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Shell, which has spent eight years and $6 billion to explore the Arctic’s Beaufort and Chukchi seas, said in letter to the Interior Department that “prudent” exploration before leases expire is now “severely challenged.”
Shell moved Thursday to deepen its relationship with Alaska natives who live near the company’s Arctic oil wells, signing a deal that gives them royalties from some of the projects an option to buy into them later.
Shell’s Kulluk drilling rig ran aground Monday night near Alaska’s Kodiak Island after a five-day fight to tow the vessel through a fierce storm and 70-mph winds.
On an all-but-invisible horizon, light gray mist meets dark gray water. Tiny, dry snowflakes and ice crystals swirl across the deck of the drillship Noble Discoverer, driven by a wind that whips through the warmest coveralls.
Shell on Wednesday was wrapping up its first-in-a-decade season drilling in U.S. Arctic waters, having punched two holes underneath the Chukchi and Beaufort Sea in search of oil.
On top of the world, nearly 400 miles above the Arctic Circle and 70 miles from the nearest land, optimism is as boundless as the Chukchi Sea stretching on the horizon. Despite repeated setbacks, many on the 124-person team boring an exploratory well for Shell are convinced the company will strike oil here, opening a new frontier in U.S. oil development and making a discovery that could rival the bounty in the deep-water Gulf of Mexico.
Shell began boring its first well in the Chukchi Sea in more than two decades on Sunday, kicking off what company executives anticipate will be years of work tapping prospects throughout U.S. Arctic waters.
The Noble Discoverer began a one-week trek to the Chukchi Sea on Saturday afternoon, moving Shell one step closer to drilling for oil in Arctic waters this summer. The company is now talking with federal regulators about a plan that would allow Shell to launch some initial work at its Arctic well sites, even without a key oil spill response vessel nearby.
Shell on Tuesday began preparations to install anchors at the site of one of its planned wells in the Chukchi Sea north of Alaska — a major step toward launching a new era of Arctic oil exploration, even as the company has been forced to scale back its drilling plans.
For four years, the public face of Shell’s Alaska venture has been working to convince federal regulators and native Alaskans that the company’s plans to search for crude underneath arctic waters can be done safely, without harming whales, walruses and the subsistence hunters that depend on them for food.