Alaskans are closely watching Shell’s progress because of the huge potential for new oil and gas discoveries in the OCS. Even though production from federally owned offshore areas would not benefit the state treasury, because no state taxes or royalties would be paid, new oil flowing through the Trans Alaska Pipeline System would be hugely beneficial. Arctic drill vessels, the Kulluk, while that rig was being towed across the Gulf of Alaska to the Pacific Northwest to undergo winter maintenance. Cut loose from its tow lines, the Kulluk grounded on a small island near the south shore of Kodiak. It was a tough way to end the year. On the last day of 2012, the rig was separated from tow lines connecting it to tugs and washed ashore on Sitkalidak Island off Kodiak’s southern shore. The tug and drill crews were fighting ferocious weather, with seas at 30 feet and more and high winds. The lines from the tow vessel to the rig had first separated a few days earlier and were reattached, and then separated again several times, as the winter
storm worsened. Luckily the Kulluk grounded in shallow water off a gravel and sand beach—not a rocky coast— and no oil spill was apparent. Shell was quickly working on a salvage plan in the first few days of January. The Kulluk was one of two drilling vessels Shell used in 2012. The other, the Noble Discoverer, is a conventional drill ship where the rig is built into a ship with its own propulsion system. The Kulluk, in contrast, is a conicalshaped mobile drill vessel that does not have its own power to self propel. It is a one-of-a-kind vessel—there is none other like it—and its unique design is intended to withstand forces of ice in the Arctic offshore at a stationary drilling location. However, not having
a propulsion system means it must be towed when being moved, like a barge. That was the challenge when the Kulluk was being towed through heavy Gulf of Alaska seas in late December 2012 and tugs were unable to keep tow lines attached in the bad weather. The Kulluk was built years earlier just for the Arctic and had drilled in the Alaskan and Canadian Beaufort Seas for other companies. It had been stored in the Canadian Beaufort Sea for some years and was purchased and refitted by Shell for use in the Alaska Beaufort Sea after the company acquired OCS leases in 2005. Meanwhile, the Noble Discoverer was also contracted by Shell and was assigned to drill in the Chukchi Sea in an area generally west of Barrow where Shell had acquired leases in 2008. Several other companies also acquired OCS leases in the 2008 sale, including ConocoPhillips and StatOil, which plan exploration programs that are separate from Shell’s.
Improved Technology
Both regions are not new to oil explorers, including Shell. In fact, Shell had
www.akbizmag.com • Alaska Business Monthly • February 2013
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