Monday, August 13, 2012

Shell still waiting for completion of work on Arctic Challenger

—Alan Bailey

The bulk of Shell’s Arctic drilling fleet remains on hold in Dutch Harbor in the Aleutians while the company waits for the completion of modifications to its Arctic Challenger containment barge and U.S. Coast Guard certification of the modified vessel.

Shell spokesman Curtis Smith told Petroleum News in an Aug. 8 email that construction on the barge was nearly done. Meantime, three vessels from Shell’s fleet — the Aiviq, Shell’s new ice-capable anchor handler, the Fennica, the icebreaker carrying the company’s new well capping stack, and the icebreaker Tor Viking — headed north from Dutch Harbor early in August to start preparations for drilling at one of Shell’s Chukchi Sea drilling sites.

Shell had originally planned to move its fleet north to the Chukchi in early July, but exceptionally heavy sea ice in the region of its drilling locations coupled with delays in the completion of modifications to the Arctic Challenger have delayed the start of the drilling project.

“Sea ice is still bordering our Chukchi prospects and is still quite persistent in the Beaufort,” Smith said in his Aug. 8 email.

Because of the delays, Shell says that it is scaling back its drilling plans to just one well in its Chukchi Sea Burger prospect and one well in its Beaufort Sea Sivulliq prospect this year — the company had planned to drill up to three wells in the Chukchi and up to two wells in the Beaufort. However, the company plans to drill the top-hole sections of some additional wells, to gain a head start on next year’s drilling program.

Arctic Challenger

Shell contractor Superior Energy is retrofitting the Arctic Challenger in Seattle with Shell’s new Arctic oil containment system, designed to gather oil from a leaking wellhead in the unlikely event of a subsea well blowout. Upon completion of the modifications, the barge will require Coast Guard certification, to ensure that the vessel can be operated safely for its intended purpose. Following an agreement with the Coast Guard in July, the Coast Guard is applying the safety standards for a mobile offshore drilling unit for the certification.
Approval of Shell’s drilling permits by the Bureau of Safety and Environmental Enforcement is apparently contingent on certification of the containment barge.

In an Aug. 6 email Cmdr. Christopher O’Neil of the U.S. Coast Guard told Petroleum News that a stability test of the vessel was successfully completed on Aug. 2 and that the Coast Guard was evaluating the results. Certification of the vessel involves verifying about 400 inspections and review items relating to factors such as the design, construction and installation of safety, structural, electrical and other systems and subsystems, O’Neil said. The timeline for the certification depends on how quickly Shell, Superior Energy or the shipyard can furnish the necessary information to the Coast Guard, as the work on the vessel is completed, O’Neil said.

“The Coast Guard cannot speculate as to how long it will take for the Arctic Challenger to receive a certificate of inspection. What I can tell you is that we continue to provide marine inspectors to attend the vessel as construction and systems are completed and made ready for our inspection,” O’Neil wrote, adding that the Coast Guard’s prime concern is the preservation of life at sea.

Air permits

Before Shell can start drilling in the Chukchi Sea the company also needs approval by the Environmental Protection Agency of requested modifications to the air permit for the Noble Discoverer, the drillship that the company plans to use for its Chukchi Sea wells. EPA has yet to announce any decision on Shell’s request. The agency has said that changes to the permit require a public review but Shell has said that it is working with the agency to obtain a compliance order, enabling the company to continue with its 2012 drilling pending a full review of the permit. Apparently the requested changes do not cause the total emissions from Shell’s operations to exceed permitted levels.

The requested permit changes include an increase to the permitted emissions of particulates from the engine exhaust of the Nanuq, Shell’s purpose-built, ice-capable oil spill response vessel. On Aug. 6 Shell told EPA that, although Shell is requesting an increase to the particulate limit for the Nanuq, recent testing has shown that a smaller increase is required than originally thought.

Shell has also requested some changes to the air permit for the Kulluk, the floating drilling platform that the company plans to use in the Beaufort Sea. However, under the terms of the Kulluk permit, Shell can use the vessel while EPA is reviewing the change request.

Major upgrades

In 2010 Shell spent around $25 million upgrading the Noble Discoverer’s exhaust systems, to reduce the vessel’s air emissions. And in June the company completed a $100 million upgrade to the Kulluk. The Nanuq was purpose built for Shell’s Arctic operations in 2007.

In its application to modify the Noble Discoverer air permit Shell said that it had conducted hundreds of tests on emissions units in the vessel and its support fleet since the issue of the permit and that those tests had revealed issues that warranted additional explanation or permit revisions.