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Shell abandons offshore Alaska drilling plans for 2011


London (Platts)–3Feb2011/759 am EST/1259 GMT

Shell has abandoned plans for exploration drilling offshore Alaska in 2011 after continued delays with securing the necessary permits, the company’s CEO Peter Voser said Thursday.

Speaking on a conference call after Shell reported its fourth-quarter results, Voser said he hoped to be able to drill offshore Alaska in 2012, and called for the US authorities to speed up the permitting process.

“There will be no drilling offshore Alaska in 2011,” Voser said. “We need urgent and timely action on permitting to go ahead with the 2012 drilling program.”

Shell has run into problems with permits for drilling in the Beaufort and Chukchi Sea offshore Alaska, where its plans have been opposed by environmentalists.

The company has been working on plans to explore the area for several years and had been hoping to drill one or two wells in the area in 2010, but was forced to postpone the drilling as it did not receive a final permit.

Voser said that the company had had some “good discussions with the authorities” but that it would have cost $100 million to $150 million to advance plans for drilling this year, which would have been wasted if the permits were not granted.

“We will not spend that given the uncertainties,” he said. “I’m not prepared to take the uncertainty and pay the money and then not get to the drilling.”

The permitting process for offshore drilling in the US has slowed considerably since the post-Macondo moratorium in the Gulf of Mexico was lifted in October last year.

Late last month, an Alaska judge dismissed a lawsuit brought by the state challenging what it described as the Department of the Interior’s “de facto” ban on drilling on Alaska’s Outer Continental Shelf.

–Richard Swann,


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