Shell halts Arctic drilling after one day

LONDON Tue Sep 11, 2012 8:15am BST

A Shell logo is seen at a petrol station in Ankara March 6, 2012. REUTERS/Umit Bektas

A Shell logo is seen at a petrol station in Ankara March 6, 2012.

Credit: Reuters/Umit Bektas

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LONDON (Reuters) - Royal Dutch Shell (RDSa.L) halted oil drilling in the Chukchi Sea in the Arctic on Monday just one day after starting as sea ice encroached on its drill ship, the company said in a statement.

"As a precautionary measure ... Shell has made the decision to temporarily move off the Burger-A well to avoid potentially encroaching sea ice," it said.

"Once the ice moves on, the Noble Discoverer (drilling ship) will re-connect to anchors and continue drilling."

Shell won a temporary permit to operate its drilling rig offshore Alaska just days ago. It has spent about $4.5 billion on its effort to drill Arctic oil, but has run into regulatory problems.

On Thursday the Department of the Interior allowed Shell to begin some "limited" drilling in the offshore Chukchi region, that is only navigable for a few months a year.

The company is still waiting for its oil-spill containment barge, the Arctic Challenger, to be approved by the Coast Guard. Without the containment system, the Department of the Interior said it would not allow Shell to proceed.

In light of the delays, Shell has asked the government to extend its oil drilling season beyond the September 24 deadline. (Reporting by Andrew Callus; Editing by Mark Potter)

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