Conditional OK for Shell's Alaska offshore oil plan

Reuters News
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Posted: Dec 19, 2011 3:33 AM
Conditional OK for Shell's Alaska offshore oil plan

HOUSTON (Reuters) - The U.S. Bureau of Ocean Energy Management on Friday conditionally approved Shell Gulf of Mexico Inc's revised plan to drill six oil exploration wells in the Chukchi Sea offshore of Alaska next year, the agency said in a news release.

The conditional approval does not authorize drilling to start. Shell Gulf of Mexico, a unit of Royal Dutch Shell, must obtain separate drilling permits for each well.

BOEM's approval also requires the company to undertake a range of safety and environmental protection measures prior to starting work, including winning approval of its well capping and containment system and its oil spill response plan.

The conditional approval seeks to mitigate the risk of an end-of-season spill by requiring cessation of drilling 38 days before the annual onset of sea ice, typically November 1, to allow time for blowout control and cleanup in the event of an accident.

"We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed," BOEM Director Tommy Beaudreau said.

Environmental advocacy groups including the Natural Resources Defense Council, the Sierra Club and a number of Alaska-based groups issued a joint statement decrying BOEM's "reckless" decision.

"There is no proven way to clean up an oil spill in the Arctic's extreme conditions and there is a significant dearth of scientific information, making it impossible to understand the impact of Shell's activities," the groups' statement said.

Shell issued a statement welcoming the BOEM decision, but expressing caution about the provision limiting the Chukchi drilling season.

"We are concerned that this unwarranted restriction could severely impact our ability to deliver a complete Chukchi program," Shell's statement said.

"Shell remains committed to employing world-class technology and experience to ensure the delivery of a safe, environmentally responsible Arctic exploration program," Shell said.

(Reporting by Bruce Nichols; editing by Andrea Evans)