Royal Dutch Shell Plc  .com Rotating Header Image

US scuppers Shell’s hopes of drilling Alaskan Arctic

By Rob Davies; PUBLISHED: 09:03, 10 January 2013

Shell’s dream of drilling for oil in the Alaskan Arctic has suffered another blow, after US authorities announced a ‘high-level’ review likely to delay its plans still further.

US Secretary of the Interior Ken Salazar said his department would launch a 60-day probe ‘to review practices and identify challenges as well as lessons learned’.

It follows a series of accidents and setbacks that have hit Shell’s Alaskan programme, the latest of which saw its drilling rig, the Kulluk, rescued after running aground on New Year’s Eve.

Salazar said the probe had been ‘expedited’, suggesting the Kulluk incident has sharpened his department’s focus on Shell’s Arctic activities.

The US Coastguard launched a parallel probe into how the Kulluk ran aground.

The development will raise fears that Shell’s plans, which have cost it £3billion so far, will be hampered by a government still cool on British oil firms after BP’s spill at its Macondo well.

Salazar was instrumental in holding BP’s feet to the fire after the catastrophe, saying he lacked confidence in the company, which had left him ‘angry’ and ‘frustrated’.

‘In the context of Macondo, no-one in government is going to err on the side of giving oil companies a break,’ said Stuart Joyner, oil analyst with City firm Investec.

He said Shell (up 9p to 2141p) was likely to suffer delays to its Arctic plans as a result of its problems in Alaska and would have to address the setbacks at its fourth-quarter results this month.

He said investors hoping for Arctic operations to move more quickly could become ‘tetchy’, amid fears that Britain’s two oil giants are losing their touch.

But he added the firm was unlikely to be fazed by delays to a project that is already expected to take between five and ten years to come to fruition.

Shell would also welcome stiff regulation if it meant avoiding a major disaster like BP’s oil spill, he added.

The Anglo-Dutch firm welcomed the review, saying that it would ‘help strengthen our Alaska exploration programme going forward’. But Shell acknowledged that it had ‘experienced challenges’ with its venture.

It suffered delays in securing approval to use a spill-response barge, the Arctic Challenger, that would collect oil in the event of an accident.

And a containment dome that would also be used in responding to a spill was ‘crushed like a beer can’ during testing. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “US scuppers Shell’s hopes of drilling Alaskan Arctic”

Leave a Comment

%d bloggers like this: