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UPDATE 1-U.S. says Shell is not yet allowed to drill in Arctic oil zone

Published 2015-07-22, 05:07 p/m
© Reuters. UPDATE 1-U.S. says Shell is not yet allowed to drill in Arctic oil zone
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(Adds quotes from Interior Department, details)
WASHINGTON, July 22 (Reuters) - The U.S. Interior Department
on Wednesday granted Royal Dutch Shell RDSa.L its final two
permits to explore for oil in the Arctic this summer, but said
the company cannot drill into the oil zone until the required
emergency equipment arrives to the region.
The department's Bureau of Safety and Environmental
Enforcement (BSEE) conditionally granted Shell permits for oil
exploration in the Chukchi Sea off Alaska.
But Shell must have emergency equipment to contain a
potential blown out well deployable within 24 hours before
drilling into the oil zone, the office said. Shell discovered
weeks ago that the Fennica icebreaker that holds the required
equipment, called a capping stack, had a three foot (1 meter)
gash in it.
"Without the required well control system in place, Shell
will not be allowed to drill into oil-bearing zones," BSEE
Director Brian Salemo said.
Shell last week sent the Fennica, which it is leasing, to
Portland, Oregon, for repairs. ID:nL2N0ZT260 Fixing the gash
and sending it back could take weeks.
The company said then it did not expect to require the
capping stack until August and that it could proceed with
preliminary drilling. Shell did not immediately return a request
for comment on Wednesday.
Environmentalists have criticized Shell's drilling plans in
the Arctic, which is home to sensitive populations of whales,
walrus and polar bears.

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