Shell's Arctic Drilling Plans Unaffected by Icebreaker Vessel Damage

Strategic Insights -

Shell's plans to drill exploratory wells in the Chukchi Sea off Alaska's northwest coast remain on track despite damage to its icebreaker vessel, the Fennica. The 380-foot vessel will be repaired on the West Coast and return to Alaska in time for the summer drilling season. The Fennica's primary job is carrying equipment for stopping an underwater well blowout, but Shell claims the maintenance work will not impact the drilling schedule. The U.S. Geological Survey estimates the Arctic offshore reserves in the Chukchi and Beaufort seas at 26 billion barrels of recoverable oil, making it a significant target for oil companies.

Key Takeaways:

  • Shell's drilling schedule for two exploratory wells in the Chukchi Sea is not expected to be delayed due to the maintenance work on the Fennica.
  • The Fennica's primary job is carrying equipment for stopping an underwater well blowout, including a capping stack, which can connect to a well head and stop gushing oil.
  • Shell has invested upward of $7 billion on leases and exploration expenses in the Arctic offshore region.
  • The Fennica was damaged on July 3 after striking an uncharted object, creating a hole in the hull about 3 feet long and a half-inch wide.
  • The National Oceanic and Atmospheric Administration has announced the existence of shallow, rocky areas near where the hull was damaged.
  • The Fennica will undergo temporary repairs in Dutch Harbor before being sent to a shipyard on the West Coast for permanent repairs.

Statistics:

  • The U.S. Geological Survey estimates the Arctic offshore reserves in the Chukchi and Beaufort seas at 26 billion barrels of recoverable oil.
  • Shell has invested upward of $7 billion on leases and exploration expenses in the Arctic offshore region.
  • The Fennica spans 380 feet in length.
  • The capping stack used by the Fennica is approximately 30 feet in length.

Sources:

  • "Shell: Drilling schedule unaffected by icebreaker damage"
  • Royal Dutch Shell PLC spokesman Curtis Smith, quoted on Monday.
  • The U.S. Geological Survey, stated in a report on Arctic offshore reserves.
  • The National Oceanic and Atmospheric Administration, submitted a "Dangers to Navigation Report" to the Coast Guard listing the shoal depths near where the Fennica was damaged.