Shell: The Plan Was Always to Move the Kulluk in December

Updated: January 6, 2013 (Originally published January 5, 2013)

Editor’s Note: Shell’s statement comes on the heels of reports yesterday that Shell’s decision to move the Kulluk was to avoid Alaskan state taxes on equipment dedicated to oil and gas development and exploration. “It’s fair to say that the current tax structure related to vessels of the type influenced the timing of our departure. It would have cost Shell multiple millions to keep the rigs here,” a Shell spokesman told the media. More HERE.

By Rob Sheridan

Repair work on the Arctic drilling ship Kulluk had to be carried out in Seattle, according to Royal Dutch Shell Plc, after the vessel broke free from a tow boat during a storm on Dec. 31.

The Kulluk is now grounded and upright near Sitkalidak Island, on the north edge of Ocean Bay, about 60 miles (97 kilometers) southwest of Kodiak, Alaska, according to a statement on the website of the Unified Command in Anchorage, the state capital. The crew have been evacuated and the vessel is not leaking fluid, according to a Unified Command statement.

Maintenance work necessary for the Kulluk meant the ship repairs couldn’t have been completed in Alaska, Shell said in a statement today. The Kulluk’s grounding is the latest setback Shell has faced in its efforts to tap Arctic oil. Environmental groups said Jan. 3 they would ask President Barack Obama to suspend all current and pending Arctic drilling permits until operators prove they can work safely in the region’s harsh conditions.

The decision to move the Kulluk “was based on an approved tow plan, which included weather considerations, and safely executing a planned maintenance schedule for the vessel,” Shell said in an e-mailed statement today. “The plan was always to move the Kulluk in December.”

The Unified Command system includes the U.S. Coast Guard, Alaska Department of Environmental Conservation, Kodiak Island Borough and Shell. As much as 143,000 gallons of diesel and approximately 12,000 gallons of other refined oil-products are currently stored on board the Kulluk, according to the statement.

Copyright 2013 Bloomberg.

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