Shell: Kulluk in tow, moving toward destination off Kodiak Island


Shell: Kulluk in tow, moving toward destination off Kodiak Island


ANCHORAGE -- Royal Dutch Shell's Kulluk oil rig was successfully pulled off the Alaskan island where it was grounded for a week, and was moving slowly toward Kiliuda Bay, off Kodiak Island, where damage to the rig can be more fully assessed.

The Kulluk was in tow and moving at 3.8 knots, or 4.3 mph. Crews said there were no initial signs that oil from the rig had been discharged into the ocean, and checks of the rig's fuel tanks since Kulluk was brought afloat showed no signs of leakage, according to a press release Monday morning.

Shell's Kulluk oil rig crashed into the uninhabited Sitkalidak Island off Alaska's southern coast late Dec. 31 after stormy seas pried it loose from tug boats that had been pulling it to Seattle for maintenance. The Kulluk had been drilling exploratory wells in Arctic waters as part of Shell's $5 billion bid to resuscitate offshore oil production in waters that haven't seen such activity for two decades.

Heavy rains, high waves and brutal winds blocked efforts on Sunday to move the Kulluk about 30 miles, to Kiliuda Bay off Kodiak Island, where damage to the rig can be more fully assessed. The National Weather Service on Sunday morning issued a gale warning for the northern Bay of Alaska through Monday, with forecasts of winds reaching 45 knots and waves cresting as high as 25 feet. High winds and waves will continue through Thursday, according to the National Weather Service.

Salvage crews took incremental steps Sunday to remove the rig from the island. Crews attached the tow line to the Kulluk by 4 p.m. local time Sunday and were waiting for an opportune time to move the rig to port, Shell said. Several hours later, at 10:10 p.m. local time, the rig was refloated from its position on the Island but the response team was assessing the vessel and making sure it could be transported safely.

More than 730 people, a dozen ships and a handful of helicopters are trickling in to help remove the Kulluk. The rig is being pulled by the Aviq, with three additional tugs on standby along with the Coast Guard Cutter Alex Haley and two oil spill response vessels, according to a unified command update late Sunday night. Boom--an absorbent material used in oil cleanup efforts--was being deployed around Kodiak Island to ensure any spilled fuel wouldn't reach nearby salmon fisheries.

Shell said the Kulluk is in stable condition, with no evidence of any of the 150,000 gallons of diesel and lubricants it carries leaking. Water entering parts of the rig has caused damage, including to its generators.

Depending on how long it takes to repair or replace the Kulluk, Shell may not have the necessary number of rigs ready to meet its U.S. permit requirements by the summer restart of Arctic drilling season. Shell paid $2 billion for leases to drill in the region, but has only managed to start two exploratory wells.

The grounding has raised the hackles of politicians and environmentalists, who have warned that the extreme weather offshore Alaska makes equipment problems--and hazardous fuel leaks--more likely to occur. The region's relative remoteness also means that cleanup efforts take longer to coordinate.

The National Resource Defense Council and other environmental groups as well as numerous U.S. lawmakers are citing the Kulluk accident in efforts to pressure the White House to suspend Arctic drilling permits.

Shell's Arctic drilling program has been beset with mishaps from the start.

Lingering ice prevented the company from dispatching its two rigs to the region for months. Once in Alaska, one rig used by Shell--Noble Corp.'s Discoverer --nearly ran aground in July after becoming unmoored while in port. Equipment failures on the rigs have also been a problem.

ConocoPhillips and other oil explorers are carefully following Shell's experience as they consider whether or not to test the frigid waters north of Alaska to extract the estimated 550 MMbbl oil estimated in the area.

The Kulluk accident gives Shell a chance to show that while problems may occur, they can also be resolved without major incident, said Lysle Brinker, an analyst at energy consulting firm IHS.

"If they can successfully get this rig off the rocks without too much more incident, it will be a plus to show that they can deal with this sort of problem," Mr. Brinker said. "But if there's a large leak, it'll make things worse."

Dow Jones Newswires

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