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August 30, 2012 --- Vol. 18, No. 65August 2012

Interior gives go-ahead for Shell’s preparatory drilling in Arctic

The Bureau of Safety and Environmental Enforcement has issued a permit allowing Shell to do some preparatory drilling above oil bearing zones in the Chukchi Sea without the company’s oil containment barge being deployed, the agency announced today. The permit will allow Shell to drill the so-called mudline cellars that house the seafloor wellheads and to set the first two strings of casing into shallow non-oil-bearing zones.

“It is our highest priority that any activities that occur offshore Alaska be held to the highest safety, environmental protection, and emergency response standards,” said James Watson, director of BSEE when announcing the permitting decision. “Shell’s applications for permits to drill into potential oil reservoirs remain under review, and Shell will not be authorized to drill into areas that may contain oil unless and until the required spill containment system is fully certified, inspected, and located in the Arctic. Today’s announcement authorizes Shell to move forward with limited activities well short of oil-bearing zones that can be done safely now prior to the certification and arrival of the containment system.”

“The administration’s decision to approve initial drilling into non-oil-bearing zones in the Chukchi Sea reflects the national importance of understanding the energy resource offshore Alaska,” said Shell spokesman Curtis Smith in an email responding to the BSEE announcement. “Shell is now only days away from responsibly beginning this critical exploration project and, once again, making energy history offshore Alaska.”

“Today’s announcement is extremely exciting. We’ve been waiting for this for about six years and our goal of … being able to drill in the Chukchi is about to take place,” said Shell’s Alaska Vice President Pete Slaiby during a hastily convened Shell press conference shortly after the BSEE announcement.

The new permit will allow Shell to a depth of 1,300 to 1,400 feet, 4,000 feet or so above the highest zones with hydrocarbons Slaiby said.

—Alan Bailey

See story in Sept. 2 issue of Petroleum News, available online Friday, Aug. 31 at www.PetroleumNews.com

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