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No delays from Prelude rig issues: Shell

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Peter Klinger, The West Australian April 4, 2013, 6:21 am

Royal Dutch Shell says the development schedule for the industry-leading Prelude floating LNG venture in the Browse Basin has not been affected by technical problems that have beset its drilling rig.

The Shell-chartered Noble Clyde Boudreaux had been out of action for more than a month off the coast of Exmouth, where it was scheduled to drill the Palta-1 exploration well. The Palta permit, owned by Shell and Mitsubishi, is 70km from the Ningaloo Reef. The drilling of the Palta-1 well has sparked widespread condemnation from environmental groups.

Palta was spudded in mid-October and was supposed to take up to three months to complete.

But bad weather and now a malfunction of the rig’s blowout protector have delayed the program.

The rig’s operator, Noble, says it estimates the technical problems to cause the Clyde Boudreaux to be out of action for about 46 days. It described the downtime “at zero pay rate”, suggesting that Shell may not have to keep paying while the rig is out of action. Shell charted the rig for 27 months on a full-contract rate of $US417,000 per day, according to Noble.

After completing Palta, the rig is supposed to move north to the Browse Basin to drill production wells for Shell’s Prelude project. Shell hopes to be producing first LNG from Prelude by 2016.

A Shell spokeswoman last night would not discuss cost issues associated with the rig’s Palta downtime. But she added: “This delay is not expected to have an impact on the Prelude project schedule.”

Several WA oil and gas hopefuls with exposure to acreage around Shell’s Palta permit have been keeping a close eye on the drilling, in the hope that any exploration success will rub off on them.

The listed WHL Energy, Strike Energy and Cott Oil and Gas hold an adjoining permit which they say covers about 18 per cent of the overall Palta gas prospect. The juniors have speculated the entire Palta prospect could contain 13.5 trillion cubic feet, which would rank as one of WA’s biggest gas fields.

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