Shell wins approval to drill for oil in Alaskan Arctic waters

BRIAN WINGFIELD

WASHINGTON (Bloomberg) -- Royal Dutch Shell won permission to fully drill a well for oil in the Arctic waters off Alaska for the first time in three years.

The U.S. Interior Department’s Bureau of Safety and Environmental Enforcement granted the permit for the Burger J well in the Chukchi Sea, while limiting drilling at the nearby Burger V site, according to a statement on Monday. Because of a requirement that active rigs have at least 15 miles of space between them, the company can drill only the top section of Burger V.

Shell halted Arctic drilling in 2012 after a rig ran aground, helping prompt the Obama administration to revisit U.S. rules for exploration activities in the region. The producer, based in The Hague, may complete the well as early as this summer.

“It’s possible we will complete a well this summer but we’re not attaching a timeline to the number of feet drilled,” Shell spokesman Curtis Smith said by e-mail. “Safe, efficient operations will ultimately determine the progress we make.”

Shell won federal regulators’ approval to drill the top sections of the two wells on July 22, and the company began drilling at Burger J on July 30. The BSEE permit allows it to drill into the oil-baring zone only at Burger J.

Environmental groups have protested Shell’s drilling plans, saying that a spill may cause an ecological disaster in the Arctic.

“Not allowing Arctic Ocean oil drilling would have been the right technical decision,” Lois Epstein, Arctic program director for The Wilderness Society, said in a statement.

Shell is committed to operating in a safe, environmentally responsible manner, Smith said.

“Shell has spent years preparing to fully explore its leases in the Arctic offshore,” Senate Energy and Natural Resources Committee Chairman Lisa Murkowski, an Alaska Republican, said in a statement. She said offshore development would create jobs in the state and boost the oil supply for the trans-Alaska pipeline.