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Shell rigs in Kodiak, Seward; Endeavour work lingers

Posted: January 17, 2013 - 10:01pm  |  Updated: January 18, 2013 - 9:30am

Shell’s drill vessel Kulluk is still in Kiliuda Bay Bay on Kodiak Island, where the vessel was taken after grounding on a small island in a storm on Dec. 31. Inspections of the vessel’s hull by underwater Remote Operating Vehicles and divers are complete and the results are being analyzed, according to Unified Command, the joint U.S. Coast Guard and Shell team managing the Kulluk grounding incident.

Meanwhile, Shell spokesman Curtis Smith said the Kulluk will not be moved from the bay until the tanner crab fishery, now under way in the area, has closed.

Fishing started Jan. 16 and is expected to take seven to 10 days for harvesters to catch the 660,000-pound tanner crab quota, according to sources in the crab fishing industry.

Meanwhile, the continued deployment at Kodiak of tugs and other vessels supporting the Kulluk means that Shell’s other drillship, the Noble Discoverer, will remain in harbor at Seward.

The Discoverer, a conventional drillship, was taken to Seward so that a U.S. Coast Guard investigation of apparent violations of pollution and safety rules could be done. The investigation is now complete, Coast Guard officials say, and the Discoverer is free to leave Seward at Shell’s discretion.

However, an engine vibration also developed on the Discoverer en route to Seward, so Shell plans to tow the drill ship from Seward to a Seattle shipyard to have the engine checked out as well as other winter maintenance performed.

To do the tow, the other vessels now assisting the Kulluk, are needed, Smith said.

There is still no information available on what, if any, serious damage the Kulluk suffered when it grounded. Its outer hull is 1.5-inch thick steel. There was, however, some damage to the vessel’s topside from waves in the grounding as well as some damage from water that seeped inside through a hatch, including damage to the electrical system.

Shell was having the Kulluk, a conical drill vessel built for Arctic drilling in ice towed from Dutch Harbor, an Aleutians port, to Seattle for winter maintenance when the storm hit and the vessel was grounded.

Shell refloated the Kulluk and moved it to Kiliuda Bay, a protected area about 30 miles away, on Jan. 7.

 

Buccaneer Energy is continuing work on the Endeavour jack-up rig now parked at Homer to prepare for U.S. Coast Guard and American Bureau of Shipping inspections, company spokesman Jay Morakis said.

A transition of drilling contractors has complicated things as well, and the delay in the work and the required approvals has prevented the rig being moved to its first exploration target, a natural gas prospect offshore Anchor Point, on the Kenai Peninsula.

Spartan Drilling Co., the new rig operations contractor, now has personnel on the Endeavour and is taking over operations from Archer Drilling, the former rig contractor. Spartan, based in Houston owns and operates the Blake 151 jack-up rig that is now parked for the winter at Port Graham. That rig has been drilling Cook Inlet exploration wells for another independent company, Furie Alaska Operating LLC.

Buccaneer, an Australia-based independent, and Archer are meanwhile in a legal dispute with Archer claiming it hasn’t been paid for work and Buccaneer claiming Archer did not do work on the rig it was supposed to do.

Spartan is close to signing its final operating agreement with Kenai Offshore Ventures, the owner of the drill rig, Morakis said.

Buccaneer and Ezion Holdings of Singapore are the main partners in Kenai Offshore Ventures with the state’s Alaska Industrial Development and Export Authority also owning an interest.

Some good news for Buccaneer is that the state Department of Natural Resources granted the company a land-use permit Dec. 27 for its exploration location at Cosmopolitan, the exploration prospect three miles off Anchor Point.

“The permit allows the Endeavour jack-up rig to be moved onto the Cosmo location and to jack its legs down to the sea floor,” Buccaneer said in a press release.

Other approvals are still needed for the well including a drilling permit from the Alaska Oil and Gas Conservation Commission. Cosmopolitan is a known oil and gas discovery with an oil reservoir at deeper levels and natural gas at shallower depths. Buccaneer’s plan is to first drill and test the gas prospect, and then drill deeper to test the oil reservoir.

Also, Buccaneer has been able to raise $19.2 million in additional financing for its exploration including $9.3 million from the sale of shares and $9.9 million in an unsecured loan. The company is listed on the Australian stock exchange. The company is also working on the refinancing of a secured $20 million loan that expires in January and a separate $30 million loan that expires next December.

In a lawsuit filed against Buccaneer and Kenai Offshore Ventures, Archer Drilling claimed Buccaneer had not properly funded the refurbishment of the Adriatic IX jack-up rig. The rig had been in “cold storage” in Malaysia for several years, meaning that it needed substantial refitting before being returned to service. It was renamed the Endeavour after the 2011 purchase.

Buccaneer then ordered the Endeavour to be moved to Cook Inlet to meet drilling commitments before the rig was ready, resulting in a substantial amount of work that needed to be done at Homer, a port lacking the resources to do the work efficiently, Archer said in its suit.

Buccaneer disputed Archer’s claims, saying Archer failed to live up to contractual responsibilities, resulting in a decision to terminate Archer’s contract. Archer said it terminated the contract with Buccaneer on Dec. 13.

 

 

 

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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