Salazar: Shell drilling delay due to barge problem

ANCHORAGE (AP) — Shell Oil's delay in drilling Arctic Ocean exploratory wells off Alaska's northern shores is not due to heavy ice or federal regulators, according to Interior Secretary Ken Salazar.

The setback to drilling this year during the short open water season, he said, is due to Shell's inability to complete construction on a spill response barge that remains in Washington state.

"If they had got it done, they might be up there today, because the waters in the Chukchi (Sea) around the so-called Burger find are already open," he told reporters Monday. "So it's not a matter of ice. It's a matter of whether Shell has the mechanical capability to be able to comply with the exploration effort that had been approved by the government."

The "curtain of opportunity for 2012" is closing, Salazar said as he wrapped up a three-day visit to the state. Drilling in the Chukchi and Beaufort seas will depend on obtaining Coast Guard certification for the spill response vessel in the next 10 to 20 days, he said.

"We don't have a lot of time," Salazar said. "Whatever activity takes place up there is activity that will have to take place in time to be able to complete it before the conditions ice over."

The containment barge, the Arctic Challenger, will be the company's fourth-line of defense against a spill, along with blowout preventers, shear rams and a capping stack, said Shell Alaska spokesman Curtis Smith. The barge will carry a dome-shape containment system that could be lowered onto a leaking well to funnel oil and gas to a barge.

Shell's goal remains to complete as many wells as possible this year, Smith said. The company also will pursue top holes and mud-line cellars, holes in the sea floor for wellhead equipment such as blowout preventers, that would put the company ahead for 2013 drilling, Smith said.

Shell has made no request to modify its original 2012 drilling proposal, Smith said, but is considering it.

In the wake of the Deepwater Horizon disaster in the Gulf of Mexico, Salazar said, the federal government overhauled how the country regulates ocean energy. Those standards will be enforced in the Arctic with Shell and other leaseholders.

"I will only say this: I will hold their feet to the fire in terms of making sure that we are doing everything we can to abide by the standards and regulations that we have set and to make sure that the environment in the Arctic seas are protected by their activities," he said.

Shell has invested more than $4 billion in Arctic offshore drilling. Salazar repeated his belief that Shell can drill exploratory wells safely.

"The exploration that takes place, if it does take place, will take place under the most cautious, highest guarded activity ever in the history of any kind of ocean energy development," he said.

08/15/2012 - 6:26am