Shell drilling rig accident in Alaska could jeopardize future Arctic oil projects
1/2/2013 12:00:00 AM
Royal Dutch Shell might not see any short-term impact from its Kulluk rig running aground off of Alaska, but the accident could cut confidence in oil production in the Great White North.
The company said it would invest $5bn to explore for oil and gas in the Arctic, but extreme weather has riddled the project with accidents and missed schedules and could raise the hackles of environmentalists.
That in turn might hurt Noble Corp. and others seeking to expand exploration in the region.
"The worse the accident proves to be, the more likely Shell's Alaskan drilling plans could be compromised, jeopardizing future Alaskan work for Noble's Discoverer drillship," says Wells Fargo.
Earlier this week, Shell suffered a setback in its closely watched attempt to drill for oil in US Arctic waters when the offshore rig it had used ran aground late Monday after breaking free from tow ships in high seas.
The Kulluk, a drilling rig owned by Noble, struck Sitkalidak Island, an uninhabited area about 300 miles southwest of Anchorage, according to a joint statement by the US Coast Guard, Noble, Shell and state officials, who were coordinating response to the accident.
Environmental groups are already planning to ask the Obama administration for a suspension on permitting in the Arctic region.
Dow Jones Newswires
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