Shell All Go For Offshore Arctic Oil Final Push

Published at 10:26AM - 18/08/15

Shell has received the final permit from US authorities, allowing it to drill the final sections of its Arctic wells, into oil bearing rock.

Anglo Dutch Shell begun drilling its two wells offshore Alaska last week, but only had permits to drill the top sections- away from any oil. The restriction were imposed by US authorities due to the all important ‘Capping Stack’ not being on site.

The critical piece of safety equipment, is a device that can be lowered down to the seabed and over the top of a well should a blowout happen.  The ‘Capping Stack’ as its known, was stuck in Portland, Oregon, onboard the icebreaking vessel, the Fennica, due to Greenpeace protests. 

However, with the help of the US Coast Guard, the Fennica was able to rejoin the rest of the 30 vessel strong fleet off the Alaskan coast.

Shell currently has two exploration wells being drilled.  The latest permits, now allow shell to push on and drill to a depth of round 7874 feet (2,400 meters) that will, if seismic surveys correct, find oil.

Environmental Scrutiny

Shell has come under huge scrutiny from environmental campaign groups, not least Greenpeace.  The environmental group has campaigned hard against Shell, Shells’ contracting companies and the US authorities.

Shell has moved to constantly allay fears, keeping the global community abreast of all developments and giving insights into measures taken to protect the environment.

The US Government and agencies have consistently pushed theirs, upping the scrutiny of Shell far beyond any pervious offshore drilling campaign in US waters. The Bureau of Safety and Environmental Enforcement (BSEE), for example have a team on board Shell’s drilling rigs, ensuring round the clock surveillance of its offshore operations.

One of the requirements handed down to Shell is to ban drilling on both rigs simultaneously, as Government agencies felt the noise and vibrations could have an inverse effect on the local Walrus population.

 

Shell’s Big Arctic Gamble

The current two offshore exploration wells are located approximately 70 miles (113 km) off Alaska’s north west coast.  They will be the first offshore wells to be drilled in the Arctic since 1991.

To date, the investment by Shell in to this single offshore exploratory drilling campaign stands at an eye watering US$7 billion (GB£4.5 billion), with the licences on the Alaskan Chukchi Sea alone costing US$2.1 billion (GB£1.3 billion).

However, with many of the world’s top scientists believing that the Arctic could yield as much as 20% of the world’s remaining undiscovered oil and gas deposits, Shell’s big Arctic play could well payoff.