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February 27, 2013 --- Vol. 19, No. 17February 2013

Shell says no Alaska Arctic drilling in 2013

Shell said today that it is pausing its planned drilling in 2013 in Alaska’s Beaufort and Chukchi Seas while the company prepares its equipment and plans for a resumption of its drilling program “at a later stage.”

“We’ve made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way,” said Shell Oil Company President Marvin Odum. “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.”

The company said Alaska remains an area with high, long-term potential for Shell and that it is committed to resume drilling in the state’s Arctic offshore in the future.

“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.”

Since completing the top-hole drilling of two wells, one in the Chukchi Sea and one in the Beaufort Sea, during the 2012 Arctic open water drilling season, Shell has run into major problems with both drilling vessels that it was using in the Arctic. On Dec. 31 the company’s floating drilling platform, the Kulluk, ran aground during a severe storm while being towed to the U.S. West Coast for winter maintenance. The vessel has since been refloated.

Yesterday three tugs started towing the Kulluk to Dutch Harbor, in readiness for shipment to Asia for repair.

The drillship Noble Discoverer, under contract by Shell for drilling in the Chukchi Sea, has been docked in the port of Seward for several weeks with engine problems and is the subject of a U.S. Department of Justice investigation of alleged safety and environmental violations during the 2012 drilling season. The Noble Discoverer is also slated for shipment to Asia for repair.

—Alan Bailey

See story in March 3 issue, available online mid-day Friday, March 1, at www.PetroleumNews.com

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