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Shell seeks arctic extension

Written by  OE Staff Thursday, 30 October 2014 04:38

Shell has asked the Obama administration for five more years to explore for oil off Alaska’s coast, saying set backs and legal delays may push the start of drilling past the 2017 expiration of some leases.

In a letter to the Interior Department it said the “prudent” exploration before leases expire was now “severely challenged.”

“Despite Shell’s best efforts and demonstrated diligence, circumstances beyond Shell’s control have prevented, and are continuing to prevent, Shell from completing even the first exploration well in either area,” Peter Slaiby, vice president of Shell Alaska, wrote to the regional office of the Bureau of Safety and Environmental Enforcement, reported Bloomberg.

Shell has already spent eight years and US$6 billion to search for oil in the Arctic’s Beaufort and Chukchi seas.

The firm's exploration work off Alaska were set back in late 2012 by mishaps involving the Kulluk drilling rig and spill containment system. The Hague-based company halted operations in 2012 to repair equipment and hasn’t resumed its maritime operations off Alaska’s northern coast.

Bloomberg says the July 10 letter from the company, released by the environmental group Oceana, which got it after a public records request, seeks to pause Shell’s leases for five years. Leases issued by the government for the right to drill for oil in the Arctic expire in 10 years unless the holder can show significant progress toward development.

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