Shell CFO comments on Alaska commitment

During a media briefing following Shell’s announcement of its first quarter 2014 results, Simon Henry, the company’s chief financial officer, assured reporters that his company has no plans to withdraw from Alaska, despite some media reports to the contrary.

And, although the company does not plan to drill in the Alaska Arctic offshore in 2014, the company does plan to recommence its drilling operations, perhaps in 2015.

“We are looking currently at what it will take to be certain of drilling in 2015, and there are still some open question marks, both legal and regulatory systems, that we need to move through,” Henry said. Henry was presumably referring to the uncertain legal status of his company’s Chukchi Sea leases, following a 9th Circuit Court of Appeals decision to uphold an appeal against the environmental analysis for the 2008 lease sale in which Shell purchased those leases — the Bureau of Ocean Energy Management is currently reworking the analysis following a court order from the federal District Court in Alaska.

Both Shell and ConocoPhillips, another company planning to drill in the Chukchi, are also waiting to see new safety regulations for offshore drilling in the Arctic that the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement have been developing in the wake of the Deepwater Horizon disaster in the Gulf of Mexico.

“There are various milestones coming up in both of those processes,” Henry said. “We are operationally able to drill next year but are not yet committed to do so, pending legal and regulatory developments.”

—Alan Bailey