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Shell exec leaves by ‘mutual consent’ after Arctic mishaps

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Posted on March 26, 2013 at 2:28 pm by Jennifer A. Dlouhy: Covers energy policy and other issues for The Houston Chronicle and other Hearst Newspapers from Washington, D.C.

A Shell executive in charge of oil exploration across the Americas has stepped down from his post after 29 years with the company.

Shell said the move by David Lawrence, the executive vice president of exploration and commercial for upstream Americas “was made by mutual consent” and that he was not fired. But skeptics have fostered a different view: that Lawrence was fired and made the scapegoat for Shell’s problem-plagued 2012 Arctic drilling season.

Last month, Shell announced it was calling off plans to resume hunting for oil in U.S. Arctic waters after the high-profile mishaps, including the Dec. 31 grounding of one of its rigs on an Alaskan island. And on March 14, the Interior Department issued a report that blamed the company for not sufficiently overseeing and managing a web of contractors as it hunted for black gold under the Chukchi and Beaufort seas last year.

“A recurring theme from Shell’s 2012 experience is that there were significant problems with contractors on which Shell relied for critical aspects of its program,” the high-level Interior Department review concluded. “Shell’s focus appeared to be on compliance with prescriptive safety and environmental regulations required for approvals and authorizations, rather than on a holistic approach to managing and monitoring risks identified during operational planning.”

Lawrence could not be reached for comment. Shell spokesmen declined to say more about why Lawrence was leaving the company.

Lawrence has overseen all of Shell’s exploratory and commercial portfolio in the Americas since 2006 — a position that put him in charge of the U.S. Arctic venture as well as other onshore and offshore initiatives, including exploration in Canada and offshore Brazil as well as domestic natural gas operations.

Other executives also play a close role in managing Shell’s Arctic program, including Peter Slaiby, vice president of Shell Alaska, and Don Jacobsen, Shell’s vice president of Arctic and industry regulatory affairs.

Lawrence’s move comes as Shell prepares to restructure its broad exploration and commercial portfolio in the Americas, possibly creating separate organizations focused on exploration (including the Arctic), new business development and integrated gas. Shell hopes to resume exploratory drilling in the Arctic next year.

The rigs it used to drill two Arctic wells in 2013 are heading to Asian shipyards for repairs. Most of Shell’s mishaps happened while its rigs were traveling to and from U.S. Arctic waters, including the drillship Noble Discoverer’s out-of-control drift near Dutch Harbor, Alaska, last July and the grounding of its Kulluk rig as it traveled to a Seattle shipyard for maintenance.

Shell and oil industry leaders have described the mishaps as maritime incidents, distinct from the drilling itself. But the episodes illustrated that even routine maritime operations surrounding Arctic drilling can be risky, particularly given the scarce infrastructure and resources along Alaska’s northern coast.

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