Shell: Drilling On New Deepwater Gulf Well To Start In April

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March 31, 2011

U.S. regulators said Wednesday oil company Royal Dutch Shell PLC (RDSA, RDSB, RDSA.LN, RDSB.LN) has received approval to drill a new well in the deep-water Gulf of Mexico as part of its recently approved exploration plan for the area.

This marks the first time since the 2010 spill that the administration has approved plans to drill new oil-and-gas resources. Previously, regulators had approved only wells that were being drilled at the time the administration’s moratorium went into effect.

The approved permit allows Shell to drill a well in Garden Banks Block 427 in 2,721 feet of water depth, approximately 137 miles off the Louisiana coastline, the Bureau of Ocean Energy Management, Regulation and Enforcement said.

The Cardamom well is expected to be drilled in April and results are expected by the end of August, the company said in a statement.

“This is the first permit issued to new drilling activities since the moratorium was lifted. Shell is proud to lead industry in returning people to work in the deepwater Gulf of Mexico,” said Marvin Odum, president of Shell Oil Co.

In order to receive the permit approval, Shell complied with safety standards implemented in the wake of last year’s Deepwater Horizon rig explosion and oil spill, including satisfying the requirement to demonstrate the capacity to contain a subsea blowout, the government said. Shell’s deep-water exploration plan was approved this month.

Shell will use the Marine Well Containment Co. containment system as its oil spill containment solution. The system was built by a nonprofit consortium of large oil companies led by Exxon Mobil Corp. (XOM).

-By Isabel Ordonez, Dow Jones Newswires

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