May 29, 2012 --- Vol. 18, No. 38May 2012

Shell moves toward Arctic OCS drilling

Shell is continuing to progress its plans for drilling in Alaska’s Chukchi and Beaufort Seas this year, bolstered by a May 25 decision by the U.S. Court of Appeals for the 9th Circuit to reject an appeal against the approval of the company’s Beaufort Sea exploration plan.

“It’s welcome news,” Shell spokesman Curtis Smith told Petroleum News today. “We were confident going into that particular (permitting) process, but any time the court validates the process that was used … it gives us tremendous confidence that we’re going to finally be drilling this year.”

Meantime the $100 million upgrade to the Kulluk, the floating drilling platform that Shell plans to use in the Beaufort, is almost complete, Smith said. The vessel now has new main generator engines; new catalytic converters for screening the engine exhaust; and a new system for recovering drilling mud and cuttings.

And Shell anticipates demonstrating its new well capping and containment system in Puget Sound within the next two to three weeks. The company has been conducting on-water oil spill response training in Valdez. To demonstrate its oil spill response capabilities to regulatory agencies and the U.S. Coast Guard, the company has held a spill response table-top exercise in Anchorage and plans to conduct an on-water exercise in Valdez.

However, unusually heavy ice in the Chukchi Sea may delay Shell’s planned July 1 start for its Chukchi Sea operations.

“We are not going to break in,” Smith said. “We’re going to wait for that ice to move off naturally.”

—Alan Bailey

Buccaneer secures rights to Glacier 1 rig

Buccaneer Energy Ltd. said today that through a subsidiary, Kenai Land Ventures LLC, it has completed arrangements for a three-year lease of the Glacier 1 drilling rig, with an option to purchase.

The Glacier 1 was owned by Glacier Drilling Co., a subsidiary of Marathon Oil Co. Marathon designed the rig in 1999 to drill its Cook Inlet prospects and used it beginning in 2000.

Buccaneer said it facilitated the purchase of the Glacier rig “by a third party that specializes in the energy sector.”

Kenai Land Ventures has a three-year “bare rig” agreement with the new owner and an option to purchase the rig after the first six months for $7,338,000.

Buccaneer used the Glacier rig to drill both of its Kenai Loop wells last year.

—Kristen Nelson

See stories in June 3 issue, available at 11 a.m., Friday, June 1, at

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