Shell cancels fall drilling operations

Royal Dutch Shell PLC says it no longer plans to try to drill deep enough to reach oil in exploratory wells off Alaska’s coast this year.

Shell says it is scaling back ambitions until next summer, after one of its containment systems failed during a test. The company says that in the time remaining this season it plans to drill shallow “top holes” for wells that may be further pursued in coming years.

The company was granted two exploratory drilling permits by the U.S. government after a long struggle with environmentalists who say seeking oil in the icy waters is too risky.

A several setbacks, including problems with a drilling safety system Shell Oil volunteered to put into place, are complicating the quest to reach oil-bearing rock during this season’s short open water season. Last week, the company was forced to delay drilling in the Chukchi Sea due to ice floe movements. And Royal Dutch Shell announced Monday that a containment dome being tested off the coast of Bellingham, Wash., was damaged Saturday night in its final test.

Time needed to repair the damage, as well as delays from ice and waiting for the Alaska Native whaling season to end, figured into the decision to cancel plans to complete exploratory wells this year in the Chukchi and Beaufort seas.

Shell Alaska spokesman Curtis Smith did not immediately have details as to how the dome was damaged.

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