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Petroleum News: Shell on fast forward: Purchases Arctic drilling platform…

Purchases Arctic drilling platform, doing geotechnical boring at Hammerhead
By Kay Cashman
Rick Fox, Shell’s new asset manager for Alaska, wasn’t kidding when he told Pac Com attendees in late February that Shell was “ambitious about Alaska.”
The mega-major returned to Alaska in March 2005 and shortly thereafter began moving at the pace of an independent, its primary focus on Alaska’s offshore.
In addition to aggressive lease acquisitions in the Beaufort Sea and Bristol Bay onshore, Shell has already purchased one, possibly two, Arctic drilling vessels for use in Alaska. It also plans to do geotechnical boring in state waters between its offshore federal Hammerhead leases and the shoreline within the Point Thomson unit. And this summer the company has a 3D seismic shoot planned in the Beaufort Sea, likely followed by a shoot in the Chukchi Sea, using WesternGeco’s MV Gilavar. (See article in the Feb. 19 edition of Petroleum News.)
Hammerhead renamed 'Kaktovik'
In its permit application to do geotechnical shallow boring, Shell referred to potential pipeline routes from its leases to shore, saying the work was being done “in support of proposed preliminary development planning at the Kaktovik Prospect — formerly known as the Hammerhead Prospect — offshore the Point Thomson Unit Well 3.”
Kaktovik is the name of the Inupiat village about 60 miles southeast of Hammerhead that sits in the coastal plain of the Arctic National Wildlife Refuge. The ExxonMobil-operated offshore/onshore Point Thomson unit is adjacent to ANWR’s coastal plain; the edge of the Hammerhead leases is 10 miles north of the Point Thomson unit boundary.
U.S. Minerals Management Service data estimates 100 million to 200 million barrels of oil at Hammerhead, although the agency also says the reservoir has not been fully delineated.
Shell said the purpose of the shallow boring, which will be done by contractor Duane Miller & Associates, is to identify soil types and characteristics “for engineering and design studies.”
The drill ship purchase and project overview portion of Shell’s geotechnical boring application has borough officials thinking Shell is doing some serious development planning for the Kaktovik prospect.
For example, in the application Shell said, “The soil and permafrost conditions along the proposed pipeline route to the mainland need to be explored. In waters shallower than 6 feet, ice bonded permafrost could be present. Ice bonded permafrost has been found in deeper waters when the soils are stiff clay such as the Flaxman formation. Ice-bonded permafrost will be encountered at the shoreline transition, and the thaw-settlement of the permafrost needs to be determined so that the transition from the buried mode to above grade piping can be designed.”
The application also said, “To provide the data to meet objectives, two shoreline and pipeline routes may be drilled and sampled. … Before any offshore drilling is started, Lewellen Arctic Research will perform a reconnaissance of the sea ice conditions. Ice conditions will control where DM&A can safely travel and drill. DM&A anticipates that the drilling will start with the onshore and near shore work, and while that work is proceeding safe routes can be established for the holes in deeper water.”
Approximately 60 borings will be taken along the offshore pipelines routes, Shell’s application said.
DM&A plans to bore 100-feet-plus below the mud line, noting that this same drill set-up achieved soil sampling to depths of 190 feet below 20 feet of water at a crossing of the Colville River. The hollow stem augers make an 8-inch diameter hole.
A four-person, two-shift crew will work 24 hours per day, stay in an abandoned Point Thomson drill site (No. 3), and be supervised by senior geologist Tom Culkin.
The drilling equipment will be mounted on an enclosed sled and hauled to the staging area by Catco rolligons.
The geotechnical boring permit calls for all work to be completed by May 15.
Just back from Barrow
Fox and two other newly hired Shell Alaska officials, Cam Toohey and George Ahmaogak, former mayor of the North Slope Borough, just returned from a late February visit to the North Slope Borough where they met with the mayor, planning department officials and others — and picked up the geotechnical boring permit, which had been applied for Feb. 15.
Borough officials said Ahmaogak, Toohey and Fox talked about Shell’s recent purchase of the Kullu Arctic Floating Platform, a circular drilling barge that Daily Oil Bulletin says is designed to stay on location with up to 1.3 meters of ice moving against its hull.
The company plans to use the Kullu, which it bought from Seatankers Management Co., in federal waters outside the borough’s jurisdiction but will need a “safe harbor” for it if and when they drill “far to the west of Prudhoe Bay,” a borough official said.
Kullu drilled Hammerhead in 1980s
Formerly called the Kulluk, the Kullu was used by Union Oil to drill its Beaufort Sea Hammerhead wells in 1985 and 1986 and by ARCO Alaska in 1993 to drill the Wild Weasel well, also in the Beaufort. The Kullu has been moored at Inuvik in the Northwest Territories. It will be refurbished after it has been hauled to Alaska early this summer.
According to Seatankers’ specs on the Kullu it has six 15-t Bruce and six 12-t Stevpris anchors; and “underwater fairleads for ice,” which in simpler language is a 12 point mooring system that comes out under the ice so the anchors don’t get fouled by the ice.
Designed for the Alaska and Canada Arctic, the Kullu was built by Japan’s Mitsui Engineering & Shipbuilding to work in water depths of 60-600 feet with a drilling depth of 20,000 feet.
It contains quarters for 108 persons, a four-bed hospital, recreational areas and a heliport.
The hull is 266 feet in diameter by 98 feet high. At present the drilling equipment consists of the following:
• Drawworks — Ideco E3000
• Pumps — Two Ideco T-1600 triplex
• Prime movers — Three Midwest/GM EMD 16E9B
• Rotary Table — Ideco LR 495
• Top Drive — Varco TDS-3
• Derrick —160 feet tall with a 1.4 million pound cap
• BOP system — NL Shaffer; one 10,000-psi, 18 3/4 inches; one 15,000-psi, 18 3/4 inches
The Kullu has three cranes and is equipped with diving equipment, including a bell and decompression chamber rated to 1,000 feet.
Second drilling vessel unconfirmed
Petroleum News sources say Shell has also leased or purchased another Arctic drilling vessel, but that information was not confirmed by Shell or by borough officials.
However, the company will need two vessels to drill their offshore prospects in Alaska to meet government oil spill contingency requirements because most of Shell’s leases are in deeper water outside the barrier islands, so an ice island or gravel island would not work. Instead two drilling vessels can support one another in case of an oil spill.
In a Feb. 28 interview with Petroleum News, Shell’s Alaska Exploration Manager Chandler Wilhelm said the company is in the process of making plans for its upcoming drilling campaign, but is not ready to talk about it because Shell officials are still in the process of meeting with key stakeholders.
“We have some plans to execute a drilling plan on our leasehold but doing so … involves more discussions with some important stakeholders,” Wilhelm said.
Shell, borough officials said, has been diligent about keeping local residents informed of their plans.
Editor’s note: Part two of this story will appear in the March 12 edition of Petroleum News.

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