Waves crash over the conical drilling unit Kulluk where it sat aground on the southeast side of Sitkalidak Island, Alaska, Jan. 1, 2013. U.S. Coast Guard photo by Petty Officer 3rd Class Jonathan Klingenberg.

Waves crash over the conical drilling unit Kulluk where it sat aground on the southeast side of Sitkalidak Island, Alaska, Jan. 1, 2013. U.S. Coast Guard photo by Petty Officer 3rd Class Jonathan Klingenberg.

In fact, Shell is sending both Alaskan rigs to Asia for repairs

By Brian Swint

(Bloomberg) — Royal Dutch Shell Plc sent two of its drill rigs in Alaska to Asian shipyards for repair, casting doubt over prospects for exploration in the Arctic this year.

The Kulluk, damaged when it ran aground six weeks ago, will be towed to a dry dock in Asia, Europe’s biggest oil company said today in a statement. The Noble Discoverer will go to a shipyard in Korea. The outcome of inspections and any repairs will determine when they return to service, the company said.

Read: Shell Statement

Shell had spent about $4.5 billion in the past seven years seeking to drill in Alaskan waters before the Kulluk broke free of a tugboat in a storm on Dec. 31 and ended up stranded on an uninhabited island. The Noble Discoverer slipped its mooring in the Aleutian Islands in July and drifted toward the shore.

“We have not made any final decision on 2013 drilling,” said spokesman Jonathan French. “Shell remains committed to safely exploring for Alaska’s offshore energy resources.”

Shell held steady at 2,150 pence by 9:31 a.m. in London.

The company’s work was also set back when a containment dome designed to cap oil spills had difficulty getting U.S. certification and was damaged during tests in September.

Shell is being “very cautious” in the environmentally sensitive region and the two rigs would need more work to be ready for the 2013 season, Chief Executive Officer Peter Voser said Jan. 31. The producer missed fourth-quarter estimates for earnings on higher costs for bringing oil and gas to production.

60-Day Review

U.S. Interior Secretary Ken Salazar ordered a 60-day review of Shell’s activities on Jan. 8. The company’s “mishaps” may keep the company from continuing its work this year, he said.

Oil prices higher than $100 a barrel and receding Arctic sea ice, which last year shrank to a record in the annual melt season, have sparked a race to explore for untapped oil and gas in the waters off Greenland, Alaska and Russia. The push has raised concerns that spills will be harder to clean up in the harsh conditions as oil takes longer to decompose in the cold.

Environmental groups said Jan. 3 they would ask President Barack Obama to suspend current and pending Arctic drilling permits until operators prove they can work safely.

The U.S. Environmental Protection Agency issued a notice to Shell last month saying operating the Kulluk while drilling in the Arctic Ocean violated its permit under the Clean Air Act. Each violation can mean a penalty of $37,500 a day, it said.

Copyright 2013 Bloomberg.

Share →
  • Arctic Sailor

    They did have over $130 million in repairs done in the US last year, not to mention the response barge rebuild and all the contract jobs given to Chouest, Crowley, Foss, Seward dock workers, shipboard medical staff from Alaska, Protected Species Observers from Barrow, etc. But I believe US yards are not capable to repair or fix the problems the two rigs have now. Does the US even have a drydock big enough to fit or lift the Kulluk??? Also, the new main engine for the Discoverer is readily available in Korea, not in the US. I’m all for US workers in US yards getting work, but sometimes you need to go to the best available yard for your project.

  • Arctic Sailor

    And every single one of the workers onboard these vessels ARE American.

  • http://buysredbottomshoesa.talk4fun.net/ jedgesAftettY

    you’ve an excellent blog here! would you like to create some invite posts on my weblog?

    [url=http://outletschristianlouboutinsa.0fees.net]real christian louboutin[/url]


Sign up for the gCaptain Newsletter!

Over 31,000 people receive the gCaptain email newsletter every single day. Get the maritime and offshore industry headlines that matter sent straight to your inbox. Or LIKE us on Facebook!

We will not share your email address with anybody for any reason