Anglo-Dutch supermajor Shell has been granted a long-awaited federal air-quality permit the company needs to conduct exploratory drilling this year in Alaska’s Beaufort Sea, government officials said.
As earlier reported by Upstream, the US Environmental Protection Agency (EPA) issued the permit to Shell to cover air pollutants emitted from the drill ship and fleet of support vessels that the company plans to use to drill two exploratory wells on leases 16 to 22 miles (26 to 35 Kilometres) off Alaska’s northern coast.
The Beaufort Sea permit – which Shell has been seeking for nearly four years – was granted a week after the EPA issued a similar permit for the company’s planned drilling operations this year in the Chukchi Sea off Alaska’s north-western cost, according to a Reuters report.
The permit requires Shell to use technological advances, ultra-low-sulfur diesel fuel and to commit to other protective measures, EPA officials said in a statement.
“This permit ensures that exploration and drilling will occur in a way that protects air quality,” Rick Albright, director of the air, waste and toxics issues for EPA’s Seattle regional office, said in a statement.
The Beaufort permit is an important milestone, a Shell spokesman in Anchorage said, noting the company had already spent $84 million on its Beaufort Sea leases to drill the Sivulliq and Torpedo prospects.
“The issuance of our final Beaufort Sea air permit means we can continue to advance our exploration program with the ultimate goal of drilling in the Chukchi and Beaufort Seas in 2010,” Shell spokesman Curtis Smith said.
The permit is subject to a public review period and could be appealed by critics.
Shell is seeking to use a single drill ship and a fleet of icebreakers, oil spill response ships and other support vessels to explore the Chukchi and Beaufort prospects. Drilling is planned for the northern summer and fall to avoid sea ice is absent.
The company plans to drill up to three wells about 75 miles offshore in the Chukchi Sea, where it spent $2.1 billion in 2008 to acquire leases, and two wells in the Beaufort Sea.
Environmentalists and the native Inupiat Eskimo people of the region expressed concerns, as the permit was being drafted by the EPA, about carbon-dioxide emissions into a region already strongly affected by climate change, and the potential impact of pollutants on people who hunt and fish in the region for traditional foods.
Other permits are required before Shell is authorized to drill at either site, but those permits are considered smaller in scope than the air quality permits.
‘Majors line up for ONGC’s KG block’
Supermajors ExxonMobil and BP have expressed interest in farming in to Block KG-DWN-98/2 owned and operated by India’s state player Oil & Natural Gas Corporation (ONGC).
The offshore block contains a cluster of oil and gas discoveries including G-4-6, GS-29-1 and G-4-5.
These discoveries hold estimated reserves of around 5 trillion cubic feet of gas and 150 million tonnes of oil, according to a report on the Hindu Business Line.
ONGC has set up a data room for oil and gas companies in Chennai to review the block on receiving several requests.
BG and Eni are among those keen in acquiring an interest in the asset, the report said.
ONGC has returned to the market to source for farm-in partners after Norwegian Statoil and Brazil’s Petrobras reportedly backed out of the offshore block.
Statoil and Petrobras signed farm-in agreements for 10% and 15% stakes in the KG block respectively in 2007, but a joint operating agreement never came into force.
The deal with Petrobras will officially expire in July, the Hindu Business Line reported citing an unidentified ONGC official.