* Permit set restrictions, only prep work this year
* US "has set the bar high" for Arctic exploration
* Shell sets early drilling for after Eskimo whale hunt
By Yereth Rosen
ANCHORAGE, Alaska, Sept 20 Royal Dutch Shell Plc
on Thursday won approval for limited drilling in the
Beaufort Sea off northern Alaska, allowing the British oil
company to start one exploration well there while it pursues a
separate prospect in the Chukchi Sea.
The U.S. Department of Interior's Bureau of Safety and
Environmental Enforcement granted Shell a permit to drill to
shallow depths at the Beaufort well, which follows approval
three weeks ago for similar preliminary drilling in the Chukchi.
Environmentalists criticized the decision, even though the
Beaufort permit will not allow Shell to penetrate any oil- or
gas-bearing zones. The restrictions are similar to those imposed
in the Chukchi, where Shell was granted approval to drill down
to only about 1,400 feet because it was unable to bring required
oil-spill equipment to the site, the agency said.
The government "has set the bar high for exploration
activities in the Arctic, and any approved operations must meet
those standards," Jim Watson, the agency's director, said in a
Shell spokesman Curtis Smith called the Beaufort approval a
"major milestone" that clears the way for drilling to start
within days. Once the local Inupiat Eskimo whale hunt is over,
Shell will anchor its Kulluk drill rig in the Beaufort.
Shell is poised to resume shallow drilling in the Chukchi
after a large ice floe moved out of the area, Smith said. It was
able to drill for only one day before the ice drifted in, and
plans to re-anchor the Noble Discoverer rig at its Burger
prospect later on Thursday and restart drilling shortly after.
All this 'top-hole' preparatory work would account for about
half the time it takes to drill a well. "Drilling we complete
this year will position us nicely for 2013," Smith said.
But environmentalists said Shell's setbacks this year
demonstrate the pitfalls of offshore Arctic oil development.
"Letting Shell do top-hole drilling and other preparatory
activities when they are clearly not ready to respond to an oil
spill is like telling a drunk driver that as long as he stays
off the freeway everything should be OK," said Rebecca Noblin,
Alaska director of the Center for Biological Diversity.
Shell has spent an estimated $4.5 billion in recent years on
its plans to explore in Alaska's offshore frontier. It had
targeted three wells in the Chukchi and two in the Beaufort this
season, and a similar number next year. But those plans were
scuttled with its failure to win certification of the required
oil-spill barge and navigational hazards from sea ice.
The oil-spill barge, the Arctic Challenger, has yet to be
certified for seaworthiness, and some of its important
oil-containment equipment was damaged during recent sea trials
in the Puget Sound area. Shell announced on Monday that it would
postpone efforts to drill into oil so it can repair the
equipment and prepare for next year.