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Aggressive bidding after reserves scandal put Shell on path to Arctic disappointment

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$7 billion bust in the Arctic Ocean

Screen Shot 2015-10-05 at 14.03.31By Jennifer A. Dlouhy: 5 Oct 2015

WASHINGTON — Shell’s dreams of an Arctic oil bonanza were dashed with disappointing results from a critical exploratory well this summer, but they were in full force seven years ago, when the company aggressively outbid competitors to nab drilling rights in the Chukchi Sea.

Reeling from a scandal involving overstated reserves and desperate to replenish its portfolio, Royal Dutch Shell spent $2.1 billion buying up those Chukchi Sea leases, vastly outspending the competitors who plunked down just $800 million combined in the same government auction. read more

Shell to cut 1,300 jobs in Malaysia over two years

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By Collin Eaton: 29 Sept 2015

HOUSTON — Royal Dutch Shell’s oil unit in Malaysia said it will cut 1,300 jobs, or about 20 percent of its Malaysian workforce, over the next two years as it restructures itself.

Shell Malaysia said Tuesday it is trying to become a more efficient company but gave few details beyond disclosing the coming staff reductions. It said it has made “adjustments” to its upstream portfolio but didn’t elaborate.

“Shell Malaysia is preparing itself to be more competitive in a low oil price environment,” Shell Malaysia Chairman Iain Lo said in a written statement. “Continuing business as usual is not sustainable. We are taking difficult, but necessary action.” read more

Shell’s Arctic oil well comes up dry

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Screen Shot 2015-08-13 at 11.35.25September 28, 2015 | By Jennifer A. Dlouhy

WASHINGTON — After spending $7 billion and seven years searching for oil under Arctic waters, Royal Dutch Shell on Monday said its quest had come up dry.

Shell announced that its exploratory oil well in the Chukchi Sea north of Alaska encountered “indications of oil and gas” that are “not sufficient to warrant further exploration” — a significant blow for the Anglo-Dutch firm that had hoped to find a multibillion barrel crude reservoir in those remote waters.

“Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.,” said Marvin Odum, director of Shell Upstream Americas. “However, this is a clearly disappointing exploration outcome for this part of the basin.” read more

Records detail equipment failure on Arctic drilling rig

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Screen Shot 2015-08-13 at 11.35.25“The company’s repeated failures in basic readiness tests show that when things go wrong in the Arctic ocean, it will be a disaster…”

By Jennifer A. Dlouhy: August 30, 2015

WASHINGTON — Newly released documents reveal the extent of problems with anti-pollution equipment on a Shell-contracted Arctic drillship earlier this year.

The records, provided by the U.S. Coast Guard in response to a Freedom of Information Act request, also describe a botched fire drill by the crew of another Shell-contracted drilling rig months before it began boring an exploratory oil well in the Chukchi Sea.

That rig, the Transocean Polar Pioneer, was moored in Seattle and being prepared for its Arctic mission in May, when the Coast Guard conducted an initial inspection and two emergency drills onboard. read more

Shell Oil accidentally spills hundreds of thousands of pounds of toxic gas in Deer Park

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Dylan Baddour, Houston Chronicle: Tuesday, August 11, 2015

On Sunday morning, hundreds of thousands of tons of toxic gas were accidentally released from the Shell Oil facility in Deer Park.

According to reports from the Texas Commission on Environmental Quality, 326,166 pounds of butadiene escaped through an open valve on a spherical tank between 10:40 am and 11:35 am.

Neil Carman, a chemist with the Sierra Club of Texas and a former power plant inspector for the TCEQ, said that butadiene is a known human carcinogen, but that its molecular structure allows it to dissipate quickly in the hot summer air. The chemical is commonly expelled in car exhaust, but Carman said the quantity in the Shell incident was concerning. read more

Senate bill would give oil companies a decade more to drill in Arctic leases

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Screen Shot 2015-06-30 at 21.06.27By Jennifer A. DlouhyJuly 27, 2015

WASHINGTON – Shell and other oil companies with leases in U.S. Arctic waters could get an extra 10 years to develop them under a proposal advancing in the Senate.

Sen. Lisa Murkowski, R-Alaska, embedded the Arctic lease provisions in a broader bill that also would lift the U.S. crude export ban, expand offshore drilling and give coastal states a greater share of revenue from the activity.

The measure is slated for action in Murkowski’s Energy and Natural Resources Committee this week and next. If the panel approves the offshore drilling legislation, that would prime it for floor consideration after the Senate’s August recess and position it as a possible addition to a comprehensive energy package also moving through the committee. read more

Environmentalists insist feds must block Shell’s Arctic drilling while icebreaker is away

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Screen Shot 2015-06-30 at 21.06.27By Jennifer A. Dlouhy: 15 July 2015

WASHINGTON — The Obama administration cannot allow Shell to launch exploratory oil drilling in the Arctic Ocean — even initial site preparation — without the company’s two contracted icebreakers on site, environmentalists argue.

One of those icebreakers, the MSV Fennica, is headed to Oregon for repairs after its hull was gouged July 3, and it could be weeks before it is able to patrol the waters around Shell’s drilling site in the Chukchi Sea. read more

Shell’s vessel Fennica took short cut through shallow water?

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Screen Shot 2015-07-07 at 19.49.22Shell’s vessel Fennica took short cut through shallow water?

Damaged Arctic icebreaker’s route questioned

Posted on July 10, 2015 | By Jennifer A. Dlouhy

WASHINGTON — New marine tracking data shows a Shell-contracted icebreaker may have crossed through shallow waters that offered little clearance between the vessel’s bottom and the ocean floor before a 3-foot hole was discovered in its hull.

The Automatic Identification System data — location information captured every minute from the MSV Fennica — shows its July 3 route away from the Alaska Port of Dutch Harbor before a leak identified by a marine pilot and other crew onboard the icebreaker forced it to turn back. read more

Approval requested for repairs to icebreaker in Shell’s Arctic quest

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Screen Shot 2015-06-30 at 21.06.27By Jennifer A. Dlouhy: 9 July 2015

WASHINGTON – Shell is making plans to repair an icebreaker that plays a pivotal role in its Arctic drilling program, even as clues emerged Thursday about what might have torn a meter-long gash in the vessel.

Arctia Offshore, the owner of the Shell-contracted MSV Fennica, has asked the U.S. Coast Guard to approve plans for sealing the hole in the ship’s hull. As of late Thursday, a final ruling had not been made.

But there was new information on what might have gouged the vessel as it traveled away from the Alaska port of Dutch Harbor on July 3. read more

Shell’s Arctic icebreaker damaged in Alaska

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Screen Shot 2015-07-07 at 19.49.22By Jennifer A. Dlouhy: 7 July 2015

WASHINGTON — Shell’s drive to resume Arctic drilling this summer has hit another speed bump, with the discovery of a hole in the hull of an ice management vessel meant to safeguard the company’s operations in the Chukchi Sea.

The MSV Fennica was on its way from Dutch Harbor, Alaska to the Chukchi Sea on Friday when a ballast tank leak was discovered by crew members and a certified Alaska marine harbor pilot on board the vessel.

The 22-year-old icebreaker has since returned to the port in Dutch Harbor and is being examined by marine experts, but it is uncertain how quickly the breach in its hull can be repaired and whether this will delay Shell’s hopes to begin drilling an oil well in the Chukchi Sea later this month. read more

Obama administration delivers big blow to Shell’s Arctic drilling plans

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Obama administration delivers big blow to Shell’s Arctic drilling plans

By Jennifer A. Dlouhy

WASHINGTON — The Obama administration delivered a major blow to Shell’s Arctic drilling plans on Tuesday, by ruling that wildlife protections bar the company from simultaneously boring two wells into the Chukchi Sea this summer.

The decision will force Shell to scale back its hopes of completing two exploratory oil wells in waters north of Alaska this summer and is another setback for the firm that has spent seven years and $7 billion trying to find crude in the Arctic Ocean. read more

Sea ice could keep Shell away from the Arctic until mid July

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Sea ice could keep Shell away from the Arctic until mid July

Posted on June 29, 2015 | By Jennifer A. Dlouhy

WASHINGTON — Thick sea ice could clog the site of Shell’s planned oil wells in the Arctic Ocean until late July, potentially shaving a week off the company’s already narrow window for exploratory drilling in the region.

Shell Oil Co. is still waiting for four federal authorizations to launch any of the work, including drilling permits for two wells in its Burger prospect about 70 miles northwest of the Alaska coastline. With all approvals in hand, the company could begin moving drilling rigs and other vessels through the Bering Strait and toward the Chukchi Sea as early as July 1 and begin boring a well as soon as July 15. read more

Shell’s Arctic drilling plans may hit permitting snag

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June 23, 2015 | By Jennifer A. Dlouhy

WASHINGTON — Shell’s plans to bore two wells in the Arctic Ocean this summer may be jeopardized by an obscure permitting requirement that effectively bars drilling operations close to each other in waters off Alaska.

The restriction highlighted by environmentalists opposed to Shell’s Arctic drilling campaign could be a major stumbling block for the company, which has spent $7 billion and seven years pursuing oil in the region.

The provision is embedded in the government’s rules for obtaining a “letter of authorization” allowing companies to disturb walruses, seals and other animals in the region — among the last permits Shell needs to launch activities in the Chukchi Sea next month. Under a 2013 Fish and Wildlife Service regulation, those authorizations are precluded for drilling activities happening within 15 miles of each other. read more

Coast Guard clears Shell drillship bound for Arctic

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Coast Guard clears Shell drillship bound for Arctic

Posted on June 22, 2015 | By Jennifer A. Dlouhy

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The drillship Noble Discoverer undergoes sea trials off Singapore in November 2014.

WASHINGTON — As one of Shell’s Arctic drilling rigs makes its way to Alaska, a second is waiting in the wings.

The Noble Discoverer, now docked in Washington state waters, has received a critical “certificate of compliance” from the U.S. Coast Guard verifying it meets a host of safety and security requirements. Since a May 20 Coast Guard inspection, Shell and Noble cleared more than a dozen violations documented at the vessel. read more

Feds say Shell completed test for blow-out well response ahead of Arctic drilling

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Screen Shot 2015-06-11 at 19.31.15Feds say Shell completed test for blow-out well response ahead of Arctic drilling

Posted on June 18, 2015 | By Jennifer A. Dlouhy

WASHINGTON — Shell employees and contractors successfully deployed and tested emergency equipment meant to respond to a blown-out well in the Arctic Ocean, federal regulators said Thursday.

The exercises, conducted Tuesday and Wednesday in waters near Washington state, focused on Shell’s capping stack, designed to sit atop a damaged well and choke off flowing oil and gas.

Officials with the Interior Department’s Bureau of Safety and Environmental Enforcement oversaw the deployment of the equipment Tuesday in waters slightly deeper than Shell’s proposed drilling sites in the Chukchi Sea northwest of Alaska. Specifically, they watched as workers maneuvered the capping stack up and off the rear deck of the MV Fennica and 150 feet below the surface of the water. read more

As Shell moves toward Arctic, industry decries regulations

Screen Shot 2015-06-17 at 11.28.52Article by Jennifer A. Dlouhy published June 16, 2015 by The Houston Chronicle

As Shell moves toward Arctic, industry decries regulations

Industry leaders and allies in Congress say red tape will discourage Arctic exploration

WASHINGTON – Even as Shell Oil Co. gets closer to drilling new exploratory wells in Alaska’s Chukchi Sea, industry leaders and their congressional allies are insisting that the Obama administration’s planned Arctic drilling standards are so onerous and costly they will discourage others from following suit.

“Is the proposed rule intended to make exploration so expensive that it is not financially feasible to explore in our Arctic?” asked former Alaska state Sen. Drue Pearce, who headed the state Senate’s oil and gas committee. “If we want to have development in the Arctic as the president has called for, then we need to have standards that are economically feasible to allow them to go forward.” read more

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