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UPDATE 1-Shell's damaged Arctic drilling support ship heads to Oregon

Mon, 13th Jul 2015 21:30

(Adds details, background on Portland port)

By Timothy Gardner

July 13 (Reuters) - Royal Dutch Shell PLC said onMonday an icebreaker crucial to planned Arctic oil drilling willbe sent to Portland, Oregon to repair a gash in its hull, butthe issue is not expected to delay the beginning of drilling offAlaska later in July.

Shell crew on the Fennica icebreaker last week found the39-inch (1 meter) gash in the hull, likely caused by anuncharted shoal. Voyage time between Portlandand southern Alaska should not delay the company's plans tobegin drilling off northern Alaska in the Chukchi Sea later thismonth, Shell spokesman Curtis Smith said.

Shell believes that drilling can proceed while the Fennicais being repaired so long as it does not extend into theundersea zone bearing oil and gas. It plans to build thefoundations of wells and do other preparatory work beforedrilling into that zone.

"We do not anticipate any impact on our season as we don'texpect to require the vessel until August," Smith said.

The Fennica is one of two ice management vessels in Shell'sfleet of nearly 30 ships it expects to bring to the Chukchi offnorthern Alaska this summer. It contains the capping stack, oremergency equipment designed to contain a blown-out underseawell, required for the drilling.

The gash in the Fennica was the second recent setback toShell's Arctic ambitions. On June 30, the Interior Departmentinformed Shell that established walrus protections prevent itfrom drilling two wells simultaneously that are less than 15miles (24 km) apart, which means the company has to adjust itsdrilling this year.

The Fennica is being repaired in Portland and not in portsin and near Seattle, where two Shell oil rigs had been storedbefore departing for Alaska, because those facilities are onlyavailable for light maintenance, Smith said.

Shell has not drilled in the Arctic since 2012 when afterthe summer drilling season, an enormous drilling rig it wasleasing broke free and grounded. If Shell discovers oil, itcould begin producing in 10 or 15 years. After this season, itwill have spent about $7 billion on Arctic drilling off Alaskabefore producing oil.

The company needs two minor permits from the Department ofInterior before it can start drilling. (Reporting by Timothy Gardner; Editing by Leslie Adler andMarguerita Choy)

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