Shell’s plan to explore offshore Alaska this summer hit another snag on Wednesday after regulators said the company can not drill into oil-bearing zones until a capping stack arrives.
The Bureau of Safety and Environmental Enforcement conditionally approved two permits for Shell to conduct limited exploratory drilling in Alaska’s Chukchi Sea.
However, the BSEE said that Shell can not drill into oil bearing zones until required emergency blowout equipment arrives in the region.
The permits currently limit Shell to drilling only the top sections of wells and prohibit it from drilling into oil-bearing zones.
A capping stack for Shell’s offshore Alaska operations was being hauled to the Chucki Sea by the ice management vessel Fennica before a hole was discovered in the ship’s ballast tank last week.
An inspection by the U.S. Bureau of Safety and Environmental Enforcement (BSEE) found that the capping stack was not damaged during the incident, but the Fennica must be dry-docked in Portland, Oregon for repairs.
“If and when the M/V Fennica is capable of being deployed in the Chukchi Sea and Shell is able to satisfy the capping stack requirement, the company may submit an Application for Permit to Modify the APDs and request to have this restriction reconsidered,” the BSEE said.
Fennica was damaged on July 3 as it was departing from Dutch Harbor while hauling the capping stack, a piece of equipment used to contain well blowouts if other primary and backup equipment fails.
Workers aboard the vessel discovered a 39 inch long and half an inch wide gash in the ship’s ballast tank.
Shell said the damage was most likely caused by an uncharted shoal.
The repairs are not expected to impact Shell’s plans to kick off its long awaited offshore Alaska campaign later this month.
The company said last week that it can move forward with its drilling plans as the vessel is being repaired, as long as drilling does not extend into the undersea zone.
A Shell spokesperson told Reuters on Wednesday that the Fennica will likely be able to return to the Chukchi Sea before preliminary drilling encounters the oil zone, a milestone the company expects to reach sometime in August.
“Once we have determined the area is clear of sea ice, support vessels are in place, and the Polar Pioneer (rig) is safely anchored over the well site, drilling will begin,” the spokesperson added.
After two years of legal battles Royal Dutch Shell won conditional approval from the BSEE in June to restart its U.S. Arctic drilling program this summer.
The company’s plans hit another regulatory snag in July after the Interior Department said Shell can not simultaneously drill two wells in offshore Alaska as initially planned.
Prompted by challenges from environmentalist groups, the Interior Department determined that Shell’s plans violated a 2013 Fish and Wildlife Services rule requiring a 15 mile zone between wells.
The company can still drill one well at a time, although it is unclear how the move would impact its drilling plans.
Shell’s exploration plan calls for up to six wells to be drilled at the Burger Prospect in water depths of 140 feet about 70 miles northwest of the village of Wainwright.