Damaged Shell drilling rigs to be shipped to Asia — not Seattle — for repairs
It isn’t clear whether the damaged rigs can be repaired in time to drill this summer off Alaska’s North Slope, where Shell has been involved in a seven-year, $4.5 billion quest to open a new oil frontier.
Shell Oil will send two Arctic drilling rigs to Asia — rather than Seattle — for major repairs that could put at risk plans to resume a search for oil next summer off Alaska’s North Slope.
One of the rigs, the Kulluk, which has no propulsion system, was being towed to Seattle on Dec. 31 when it broke free amid fierce storms and went aground off Alaska’s Kodiak Island. It was later refloated.
A second drilling ship, one that moves under its own power, the Noble Discoverer, has problems with its propulsion system and could require an engine replacement, according to Curtis Smith, Shell’s spokesman in Alaska.
“A number of shipyards in Asia have the available dry-dock facilities and capacity to best execute these types of projects,” Smith said in a written statement released Monday evening.
Both vessels will be “dry towed” to the Asian shipyards, according to Smith. That typically involves loading them onto larger vessels for transport.
Work to prepare the rigs for a first year of drilling last summer was performed at Vigor Shipyards in Puget Sound, and both rigs were initially scheduled to return to Washington for additional work, according to Smith.
It is unclear when the rigs will head to Asia, or whether they can be repaired in time to drill this summer off Alaska’s North Slope, where Shell has been involved in a seven-year, $4.5 billion quest to open a new oil frontier.
“We have not made any final decision on 2013 drilling in Alaska,” said Smith, Shell’s spokesman in Alaska. “The outcomes of inspections and the scope of repairs needed in Asia will decide that.”
The problems that have beset the drill rigs may strengthen the position of environmentalists who have repeatedly sued to stop or postpone exploration they say risks an oil spill that would be nearly impossible to clean up.
The repairs also could give the Obama administration more time to decide whether to allow Shell to continue operations in two Arctic seas after repeated accidents, failed inspections and mechanical problems, which have called into question the company’s safety management.
The administration has supported Shell’s efforts to explore what could be a huge new oil field with the potential to produce hundreds of millions of barrels of oil over decades.
But two separate federal inquiries — one into the grounding of the Kulluk, and a more general review of Shell’s safety controls and oversight of contractors — have also stalled its plans.
Shell executives said the decision to send the two drill vessels to Asia, where there are extensive dry-dock facilities, for repair work, was voluntary and the extent of the work needed was unknown.
For drilling to proceed, two vessels are needed, one of them to stand by to drill relief wells in case of a blowout. It would be difficult to find other suitable ships for drilling in the Arctic.
Shell executives said the Kulluk suffered damage to its hull when it was grounded in a fierce storm on tiny Sitkalidak Island. Seawater also caused electrical damage.
The Noble Discoverer dragged its anchor last July and nearly ran aground on the Alaska coast. Four months later it was damaged by an explosion and fire while still in port in the Aleutian Islands. In late November, a Coast Guard inspection team found problems with its pollution-control systems.
“Shell can’t get away from the fact this has been a difficult, complex operation that didn’t go well,” said Lois Epstein, an environmental engineer who serves as Arctic program director for The Wilderness Society. “They knew they were under tremendous scrutiny, and they still couldn’t perform.”
A separate oil-spill-response barge failed Coast Guard inspections last August and was fined for four illegal fluid discharges. When a containment dome carried on the barge was tested last summer off the Washington coast, it came loose while being lowered into the water. As the dome floated to the top, the steel siding bent under the water pressure.
Without the necessary containment equipment, Shell’s two drill vessels were not able to drill in deep zones containing oil and gas. Instead, they drilled a couple of top holes in preparation for deeper drilling next summer.
The window for drilling, based on ice floes and agreements with Alaska Natives to protect whales and other wildlife, opens in July and continues into October. Over the past four years, Shell was prepared to drill but was stopped by court challenges, regulatory delays, a moratorium on drilling after the 2010 BP spill in the Gulf of Mexico and failed permit tests.
The two drill vessels are aging, which may have contributed to the problems.
The Noble Discoverer, built in 1966, was a log carrier before it was converted into a drill ship in 1972. It has been upgraded several times, but environmentalists have questioned whether it is tough enough to operate in the high winds and ice movements of the Arctic.
After a day of drilling last September, Shell was forced to disconnect the rig from its seafloor anchor as a large ice pack approached 10 miles away.
The Kulluk was built in 1983 and has drilled a dozen wells in the Beaufort Sea. But it has not drilled a complete well since 1993, and it was moored for 17 years in the Canadian Arctic. Shell already has spent more than $200 million overhauling the vessel.
This story includes reporting from The New York Times, Seattle Times staff reporter Hal Bernton and The Associated Press.
Hal Bernton: 206-464-1898 or email@example.com