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Shell Says U.S. Drilling Rig to Stay Shut for Weeks After Leak

By Eduard Gismatullin – Dec 20, 2011 3:23 PM GMT

Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, said a rig will stay shut for weeks after spilling 319 barrels of drilling fluid into the Gulf of Mexico.

The company suspended work at the Appomattox discovery, which leaked synthetic and biodegradable drilling mud from a booster line, Shell said. The leak was isolated, stopped and remedial action has been approved by the regulator, it said. The company temporarily abandoned the well.

Drilling will resume when Shell and relevant government agencies “are confident that the necessary repairs have been made and the operations can continue safely, which is likely to be in a matter of weeks,” Jonathan French, a London-based spokesman at the company, said in an emailed statement.

The Anglo-Dutch company was drilling the development well following approval from the U.S. government of its two exploration plans in May, the first since BP Plc’s spill in the Gulf of Mexico in 2010. Shell holds 80 percent of the Appomattox prospect with Nexen Inc. (NXY) of Canada holding the rest.

Shell and Nexen announced the discovery in the deepwater eastern part of the Gulf in March 2010. The partners have partly appraised the field and estimate that it holds more than 250 million barrels of resources, according to Nexen estimates.

To contact the reporter on this story: Eduard Gismatullin in London at [email protected]

To contact the editor responsible for this story: Will Kennedy at [email protected]

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