The environmental group Oceana has obtained a copy of a letter from Shell to the U.S. Dept of the Interior revealing that the oil giant is seeking to pause Shell’s leases for five years. Approval would effectively extend the current drilling deadlines. Shell’s plans to drill off the Alaska coast have already been heavily delayed by a series of avoidable mishaps, initially caused by negligence and incompetence, and subsequently by a desire to evade tax.
Extracts from a related Bloomberg article:
Shell Seeks 5 More Years for Arctic Oil Drilling Drive
Royal Dutch Shell Plc (RDSA) is asking the Obama administration for five more years to explore for oil off Alaska’s coast, saying set backs and legal delays may push the start of drilling past the 2017 expiration of some leases.
Shell, which has spent eight years and $6 billion to explore the Arctic’s Beaufort and Chukchi seas, said in letter to the Interior Department that “prudent” exploration before leases expire is now “severely challenged.”
“Despite Shell’s best efforts and demonstrated diligence, circumstances beyond Shell’s control have prevented, and are continuing to prevent, Shell from completing even the first exploration well in either area,” Peter Slaiby, vice president of Shell Alaska, wrote to the regional office of the Bureau of Safety and Environmental Enforcement.
Shell’s plans to produce oil in the Arctic were set back in late 2012 by mishaps involving a drilling rig and spill containment system, and the company has been sued by environmental groups seeking to block the Arctic exploration. The Hague-based company halted operations in 2012 to repair equipment and hasn’t resumed its maritime operations.
The July 10 letter from the company, released today by the environmental group Oceana that got it after a records request, seeks to pause Shell’s leases for five years, in effect extending the deadline to drill on its Beaufort and Chukchi leases.
While Shell cited events outside its control, it’s efforts have been beset by its own missteps, including the grounding in rough seas of one of its drilling rigs on the last day of 2012.
The U.S. Coast Guard said in April that a desire to avoid millions of dollars in Alaska state taxes played a role in Shell’s decision to move the rig in rough seas.
In its letter, Shell said it needed certainty from the U.S. before investing beyond the $6 billion it’s already spent.