Shell’s Rig Starts Preparatory Drilling off Alaska North Coast

Royal Dutch Shell Plc said its Noble Discoverer rig started drilling in the Chukchi Sea off the north coast of Alaska, beginning preparations to become the first company to drill for oil in the U.S. Arctic in decades.

The company has been given permission by the U.S. Interior Department to perform preparatory work as it awaits a final permit to drill for oil.

Shell said it started drilling at 8:30 a.m. New York time.

“Today marks the culmination of Shell’s six-year effort to explore for potentially significant oil and gas reserves, which are believed to lie under Alaska’s Outer Continental Shelf,” Kelly op de Weegh, a Houston-based spokeswoman for the company, said in a statement.

She said it was the first time a drill has touched the U.S. Chukchi sea floor in more than two decades.

The U.S. Interior Department on Aug. 30 said it would allow the company to start drilling to a maximum depth of 1,400 feet under the seabed, above the level of oil fields. It won’t be allowed to drill deeper because one of its oil spill response vessels isn’t ready.

Shell has invested $4.5 billion on the offshore leases and equipment and fought at least 50 lawsuits from environmental groups, opposing the first wells in the Arctic waters in about 20 years.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE