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Shell Hits Snags in Alaska Drilling

Maritime Activity Reports, Inc.

July 11, 2012

The drill rig Kulluk and the drill ship Noble Discover leaving Vigor’s Seattle shipyard on their way for Shell’s exploratory operations in the Chukchi and Beaufort Seas in the Alaska Arctic. (Photo courtesy Vigor Industrial)

The drill rig Kulluk and the drill ship Noble Discover leaving Vigor’s Seattle shipyard on their way for Shell’s exploratory operations in the Chukchi and Beaufort Seas in the Alaska Arctic. (Photo courtesy Vigor Industrial)

While much attention justifiably has been paid to the expansion of offshore energy operations in the Arctic, according to a Reuters report one of the pioneers, Shell, has hit a few snags in its long-anticipated exploration drilling in the Chukchi and Beaufort Seas.
According to the news agency, heavier than expected ice in Arctic waters off Alaska will likely delay until August it exploration drilling, and according to a report in the July 11 edition of the Wall Street Journal the company is facing delays to get final approval from the U.S. Coast Guard for an oil spill containment vessel -- the same type that was used to ultimately stop the BP Gulf of Mexico blowout -- a critical piece of the plan to ensure safe Arctic drilling.
According to the Reuters report, Shell was initially scheduled to start drilling this month, in what promises to be an already tight window of opportunity.
Sea ice is "the number one reason we won't be drilling in July," a company spokesman was cited in the Reuters report.
While sea ice cover is sparse in most of the Arctic, ice off Alaska is thicker than in recent years, and that ice is melting fast, according to the National Snow and Ice Data Center.
Most of Shell's 22-vessel fleet that will drill in both seas is now sailing to Alaska, accoding to the Reuters report.

Expanding Business
The push for offshore business in the Arctic has also helped to reinvigorate the maritime business in the Pacific Northwest U.S., according to a recent report in the July 2012 edition of Maritime Reporter & Engineering News, led by Vigor Industrial.
Shell’s exploratory operations off the north coast of Alaska have presented a new opportunity for Vigor to use its expertise. Vigor has serviced both of the two rigs at the heart of Shell’s project and nearly half of the 21 support vessels involved.  “Shell has been an unbelievably good partner to work with,” said Vigor Industrial’s VP of Business, Vince Piscitello, “from the engineers to division presidents.”
Recently Vigor completed work on the Kulluk, a 266-ft by 230-ft ice-classed semi-submersible drill rig, and the Noble Discoverer, a 512-ft ice-classed drill ship. Both vessels left Vigor’s Seattle facility bound for the Arctic’s Beaufort and Chukchi Seas in late June. The work included extensive environmental and safety upgrades. The Kulluk now operates with zero discharge and the Discoverer complies with the strictest air standards in the world. Vigor installed six EPODS on the Discoverer, one on each engine, which are essentially large catalytic converters removing harmful emissions.
“We deployed 500 people to work on the Discover project alone,” said Grant Fosheim of Vigor Industrial’s marketing department. “We were able to perform six months of work in ten weeks.”
Other vessels Vigor serviced for Shell’s Arctic exploratory project include the Klamath, which Vigor converted from a tanker barge to an ice-classed oil spill response vessel, and the Arctic Challenger which Vigor is converting from a deck barge to a containment system vessel. In the Portland yard, Vigor serviced the Fennica and Nordica, two ice-classed offshore support vessels owned by Arctia Offshore which will be joining Shell’s flotilla.
“Ten to 15 percent of revenues over the past year have been derived from Arctic work,” said Piscitello. There was a big push to prepare for work in the Arctic this year and last, he explained, so that percentage may drop in the next year. However, “looking into the future we expect significant growth in this area.”

(Sources: Reuters, Wall Street Journal, Maritime Reporter & Engineering News)

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