Page 9 - NorthAmOil Week 38

NorthAmOil COMMENTARY NorthAmOil

Shell renews interest in Alaska

Royal Dutch Shell has proposed exploring for oil and gas in state waters offshore

Alaska, around five years after it abandoned its last attempt at exploration off

the state’s coast

ALASKA ROYAL Dutch Shell has filed plans to start oil partner to share the costs and risks of the West
and gas exploration in state waters offshore Harrison Bay project. The company added, how-
WHAT: Alaska. The proposals, put forward during a ever, that the economic shutdown resulting from
Shell is seeking to begin a challenging year when many in the industry are the coronavirus (COVID-19) pandemic, as well
new exploration project in staying away from new offshore drilling, would as the collapse in oil prices earlier this year, had
state waters off Alaska. mark a return to Arctic waters for Shell after a had an impact on its ability to bring in such a
high-profile exit in 2015. The super-major aban- partner.
WHY: doned exploration in federal waters off Alaska Shell noted that meetings and negotiations
The proposal involves that year following a series of mishaps during had to be conducted virtually, slowing the pro-
a different region from drilling. cess, and that oil prices had reduced the appetite
Shell’s last, ill-fated for participating in new, higher-risk projects. As
exploration attempt in New proposal a result, Shell is requesting that the initial plan for
Arctic waters. The latest proposals involve a different offshore West Harrison Bay be approved for a period of
region, in shallower waters with less severe ice five years, in order to give it more time to secure
WHAT NEXT: conditions, which would be less challenging to a partner. The super-major also aims to use this
A handful of onshore explore. The work would be carried out in West time to gather additional information on the
projects are also Harrison Bay, which is located offshore the hydrocarbon potential of the West Harrison Bay
progressing in Alaska, National Petroleum Reserve-Alaska (NPR-A). leases, evaluate the economic issues around any
illustrating that the Shell is proposing to form an exploration unit future development and prepare a comprehen-
state’s oil and gas has covering 86,400 acres (350 square km) and 18 sive development plan based on the results of
ongoing appeal. Alaska Beaufort Sea state offshore leases that it appraisal drilling and testing over the explora-
holds, known as the West Harrison Bay Unit. tion period.
The company said it had identified several
prospects within these leases that it believes Learning from the past
could hold oil and gas accumulations. It is pro- Shell will be keen to avoid the sort of mishaps that
posing to update seismic and geological data in marred its last exploration campaign in Alaskan
2022 and 2023, followed by exploration drilling waters. And indeed, the new plan appears to be
that would be conducted in 2024 and 2025. significantly lower-risk, with Shell continuing to
In a document submitted to the Alaska stay away from particularly challenging frontier
Department of Natural Resources (DNR), Shell exploration projects.
said it had been working “diligently” to find a The super-major spent around $7bn on its

Week 38 24•September•2020 www. NEWSBASE .com P9