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Shell postpones Alaska drilling plans

17 Sep 2012, 10.07 am GMT

Shell postpones Alaska drilling plans

London, 17 September (Argus) — Shell has postponed plans to drill for oil off Alaska this year after vital equipment on its oil spill containment vessel was damaged.

Damage to the containment dome on board the Arctic Challenger was sustained during a final test, forcing the firm to revise its 2012-13 Arctic exploration programme.

“We will forgo drilling into hydrocarbon zones this year. Instead, we will begin as many wells, known as “top holes”, as time remaining in this season allows”, the company said today. “The top portion of the wells drilled in the days and weeks ahead will be safely capped and temporarily abandoned this year.”

Shell has not yet received authorisation to drill in hydrocarbon-bearing zones off Alaska. US regulators will only issue a permit when the oil spill containment equipment has been successfully tested.

The company was given permission to begin preliminary work on its Burger-A prospect in the Chukchi Sea earlier this month but halted drilling after just one day because of encroaching sea ice. Shell expects to resume work at Burger-A “in the days ahead” and plans to begin drilling in the Beaufort Sea when the whaling season is over, subject to receiving a top hole drilling permit.

Shell must stop all drilling by 31 October under the terms of its exploration plan, but the company has requested an extension in the Chukchi to as late as 18 November, saying its weather forecast models indicate ice will not develop in the area as early as usual.

The company had planned to complete up to two exploration wells in the Chukchi and Beaufort seas this year and a further 10 by the end of the 2013 drilling season. It has not indicated whether it plans to increase its well count next year to mitigate this year's postponement.

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