Ice and regulations have hit Shell's latest plans to begin Alasakan oil exploration, but legislators may help five other oilcos.
Arctic sea ice Image: Nasa |
Shell's issues both relate to seaworthiness - one is ice and the other equipment. With the company having already dispatched some of its 22-vessel fleet towards fields in the Chukchi and Beaufort Seas off the Arctic coast of Alaska, rapidly forming sea ice is making the task of putting the whole fleet in place a race against time.
The exploration project is highly controversial due to the environmental sensitivity of the region. This, in turn, has put the spotlight on every aspect of the operation, not least the oil spill response equipment. When issues were found with the key response vessel, the US Coastguard and other officials delayed its departure until they were fully resolved.
This could mean several weeks' further delay, moving the operation closer to the end of the ice-free window around September that would allow the drilling fleet to take up position. Shell's oil spill plans are not just under review by the Coastguard, they are now also under judicial scruitiny after a lawsuit was filed by environmentalists as the spill vessel, Arctic Challenger, was being repaired. The response plan had been given local government go-ahead in March this year.
Meanwhile, five other companies looking to explore the Beaufort Sea over the next few years may be given extensions to their drilling licences as a result of delays caused by a review of the whole of the Arctic drilling programme. The companies, which include ConocoPhillips and Imperial Oil, are requesting licence extensions because they co-operated with the Canadian Government's review.
The re-assessment was called following the Deepwater Horizon spill and took two years, thus losing licencees time to develop and implement drilling plans before their licences expire around 2016. It is likely the Federal Government will grant extensions until as late as 2021.