Shell Won't Drill in Arctic Next Year

"We've made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way," said Marvin Odum, the company's director, Upstream Americas.

Royal Dutch Shell plc announced Feb. 27 that it will not resume exploratory drilling in 2013 in Alaska's Beaufort and Chukchi Seas, choosing instead "to prepare equipment and plans for a resumption of activity at a later stage."

The company's ambitious plans for offshore Arctic drilling hit a snag late last year when its Kulluk drilling rig broke loose while being towed to a Washington state port. The rig ran aground and was damaged.

"We've made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way," said Marvin Odum, the company's director, Upstream Americas, in a news release. "Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012."

The company completed top-hole drilling on two wells in 2012 in the Beaufort and Chukchi Seas prior to the Kulluk grounding. Shell has announced the Kulluk and the second drilling rig, the Noble Discoverer, will be towed to locations in Asia for maintenance and repairs. "Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators and meets the high standards the company applies to its operations around the world," Odum said. "We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area."

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