After six years of back-and-forth with the U.S. government, Royal Dutch Shell PLC (NYSE: RDS-A) (NYSE: RDS-B) yesterday began drilling a well offshore of Alaska in the Chukchi Sea, and the company will begin preparing to drill another well in the Beaufort Sea, offshore of the state's North Slope. Final permission for the drilling was granted late last month by the U.S. Department of the Interior.
According to the company's website, the latest estimate from the U.S. government indicates that up to 27 billion barrels of crude oil lie under the sea floor along Alaska's outer continental shelf. Another 132 trillion cubic feet of natural gas are also believed to be present.
The last delay in Shell's planned start to drilling came when the Deepwater Horizon exploded in April 2010 in the Gulf of Mexico, killing 11 workers and dumping 5 million barrels of crude into the Gulf. BP PLC (NYSE: BP) leased the rig from Transocean Ltd. (NYSE: RIG).
Ironically perhaps, the planet's warming temperature, which is largely attributable to burning fossil fuels, has reduced the amount of sea ice in the Arctic and made drilling offshore of Alaska a somewhat less-harrowing prospect. Similar projects could get underway off the north coast of Russia in the near future as well.
Filed under: 24/7 Wall St. Wire, Oil & Gas Tagged: BP, RDS-A, RDS-B, RIG