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Vol. 17, No. 43 Week of October 21, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

Making the most of it

Shell drilling top holes on OCS while Coast Guard certifies Arctic Challenger

Alan Bailey

Petroleum News

While disappointed at not drilling into hydrocarbon bearing zones in Alaska’s Chukchi and Beaufort seas this year, Shell sees as a success its massive operation of deploying its drilling vessels and their support fleet to the Arctic, together with the subsequent start of drilling operations, Pete Slaiby, Shell’s vice president in Alaska, told a field hearing in Anchorage of the U.S. Senate Committee on Commerce, Science and Transportation on Oct. 11.

“For the first time in more than 20 years Shell’s turned a drill bit in the Chukchi and Beaufort seas,” Slaiby told committee member Sen. Mark Begich. “We’ve had a very, very successful year and I’m pleased with the operational aspects of that.”

“I don’t think people should lose sight of the fact that we’re moving 900 people every two to three weeks in and out of northern Alaska,” Slaiby told Petroleum News on Sept. 28, when reflecting on his company’s experiences this year.

Top holes

Delays in the completion of retrofit work on Shell’s oil containment barge, the Arctic Challenger, and damage to the company’s new containment dome during testing of the containment system, ultimately caused Shell to abandon plans to complete some Arctic outer continental shelf wells this year. Instead the company is drilling a series of top holes, the top 1,400 to 1,500 feet of its wells, in preparation for completing the wells in 2013.

The drill ship Noble Discoverer started drilling the Chukchi Sea Burger A well on Sept. 9, while in the Beaufort Sea Shell’s floating drilling platform the Kulluk started drilling at the Sivulliq prospect on Oct. 3 after the end of the local subsistence whale hunt.

Arctic Challenger

During the Senate committee field hearing Slaiby announced that the U.S. Coast Guard had finally issued a certificate of inspection for the Arctic Challenger, with the American Bureau of Shipping subsequently giving the barge its class certification. Slaiby characterized the containment system, with its ability to collect and separate oil, gas and water flowing from a well or pipeline, as a “game changer” for offshore oil operations.

Slaiby said that the damage to the containment dome during testing resulted from an electrical fault that had caused a valve to open, precipitating the rapid descent of the dome. Safety systems had prevented the dome from hitting the seabed, but some buoyancy chambers had been damaged, he said. Shell has put in place a program for the necessary repairs to the system: The containment barge with its containment system will be ready for deployment in the 2013 open water season, Slaiby said.

A big deal

Characterizing top hole drilling as “a big deal,” Slaiby told Petroleum News that each top hole will take around 14 days to drill, leaving just 10 days or so of subsequent drilling to reach target zones.

Given the vagaries of weather and sea-ice encroachment in the Arctic, Shell does not know exactly how many top holes it will end up drilling this year, but the company does have a planned sequence of wells.

“We’ve got our batting order. … We’re getting everybody to the on-deck circle,” Slaiby said.

In the Chukchi Sea, the Noble Discover will move to the Burger J well followed by the Burger B well, after completing the top hole at Burger A; the drilling sequence in the Beaufort starts with a top hole above the Sivulliq prospect, followed by a top hole at the Torpedo prospect.

Slaiby said that Shell’s cumulative costs for its Alaska venture would go past $4.5 billion this year.

Community communications

In terms of communications with North Slope communities, Slaiby said that subsistence advisors stationed in the various North Slope villages had proved particularly successful this year. These advisors have notified Shell of subsistence activities, to avoid conflicts between these activities and industrial operations. And Shell has investigated any reported disturbance to local people, to prevent a recurrence of a similar incident, Slaiby said.

In addition to continuing offshore environmental monitoring, done in conjunction with other offshore leaseholders, this summer Shell worked with Olgoonik Corp., the Native corporation for the village of Wainwright, on an environmental study in the National Petroleum Reserve-Alaska. This study, involving biological surveys, hydrology and the identification of archaeological sites, will provide information needed to plan an eventual oil pipeline from the Chukchi Sea to the central North Slope, Slaiby said.

And, in the offshore, lessons learned from this year include a need to upgrade Shell’s helicopters for flying in instrument conditions. Also, given the experience of having to medevac some people from offshore because of pre-existing medical conditions, fitness to work in remote locations has emerged as an issue, Slaiby said.

“It’s been an interesting year,” Slaiby said. “It’s been a lot of hard work on Shell’s part and on the part of our contractors and the regulators.”

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