobile drill structure Kulluk in the Beaufort Sea.

The Discoverer had started preparations for drilling but pulled off the well to avoid floating ice. Work is expected to resume soon.

The Kulluk is awaiting the completion of the fall bowhead whale subsistence hunt by Inupiat whalers before drilling starts in the Beaufort Sea.

Inupiat whalers are still working to complete their subsistence harvest, Smith said. Bad weather has delayed the whalers, he said.