Shell talks up Arctic exploration

Kay Cashman

Petroleum News

A June 28 news story out of Stavanger, Norway, about Shell’s Arctic exploration plans confirms the company hopes to drill offshore northern Alaska next year. The story, written by Ian Talley of Dow Jones Newswires, also confirmed Shell’s interest in bidding in both the next Alaska Chukchi Sea lease sale and Russia’s licensing rounds for its part of the Chukchi.

The article also provided previously unreported information, such as the new name for the Alaska Hammerhead prospect — Siv Ullig. That means Shell has dropped its interim name for the 1985 discovery, which was Kaktovik.

Shell, Talley wrote, “plans to increase its exploration and development drive in the Arctic regions, particularly in the Alaskan Beaufort Sea in the next year.” The information, he said, came from Robert Blaauw, Shell Russia and Arctic business development manager, whom he interviewed on the sidelines of an IBC conference.

Shell, he wrote, is eyeing the Arctic’s untapped reserves, estimated to be 25 percent of the world’s remaining undiscovered oil and gas resources.

“Although the company failed to be shortlisted for a stake in OAO Gazprom’s (GSPBEX.RS) giant 3.7 trillion cubic meter Shtokman project in the Barents Sea, it’s aiming to leverage its experience at Sakhalin II, its 55 percent liquefied-natural-gas venture in the Russian Far East,” Talley wrote.

Blaauw told Talley that Shell is concentrating on new exploration areas in Alaska’s Beaufort and possible new licensing rounds in Alaska and Russia’s Chukchi Sea. (In Alaska, a Chukchi Sea lease sale is tentatively scheduled for 2007. Petroleum News was unable to obtain information about upcoming licensing rounds in Russia’s Chukchi before going to press.)

“There’s exciting new exploration acreage in (the) Beaufort and we’ll start (the) seismic (survey) there in a few weeks,” Blaauw said. (See related story on page 4 of this issue.)

Shell, Talley reported, has 103 tracts in the Beaufort Sea “north of Alaska and Canada.”

Blaauw told him Shell plans to start drilling in the Beaufort next year, using the Kulluk, a specially designed Arctic drillship.

Blaauw “said although the drilling program would be finalized after the new seismic survey, it will likely include a reappraisal of the Siv Ullig oil field.”