Shell moves forward

Mobilizes out-of-state assets for shallow water Chukchi and Beaufort drilling

Alan Bailey

Petroleum News

Despite the unfolding oil-spill disaster in the Gulf of Mexico, Shell is planning to go ahead with its 2010 exploration program in the Beaufort and Chukchi seas off northern Alaska. The company has started moving vessels and other equipment from distant locations, in preparation for assembling its Arctic drilling fleet, Shell’s Alaska vice president told Petroleum News May 14.

“Our assets are moving,” Pete Slaiby said. “… We’ve mobilized every piece of equipment that’s not local (in Alaska).”

Slaiby expressed his confidence in the safety of his company’s planned operations, saying that drilling conditions in the Alaska OCS will be very different from those in the Gulf of Mexico.

“We’re in 150 feet of water, versus 5,000 feet,” Slaiby said. “We have about one third of the reservoir pressure.”

The Chukchi Sea wells will bottom out at around a depth of 8,000 feet, as compared to the around 18,000-foot depth of the Gulf of Mexico well that went out of control, Slaiby said.

Slaiby said that Shell is confident in the anticipated relatively low pressure of its planned Alaska wells because of experience from previous drilling in adjacent fault blocks, coupled with information gleaned from seismic data and other subsurface data.

And because of the shallow water depths, the drilling operation will be much more straightforward than in the deepwater Gulf of Mexico, with just a 150-foot hydraulic line extending from the drillship to control the blowout preventer at the wellhead in the seafloor and a relatively short length of drill pipe between the drilling vessel and the wellhead, Slaiby said.

Slaiby said Shell is planning to use an especially robust system for sealing the well down hole. The company also is considering an upgrade to the well blowout preventer that will be used, possibly adding a second shearing ram — the hydraulic ram of last resort that slices through the drill pipe to seal the well — and possibly adding a set of blowout preventer controls outside the seafloor cavity that the blowout preventer will sit in.

Same-season relief well capability

And, given the relatively short open water season for drilling in the Arctic offshore, time is of the essence in moving a drillship onsite to drill a relief well before the onset of winter sea ice brings a halt to drilling operations.

However, Slaiby says that Shell plans to hold in reserve the Kulluk, a drillship that Shell owns and that is currently moored in McKinley Bay on the coast of the Canadian Beaufort Sea.

“The policy is that we would have the Kulluk ready for a same-season relief well,” Slaiby said.

However, Shell also is looking at other possibilities for a backup drilling rig, he said.

Oil spill response equipment on hand

Shell officials are now embarking on visits to the North Slope to meet with people from the local communities, including people from the North Slope Borough and from the Northwest Arctic Borough, for discussions about how Shell’s Arctic drilling will compare with drilling in the Gulf of Mexico, Slaiby said.

“We want to tell the story,” Slaiby said. “We recognize that it’s really important to the communities to have an opportunity to discuss their concerns.”

Must get remaining permits

The company is particularly pleased with the unanimous decision by a panel of judges in the U.S. Court of Appeals for the 9th Circuit to reject an appeal against approval of the company’s 2010 Chukchi Sea and Beaufort Sea exploration plans.

“It says a lot for the thoroughness with which these permits have been worked,” Slaiby said, adding that in its 2010 plans Shell had rectified some weaknesses in earlier 2007 plans.

The U.S. Environmental Protection Agency had issued the company’s air quality permits but those permits are being appealed in the Environmental Appeals Board. Shell also needs incidental harassment authorizations and letters of authorization from the National Marine Fisheries Service and the U.S. Fish and Wildlife Service for the unintentional disturbance of marine mammals.

However, Slaiby said that Shell has signed a conflict avoidance agreement with the Alaska Eskimo Whaling Commission, agreeing on procedures to avoid disturbance to subsistence whale hunting by North Slope communities.

But the U.S. Minerals Management Service drilling permits that Shell will need prior to any drilling operation present a significant issue, given that the Department of the Interior has placed a hold on the issue of any new permits pending the delivery in late May of an offshore drilling safety report as a follow up to the Gulf of Mexico disaster.

DC appeal still an issue

A court rejection of the revised version of the lease sale program will lead to uncertainty over the status of the Chukchi Sea leases.

In that case, Shell will likely go ahead with its planned Beaufort Sea drilling, even though the company views its Chukchi Sea program as having higher priority, Slaiby said.

“If things go badly in the DC Circuit, the Beaufort would clearly still be an option.”

Shell tells MMS about safety precautions

Those technologies include downhole technology that ensures hydraulic isolation of an underground oil reservoir, and a two-barrier system within the well to prevent any unintended flow of fluids up the well. The blowout preventer, the device that will sit at a wellhead as a last line of defense against loss of well control, has been extensively inspected and tested, and will undergo further testing before use, Odum said.

Moreover, unlike the well in the Gulf of Mexico incident, Shell’s planned 2010 Arctic wells will be exploratory in nature, and will not be converted for future production operations, Odum said. And any coring of rock samples would be done by drilling a secondary, bypass hole, after using the initial well hole to determine parameters such as reservoir pressures and fluid content.

Odum also emphasized several safety aspects of Shell’s program, including plans for curtailing drilling operations when necessary, and a capability to respond within one hour to any oil spill emergency.

And, among the company’s arsenal of oil spill response equipment, Shell will have remote operating submarines and a prefabricated subsea coffer dam. The coffer dam will have technology to prevent clogging by methane hydrate, Odum said.

—Alan Bailey

Storm of protest over Shell’s plans

“With no way to clean up a spill in the Arctic’s harsh and icy conditions and limited capacity to respond to a major spill, the risk is too high in the Arctic — especially since the lessons from the Gulf have yet to be learned,” said Rebecca Noblin of the Center for Biological Diversity, in a statement characteristic of several from the environmental community. “The Obama administration must act now to cancel this summer’s plans for offshore drilling in the Arctic before we sacrifice another one of our precious coasts.”

The Pew Environmental Group listed a string of concerns about Shell’s program, including extreme Arctic weather; the distance of well sites from shore; the lack of a support infrastructure and what Pew claims is an understatement by MMS of well blowout risks. Pew also says that oil spill cleanup technologies have not been proven to be effective in the Arctic.

—Alan Bailey