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Posts on ‘January 3rd, 2013’

Why Shell Should Just Quit Its Alaska Drilling Fiasco

Christopher Helman, Forbes Staff: I’m based in Houston, Texas. Energy capital of the world.

Royal Dutch Shell is taking flack from all directions today as a team of salvage experts try to figure out how to free the $290 million Kulluk floating drilling rig that ran aground on the coast of Alaska Monday. The crew of the Kulluk has been rescued, and thanks to a 3-inch steel hull none of the diesel fuel onboard has spilled. But this latest fiasco in a long line of mishaps further underscores the risks of exploring for oil in the Arctic Chukchi and Beaufort seas.

Shell has sunk more than $5 billion into its Alaskan venture since acquiring leases for $2 billion four years ago, and has precious little to show for it. In 2010, when Shell thought it was ready to go, it was stopped by the federal offshore drilling moratorium in the wake of BP‘s disaster. Then there were years of delays as Shell made improvements to the Kulluk rig to meet draconian EPA regulations on diesel emissions. Then in 2012 Shell faced permitting delays on its Arctic Challenger barge, which is to meant to help capture oil in the event of a Deepwater Horizon-style blowout. Worse, the Challenger was damaged during testing in Washington state, requiring weeks of repairs. In July the anchors of the Kulluk’s sister ship, the Noble Discoverer, came loose and dragged across the seafloor. In the short drilling season between July and October, Shell managed only to begin drilling two wells, in the Berger and Sivulliq prospects, before having to pull up and clear out before ice set in. It only got that little bit of work after the Bureau of Ocean Energy Management approved Shell’s request that it be allowed to drill a little later into the season than is generally thought wise.

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Shell Statement – Kulluk Debacle

Shell Statement – Kulluk Response

01/02/2013

ANCHORAGE, Alaska, January 2, 2013 – An assessment team safely boarded Shell’s Kulluk drillship to evaluate its condition after it ran aground in heavy seas in Alaska on December 31. The team spent several hours onboard and was able to confirm earlier indications from multiple flyovers by the US Coast Guard that the Kulluk remains firmly aground and is stable, based on the inspections performed to date. The team also confirmed there are no signs of environmental impact, and there has been no leakage of the low-sulphur diesel fuel or hydraulic fluid stored in strong tanks onboard the vessel.

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Abandoned Shell drilling ship life boats washed ashore

A Coast Guard Captain spotted four life boats, described as debris, which had drifted ashore from the ill-fated Shell drilling ship, the Kulluk, abandoned, battered and aground in an environmentally important area. Shell lawyers must be busy assessing the implications from the ship wreck, including salvage and insurance issues. According to a Reuters report, the Kulluk “dragged two vessels trying to control it more than 10 miles toward a wave-battered rocky shore before the crews cut it loose to save themselves.” The stricken 30 year old ship, was owned by Royal Dutch/Shell and operated by Noble Corp. It should have been sent to the breakers yard long ago or perhaps offloaded to BG Group, who have a liking for Shell relics.

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Critics say grounding of Shell drill ship shows company not ready for Arctic offshore drilling

By Associated Press, Updated: Thursday, January 3, 6:59 AM

ANCHORAGE, Alaska — The grounding of a petroleum drilling ship on a remote Alaska island has refueled the debate over oil exploration in the U.S. Arctic Ocean, where critics for years have said the conditions are too harsh and the stakes too high to allow dangerous industrial development.The drilling sites are 1,000 miles from Coast Guard resources, and environmentalists argue offshore drilling in the Arctic’s fragile ecosystem is too risky. So when a Royal Dutch Shell PLC ship went aground on New Year’s Eve on an uninhabited island in the Gulf of Alaska, they pounced — saying the incident foreshadowed what will happen north of the Bering Strait if drilling is allowed.

For oil giant Shell, which leads the way in drilling in the frontier waters of the U.S Arctic, a spokesman said the grounding will be a learning experience in the company’s years long effort to draw oil from beneath the ocean floor, which it maintains it can do safely.

Though no wells exist there yet, Shell has invested billions of dollars gearing up for drilling in the Beaufort and the Chukchi seas, off Alaska’s north and northwest coast.

The potential bounty is high: The U.S. Geological Survey estimates 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas exist below Arctic waters.Environmentalists note the Beaufort and the Chukchi seas are some of the wildest and most remote ecosystems on the planet. They also are among the most fragile, supporting polar bears, the ice seals they feed on, walrus, endangered whales and other marine mammals that Alaska Natives depend on for their subsistence culture.

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Why Shell does not sue the Donovans

By John Donovan

I know that many people must be baffled why Shell does not take legal action against us bearing in mind that some articles authored by us may appear rather forthright.  The reason why we are not buried in Shell injunctions is because of meticulous research to ensure we can substantiate in court everything we publish. In other words, we have the documentary evidence to prove that what we say is true.  This thorough research will be evident in a pending article about Royal Dutch Shell CFO Simon Henry. We will put detailed information into the public domain about his involvement in the Shell reserves scandal. The third in our series of articles about the scandal mired years of Chris Finlayson at Shell is also in the pipeline. One can of worms after another. Not the ravings of disgruntled lunatics, but provable unpalatable fact.

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