Beset with problems, Shell calls off Arctic drilling

The Kulluk, under tow (pic US Coast Guard)

Royal Dutch Shell will not be drilling for oil in Alaska’s Beaufort and Chukchi Seas this year, the company said in a statement.  “Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people,” said Marvin Odum, director, Upstream Americas.

The decision comes after Shell ran into a slew of problems last year while drilling for oil in the Chukchi and Beaufort Seas. The company, which has spent $4.5 billion in the region since 2005, had the Kulluk drillship running aground near Kodiak Island on Dec. 31 in a storm after her towlines snapped. With engine failures on the specially designed Aiviq, additional problems with support vessels, and regulatory scrutiny after a fire aboard the rig ‘Noble Discoverer,’ Shell’s capacity to search for oil in the region is obviously compromised. 

To make things worse, the Discoverer has alleged to have violated safety and environmental procedures. Reuters quotes Guard Chief Petty Officer Kip Wadlow as saying that the Justice Department was now in charge of any potential sanctions against Shell or Noble (the owners of the Discoverer), and Assistant U.S. Attorney Kevin Feldis confirmed it was now in the department's hands.

"It's too early to know where that investigation and review will lead," Feldis said. 
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