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Shell’s still waiting

Company needs Chukchi ice to clear & barge certification before drilling start

By Alan Bailey: Published Week of July 22, 2012

Shell’s two drilling vessels, the Noble Discoverer and the Kulluk, are still moored at Dutch Harbor in the Aleutian Islands, waiting for ice to clear in the northern Chukchi Sea before embarking on the company’s much anticipated Arctic drilling venture. However, the company also needs U.S. Coast Guard certification of its containment barge Arctic Challenger, still docked in Seattle, and the transfer north of that vessel, before drilling can begin.

In addition, at the time Petroleum News went to press the Environmental Protection Agency had yet to issue decisions on requests by Shell for changes to the air quality permits for its drilling vessels, following a discovery that some engines on the vessels could not fully meet the emissions limits set in the approved permits. And, in what has turned out to be a less than smooth start to its planned drilling season, Shell has been fending off criticism over the snafu in which the Noble Discoverer dragged its anchor at Dutch Harbor, coming perilously close to the shore.

Sea ice
Shell has told Petroleum News that the unusually heavy Chukchi Sea ice, which is delaying the start of the company’s drilling into August, is the most significant factor in causing the drilling fleet to remain in a holding pattern. The company had originally hoped to move its fleet north through the Bering Strait in early July.

The Coast Guard has cautioned that it will take at least until July 20 to “see some movement” on the barge certification issue. And assuming that the barge is eventually certified for its intended use, the vessel will still need to travel north to join the rest of Shell’s fleet.

The need for certification of the barge arises from the fact that Shell commissioned modifications to the vessel to accommodate the new Arctic containment system that the company plans to deploy, ready to move into action to contain oil spilling from an out-of-control well in the unlikely event of a well blowout. The Coast Guard needs to certify that the barge is seaworthy for its intended purpose — certification, among other things, involves inspecting the vessel and conducting a test to ensure that new equipment installed on the barge has not adversely impacted the vessel’s stability.

Certification standard
Apparently, the Coast Guard inspection brought to light some mechanical deficiencies, including some deficient welds, with those deficiencies needing to be corrected before certification. However, the biggest problem with the certification appears to be a request to change the standard under which the vessel is to be certified. At the end of last year the Coast Guard had provisionally agree to certify the vessel under the standard for a floating production installation. But in early July Shell informed the Coast Guard that the vessel could not meet the requirements of that standard and asked, instead, for certification under the standard for a mobile offshore drilling unit. The Coast Guard needs to determine whether the requested standard is appropriate to the vessel’s intended use and, if so, whether the vessel physically meets the standard.

The issue of drilling permits to Shell by the Bureau of Safety and Environmental Enforcement is contingent on the containment barge being in operation.

Air permits
It is also not yet clear what impact, if any, the requested changes to the air permits will have on Shell’s plans. The Kulluk is operating under a minor air permit that allows Shell to continue operating the vessel while EPA reviews the requested change, with EPA having 90 days in which to make a decision over the change request.

Noble Discoverer, on the other hand, is operating under a major permit — EPA has said that changes to that permit require public review before approval and implementation. Shell has said that the requested changes are minor in nature, involving a small increase to the permitted ammonia and nitrous oxide emissions from the vessel’s generator engines, with total emissions from the vessel remaining below permitted levels. The company has said that it is working with EPA to obtain a compliance order that would enable the vessel to operate this summer, while triggering a review process for the modified permit for subsequent years.

Noble Discoverer
The incident on July 14 in which the Noble Discoverer dragged its anchor, coming close to the shore near Dutch Harbor, has become the subject of much debate in the media, with people questioning whether the vessel had in fact run aground, and also questioning how long the incident had lasted.

Apparently a tug, stationed by Shell in support of the Noble Discoverer, had moved into action, towing the drilling vessel back into deep water after the vessel had drifted towards the shore. Although, according to a report in the Anchorage Daily News, one eyewitness claimed that the drifting of the drilling vessel had taken place over a period as long as two hours, Shell vehemently denies that claim.

A second vessel, the Harvey Gulf, was alongside the Noble Discoverer at the start of the incident and it took 28 minutes from the time when the Discoverer was reported to have slipped anchor to the time when brought the Discoverer under tow, Shell spokesman Curtis Smith told Petroleum News in a July 17 email.

Hull inspections
Photos and eyewitness accounts of the Discoverer apparently very close to shore have given rise to the speculation about the possible grounding of the vessel. According to media reports Shell says that it used a remotely operated vehicle to inspect the vessel’s hull after the incident and found no evidence of a grounding. Since then divers have also confirmed those initial findings, Smith told Petroleum News.

“Divers have confirmed the Noble Discoverer did not run aground after slipping anchor in Dutch Harbor, Alaska,” Smith wrote in his email. “We appreciate the effort the Coast Guard has made to investigate this incident and will apply any learnings from that investigation to future operations. Our goal remains flawless operations and this is an incident Shell and Noble Drilling take very seriously. While we are pleased with the speed and effectiveness of the mitigation measures we had in place, even a ‘near miss’ is unacceptable.”

U.S. Coast Guard Petty Officer 1st Class David Mosley told Petroleum News in a July 18 email that the Coast Guard had been on hand during Shell’s diver inspection of the Noble Discoverer and that the Coast Guard concurs with the conclusion that there were no signs of damage to the vessel.

“While this is not conclusive evidence that the vessel did not come ashore, it does suggest that if it did it went soft aground resulting in no damage,” Mosley wrote.

The Coast Guard investigation of the incident is continuing and may take weeks, or even months, to complete, he wrote.


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