Responding to a series of high-profile incidents involving its assets for Arctic Ocean offshore drilling, Royal Dutch Shell PLC announced a “pause” in its 2013 drilling program in the Beaufort and Chukchi seas Wednesday.
The decision comes the day after the conical drilling unit Kulluk, which suffered hull damage in a New Year’s Eve grounding off Sitkalidak Island near Kodiak, was taken under tow by three tugs for a 10-day trip to Dutch Harbor. After being transferred to a drydock, the Kulluk will then head to Asia for repairs.
Shell’s other drilling asset for its 2012 work, the Noble Discoverer, nearly grounded July 14 in Dutch Harbor while it was headed north. It was found to have several safety and pollution violations during a November Coast Guard inspection in Seward, and will also be towed to Asia for repairs to its propulsion system.
In its Wednesday statement, Shell Oil president Marvin Odum said the delay would help ensure that the company was prepared for future drilling operations following the conclusion of its 2012 season.
“We’ve made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way,” Odum said. “Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”
Odum noted that the actual operations to drill two top holes -- preparatory excavations short of striking oil, as ordered by Interior Secretary Ken Salazar in August -- were completed without incident or environmental impact.
“Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators, and meets the high standards the company applies to its operations around the world,” Odum said. “We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area.”
Shell’s decision received quick support from members of Alaska’s congressional delegation, with Sen. Lisa Murkowski saying it indicated the company’s commitment to conducting safe offshore drilling in Arctic waters.
“This pause -- and it is only a pause in a multi-year drilling program that will ultimately provide great benefits both to the state of Alaska and the nation as a whole -- is necessary for Shell to repair its ships and make the necessary updates to its exploration plans that will ensure a safe return to exploration soon,” Murkowski said.
Sen. Mark Begich expressed regret about Shell's decision, but emphasized that the delay would leave the company better prepared to resume drilling in 2014.
"I am very disappointed that Shell will not resume drilling operations in the Chukchi and Beaufort seas this summer," Begich said. "However, I’ve always believed Alaska can develop OCS resources safely and responsibly and I remain committed to a robust offshore oil and gas program in the Arctic. Off-shore drilling is critical for Alaska jobs and for the nation’s energy security."
Rep. Don Young largely echoed those sentiments Wednesday afternoon.
"As a lifelong advocate for responsible resource development in the Arctic, today’s decision by Shell to temporarily pause their exploration is disappointing, but showcases Shell’s commitment to safety," Young said.
Gov. Sean Parnell emphasized that Shell's work still has his backing Wednesday afternoon.
"Taking the long view, we are at the early stage of a new era of oil exploration in the Arctic, one that will continue for decades in a measured and responsible way," Parnell said. "Shell continues to have our full support for this project that is critical to America’s domestic energy security."
This is a developing story. Please check KTUU.com and the Channel 2 newscasts for updates.