Exploration

Shell‘s Beaufort and Chukchi Sea Plans of Exploration include drilling multiple wells in both basins; up to four wells over two years in the Beaufort Sea and up to six wells over two years in the Chukchi Sea. These programs will be executed using up to two drill ships, one potentially in each sea; allowing Shell to begin exploring its Alaska prospects in parallel after five years of delay.

Shell plans to employ world-class technology and experience to ensure a safe, environmentally responsible Arctic exploration program – one that has the smallest possible footprint on the environment and no negative impact on North Slope or Northwest Arctic traditional subsistence hunting activities.  We look forward to drilling in 2012 and validating what we believe is a valuable national resource base.

Shell stands ready to deploy the most robust Arctic oil spill response system known to the industry, and, in accordance with the BOEMRE’s requirements, Shell has shown that our oil spill response capability meets or exceeds worst-case discharge volume for our proposed wells.

Additionally, Shell remains committed to fabricating an oil spill capping system, which is designed to capture hydrocarbons at the source in the extremely unlikely event of a shallow water blowout.  The capping system will remain staged in Alaska to allow for rapid deployment.

Overview of Drilling Programs

• Two Exploration Plans (EP) – Camden Bay EP in the Beaufort Sea and a Chukchi Sea EP 
• Both are two year plans – starting in 2012 
• Up to 2 wells per year in the Beaufort Sea 
• Up to 3 wells per year in the Chukchi Sea, plus future well site work 
• Noble Discoverer drillship and Conical Drilling Unit Kulluk  
• Oil Spill Response capabilities on standby 24/7  
• Arctic capping and containment system  
• Crew change by helicopter – routes determined through coordination and communication 
• Real time ice and weather forecasting  
• Shorebase in Deadhorse, Barrow and Wainwright  
• Robust marine mammal monitoring protocol 
• Communications Plan to avoid conflicts with subsistence users 
• Subsistence Advisors and Marine Mammal Observers

The exploration vessel Gilavar performing seismic work.

Beginning almost 50 years ago, we operated continuously in Alaska until 1998.  Shell was one of the most prominent explorers in all of the frontier basins of Alaska, as well as being an operator and major producer in Cook Inlet.  We are responsible for safely drilling many of the wells in the Beaufort and Chukchi Seas in the 1980s and 1990s.

In 2006, we once again began working in Alaska when we acquired the first ever 3D seismic in the Beaufort and Chukchi Seas. In 2007, we performed limited site survey work and seismic activities in the Beaufort Sea.

During 2008, we made history by spending $2.1 billion on leases in the Chukchi and promptly went to work evaluating those leases.  We completed the most successful 3D seismic campaign we have ever experienced in Alaska with over one thousand miles of data collected.  In addition, we had a very successful year of scientific research.

Through a combination of acoustic recorders, aerial overflights, vessel observations and tagging programs, Shell continues to acquire first-of-a-kind data in the Beaufort and Chukchi Seas as well as help to fill the gaps in historical data.  We have spent tens-of-millions on these science programs since 2006.

Due to litigations, we did not pursue a drilling program in 2009 and significantly decreased our other programs.  Sadly, this also meant we did not enter into contracts with Alaska businesses that could help deliver the results nor filled the positions to support those activities.

In 2009, Shell did no 3D seismic work in the Beaufort or Chukchi Seas.  Following a very successful 2008 season, Shell did not acquire shallow hazard data in the Beaufort Sea during the 2009 Open Water Season. We were unable to complete priority work in 2008 in the Chukchi Sea, therefore Shell returned to the area in 2009.

In 2010, Shell planned to drill in both Camden Bay in the Beaufort Sea and the Chukchi Sea. By April of 2010, most of our major permits were in hand and several vessels were already in Alaskan waters or preparing to transit.  Once again, our Exploration Plans were challenged in court.  This time, however, those plans prevailed.  The U.S. 9th Circuit Court of Appeals reaffirmed the regulatory analysis done on our Beaufort and Chukchi permits and rejected claims that not enough work had been done to evaluate the risks and the challenges related to our plans. 

As a result of the tragic Deepwater Horizon incident in the Gulf of Mexico, President Obama made the decision in May 2010 to suspend Arctic drilling.  Despite the suspension of Arctic drilling, Shell was able to complete the planned baseline science programs in both the Chukchi and Beaufort Seas.

Exploration Drilling

Drilling is the only sure way to confirm the presence of oil and gas.  In addition, this process is used to evaluate the potential of the reservoir and help to determine if it is economically viable to move into the production phase.

An exploration well does not guarantee a production site.  Once the well is drilled, recording devices are lowered into the well to evaluate the rock and fluid properties.  The results include fluid types (water, oil or natural gas), rock porosity and thickness of the rock layers.  This information is used to help make future decisions about drilling operations.

Seismic survey, the best method of indirect exploration, enables explorers to see through solid matter in the same way an ultrasound can see a baby inside its mother.  The process works by sending sound waves into the seafloor and measuring how long it takes for the rocks underneath to reflect the waves back to the surface.  That time period can indicate the varying characteristics of the rocks beneath.

3D seismic uses similar technology but multiple lines of equipment placed in a grid to record the signals.  Sophisticated computer software can then translate those signals into a picture revealing the thickness and densities of the sub-surface rocks.

Shallow Hazards is another tool used during the exploration process.  These surveys help to identify potential hazards to vessels or seafloor conditions that may be unsafe for the placement of exploration drilling wells and rigs.  For example, the surveys can show underwater peaks and valleys or man-made dangers like shipwrecks.