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Repsol Drilling Delay Adds to Oil Patch Chill on Alaska Shore

A restructuring of Repsol SA’s Alaska drilling project is adding to the state’s woes in the midst of the biggest oil slump since 2009. Repsol sold stakes in development and exploratory acreage in northern Alaska to its partner, Armstrong Oil & Gas Inc., for more than $800 million, according to a statement from Armstrong. The companies will defer the 2015-2016 drilling campaign initially scheduled to start this winter as part of the restructuring. As many as 500 workers on the state’s North Shore could lose their jobs in the restructuring, according to Anchorage, Alaska-based KTUU television station , citing comments from Repsol spokeswoman Jan Sieving. The restructuring comes a month after ConocoPhillips announced it would cut about 10 percent of its workforce, including 120 jobs in Alaska. The state has been hit hard by crude prices falling more than 50 percent from last year’s peak amid a global glut. […]

Posted On : Published By : Tom Whipple
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Industry praises Shell’s arctic safety record

Shell praised by industry peers for safe 2015 campaign in the arctic waters off the coast of Alaska. Photo courtesy of the Bureau of Safety and Environmental Enforcement WASHINGTON, Sept. 29 (UPI) — Despite disappointing results for Shell in arctic Alaskan waters, industry leaders say the $7 billion campaign was a success in terms of safe operations. Royal Dutch Shell said it was dismantling its exploratory operations in the arctic Chukchi Sea after drilling uncovered no commercial prospects of oil and natural gas. Environmental activists praised the end to a campaign they viewed as risky, with Greenpeace calling for a moratorium in future arctic programs. Marvin Odum, director of Shell’s exploration and production division in North America, said this year’s program was safe in every aspect of operations. "Contrary to the previous rhetoric of anti-development activists, the 2015 Chukchi Sea exploration season provides further evidence that drilling can be […]

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Shell Exits Arctic as Oil Slump Forces Industry to Retrench

Photo Shell had some mishaps in Alaska, such as when its floating drill rig Kulluk, center, ran aground in 2012. Credit James Brooks/Kodiak Daily Mirror, via Associated Press Royal Dutch Shell ended its expensive and fruitless nine-year effort to explore for oil in the Alaskan Arctic on Monday in another sign that the entire industry is trimming its ambitions in the wake of collapsing oil prices. The decision came after one well drilled by Shell this summer came up mostly dry, and environmental groups declared a major victory. But at a time when global markets are glutted with oil, it also confirmed the major oil companies’ increasing willingness to turn their backs on the most expensive new drilling prospects in the Gulf of Mexico and suspended plans for new projects in Canada’s oil sands . Shell spent more than $7 billion on its Alaska venture. The industry has cut […]

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Shell’s Arctic Withdrawal Adds to Cold Spell for Alaskan Crude

Alaska, once the workhorse of the U.S. oil industry, is being put out to pasture. Royal Dutch Shell Plc’s decision to end its $7 billion search for oil in the Arctic Ocean off the coast of Alaska is the latest bit of bad news for a state that went from producing one in every four barrels in the U.S. to an afterthought during the shale boom. “Alaska used to be the No. 1 oil producer in the U.S.,” said Carl Larry, head of oil and gas for Frost & Sullivan LP in Houston. “Now there are a lot easier places and better ways to find and produce oil.” Alaskan oil production topped out in 1988 at more than 2 million barrels a day. It’s declined steadily since then, falling below 500,000 last year for the first time since the late 1970s, according to the Energy Information Administration. Aging reservoirs […]

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Shell’s Alaska Exit Means Arctic Oil Reserves Remain Locked Away

The inglorious end to Royal Dutch Shell Plc’s $7 billion search for oil in Alaska means billions of barrels of crude will probably remain locked away in Arctic waters from the U.S. to Russia — at least as long as prices remain near $50 a barrel. Shell abandoned exploration off Alaska for the “foreseeable future” on Monday after it failed to find meaningful quantities of oil or natural gas. In Russia, sanctions over Ukraine have halted partnerships aimed at exploring offshore in the Arctic, while exploration in Greenland has been on hold since 2012 and activity in Norway is slowing. “This effectively ends exploration for new Arctic oil until prices recover,” Ahmed Ben Salem, a Paris-based analyst with Oddo & Cie, said by phone. “Shell was the only company with a strong enough balance sheet that was currently exploring in the Arctic.” In a world where OPEC members control […]

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Sanctions, Oil Slump Delay Russian Offshore Drilling 2-3 Years

Russia’s state-run energy giants Rosneft OJSC and Gazprom PJSC are delaying some offshore drilling by two to three years because of sanctions and weaker oil prices, according to the country’s Ministry of Natural Resources. The nation will drill two offshore wells in 2017, down from an original plan for 14, Denis Khramov, deputy minister, said Tuesday at a conference in Russia’s Far East. The delay means 28 wells will be drilled in 2019 instead of 19, he said U.S. and European Union sanctions prompted by Russia’s role in the Ukraine crisis have cut access to offshore-drilling technology and equipment, Khramov said. Russia’s efforts to tap its offshore resources, which are estimated at 14 billion to 15 billion metric tons of oil equivalent, are lagging other countries, Khramov said. Russia drilled 11 subsea wells last year, compared with 57 in Norway, he said. The ministry this year approved drilling delays […]

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Shell abandons contentious Arctic exploration after poor results

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Shell to Cease Oil Exploration in Alaskan Arctic After Disappointing Drilling Season

The oil and gas company pressed ahead with its multibillion-dollar exploration program offshore Alaska this summer despite tumbling oil prices and strident opposition from environmental groups concerned that drilling in the region could cause an ecological disaster. The Arctic—one of the few remaining unexplored oil frontiers—was a prize too great to simply walk away from, but the company has changed its mind after the Burger J well it drilled in the Chukchi Sea this summer only showed traces of oil and gas. “This is a clearly disappointing exploration outcome for this part of the basin,” said Marvin Odum, Shell’s upstream head in the Americas. And though in the longer term, Shell sees important exploration potential in the basin, it said it would cease further exploration offshore Alaska for the foreseeable future. The Anglo-Dutch company expects to book charges in its accounts as a result of this decision, and will […]

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Shell Halts Alaska Oil Drilling After Disappointing Well Result

Royal Dutch Shell Plc will stop exploring offshore Alaska, citing high costs and “challenging” regulation, six weeks after it got approval to fully drill a well in the Arctic waters off the U.S. state. Shell forecast it will take related financial charges, according to a company statement on Monday. The balance sheet carrying value of its Alaska position is about $3 billion, with additional future contractual commitments of about $1.1 billion, The Hague, Netherlands-based energy explorer said. Shell is abandoning exploration after winning approval in August to drill the Burger J well in Alaska’s Chukchi Sea. Success would have brought the company back to an area it left three years ago after a rig ran aground. That incident helped prompt the Obama administration to revisit U.S. rules for exploration in the region, while environmental groups have long-protested Shell’s plans, saying a spill could cause an ecological disaster. Indications of […]

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IEA sees high risk in arctic oil

Shell has permit to start drilling into oil-bearing zones in the Burger prospect off the Alaskan coast, described once as one of the bright spots in North America. IEA says risks are too great at the moment. Photo courtesy of the Bureau of Safety and Environmental Enforcement. LONDON, Sept. 18 (UPI) — The incoming executive director of the International Energy Agency said drilling for oil in arctic waters may be geologically and economically prohibitive. "I believe that arctic oil is not for today, and not for tomorrow — maybe for the day after tomorrow," Fatih Birol told The Guardian newspaper in London. "It’s geologically difficult, technologically difficult, lots of environmental challenges, and the cost of production is very, very high, especially if you look at the current oil price levels." The U.S. Bureau of Safety and Environmental Enforcement in August awarded Shell with one permit to start drilling an […]

Posted On : Published By : Tom Whipple