Shell ready to go deep in Arctic

Shell has been given the go ahead by the US government to drill deep enough to reach hydrocarbons in its current Arctic exploration campaign. Previous permits issued in July gave the super-major approval for two new wells, however had limited operations to top hole drilling until the arrival of emergency prevention equipment.

On July 30 Shell began drilling at the Burger J prospect in the Chukchi Sea offshore Alaska. On the same day, the icebreaker Fennica left for the Arctic carrying a capping stack, following repairs to the vessel’s hull in Oregon. As a condition of the approval granted by the Bureau of Safety and Environmental Enforcement, an agency under the Interior Department, Shell is required to have a capping stack, used to plug a blown out well, on site and deployable within 24 hours.

Burger J is one of two prospects Shell has identified, together with Burger V. Shell had originally intended to spud both wells before the end of this year’s drilling season in mid-September. However, Shell is limited to drilling one well at a time, and due to the delays caused by the Fennica, the company has decided to confine 2015 operations to Burger J. Results of the drilling are scheduled for late September.

Shell is expected to invest around $1 billion in its Arctic drilling programme this year, adding to the $7 billion the company has already spent since it began exploring the area in 2007. So far, Shell has not discovered any hydrocarbons. ConocoPhillips and Norway’s Statoil also hold leases for the US portion of the Arctic, however have no immediate plans to act on them. According to 2011 Interior Department data, the US Arctic holds 22 billion barrels of recoverable oil and 2.63 tcm (93 tcf) of gas.