Shell drilling company guilty of environmental and maritime crimes in Alaska’s Arctic
ANCHORAGE, Alaska — Dec 19, 2014, 3:28 PM ET: By DAN JOLING Associated Press
A drilling company has pleaded guilty to committing environmental and maritime crimes in Alaska’s Arctic.
Bernie G. Wolford Jr., president of Noble Drilling U.S. LLC, appeared in federal court in Anchorage on Friday after reaching an agreement with prosecutors earlier this month.
Wolford said the $8.2 million fine and $4 million in community service payments would be paid Friday. He declined to comment further after the hearing.
Noble operated the drill ship Noble Discoverer and the drill unit Kulluk in support of Royal Dutch Shell PLC’s offshore drilling efforts in 2012.
According to the agreement, Noble Drilling’s violations included keeping false records or failing to record details surrounding its handling of oil on the vessels. The company also failed to notify the U.S. Coast Guard of hazardous conditions aboard the Noble Discoverer.
RELATED: Shell may abandon Arctic drilling indefinitely
Why Shell Is Facing Problems In The Arctic
By: MICHEAL KAUFMAN
Published: Dec 19, 2014 at 11:21 am EST
Published: Dec 19, 2014 at 11:21 am EST
Royal Dutch Shell Plc. (ADR) (NYSE:RDS.A) is uncertain over its plans to drill in the US Arctic. The final decision regarding the company is expected to come in March, 2015. During this time the company is likely to consider various factors before taking a decision.
How crude oil prices have moved in the last six months seems will be a factor in any decision taken by management. Oil exploration and production (E&P) activities have fallen globally because of the dip in prices.
West Texas Intermediate (WTI), the US benchmark for crude oil was trading at $54.59 per barrel today, while Brent crude, the global benchmark is still below $60 per barrel mark at $59.93. However according to sources these global market fundamentals are considered a minor factor affecting the future outlook of the company in the Arctic. Arctic drilling is usually a long-term endeavor and prices are expected to stabilize over time.
What concerns the company most according to Platts McGraw Hill Financial is the outcome of potential lawsuits over environmental damage.
Shell had originally acquired leases to explore for oil in the Chukchi and Beauford seas in Alaska after receiving approval from the US Bureau of Safety and Environmental Enforcement (BSEE) and had decided to sue environmentalists in order to avoid facing any legal challenges in the future. The BSEE has also been sued for giving the approvals.
Studies by the US Bureau of Ocean Energy Management (BOEM) are currently also underway in order to assess the degree to which the environment might be affected as a result of Shell’s activities in the Arctic. The studies are expected to reveal that Shell’s operations increase the probability of oil spills.
Another issue that the company faces that is the time that the BSEE is taking to come to a decision on whether to allow an extension of five years for Shell’s leases in Arctic waters. Vice President of Shell Peter Slaiby said that BSEE’s approval was vital to Shell before deciding to increase investmentin the region. Currently Shell has spent around $6 billion and has more exposure to the region compared to any other company.
The leases that Shell owns in the Chukchi Sea are set to expire in 2020 while the leases in the Beufort sea are set to expire in 2017. If the approvals come in late then it is less likely for Shell to go ahead with its plans.
Chevron Corporation (NYSE:CVX) has decided to indefinitely suspend its program for operations in the Beufort sea. Its decision came due to the strict regulatory requirements to undertake operations there. Drilling programs recently were also put on hold by ConocoPhillips (NYSE:COP) and Statoil ASA (ADR) (NYSE:STO).
Exxon Mobil Corporation (NYSE:XOM) along with its subsidiary Imperial Oil Limited (USA) (NYSEMKT: IMO) and BP plc. ADR (NYSE:BP) however are undertaking plans to meet the regulatory requirements. Their first well is expected to be drilled in 2020.
Shell itself is to be blamed for much of the problems in the Arctic. A spokesperson for Alaska Wilderness League said, “Given the mishaps by Shell in 2012, Shell’s competency is a major factor in what happens in 2015.”
The stock price for Shell was up about 2%% at $67.92 as of 11:05 am EST.
Shell may abandon Arctic drilling indefinitely
By John Donovan
Royal Dutch Shell is expected to announce by March if it will go forward with plans to drill for oil in Arctic waters offshore Alaska in 2015, a decision which may have more to do with the outcome of court cases and U.S. government reviews than global market fundamentals.
Shell’s decision is widely seen as a potential turning point for the company’s long-range Arctic plans, with billions already spent and rival companies putting their own Arctic drilling plans on hold; if Shell does not pursue drilling off north Alaska in 2015, it may abandon the region indefinitely.
Chevron says it is canceling plans to drill for oil in the Beaufort Sea in Canada’s Arctic because of economic uncertainty in the industry as oil prices fall. In a letter to Canada’s National Energy Board, CVX said it withdrew from a hearing into Arctic drilling rules because it is delaying indefinitely any plans to drill in the EL 481 block. ConocoPhillips and Statoil have both put an indefinite hold on their own Arctic drilling plans.
The above information is extracted from these Seeking Alpha articles
Shell – leveraging the climate debate
Four of these experts were from Shell, a prominent member of history’s top 90 polluters. Shell was also paying the costs. Its logo was everywhere, cuddling alongside National Geographic’s. The event was hijacked by Shell…
Extracts from an article by Assaad W. Razzouk published by The Ecologist
The annual UN Climate Talks ended on Sunday in Lima, Peru. In case you were wondering, nothing happened.
In Lima, Shell’s top climate advisor was comfortable enough to admit that Shell enjoys its relationship with the notorious American Legislative Exchange Council (ALEC), a shadowy shop specialised in aggressive efforts to counteract emissions reductions and regulations.
This is the same ALEC which, in the words of Google executive chairman Eric Schmidt, is “literally lying” about climate science.
Big Oil is fighting a broader battle, trying to influence public opinion and governments at a national and community level.
I experienced their tactics far away from Lima last week, when I had the displeasure of attending National Geographic’s ‘Big Energy Question’ round table event in New Delhi, India. This invitation-only forum convened 40 experts on air pollution in India, to examine its causes, its impacts on the environment and health, and possible solutions.
Four of these experts were from Shell, a prominent member of history’s top 90 polluters. Shell was also paying the costs. Its logo was everywhere, cuddling alongside National Geographic’s.
Well, the predictable happened: The event was hijacked by Shell, ensuring that the Government of India didn’t hear of any solutions which did not prominently feature oil and gas.
Why Shell Is Selling Its Norwegian Downstream Business
Royal Dutch Shell has decided to sell off of its Norwegian downstream business to Finland’s ST1 in order to improve profitability and achieve its divestment targets
By: MICHEAL KAUFMAN
Published: Dec 18, 2014 at 5:21 pm EST
Published: Dec 18, 2014 at 5:21 pm EST
Royal Dutch Shell plc. (ADR) (NYSE:RDS.A) has decided to sell its Norwegian downstream business comprising commercial fuels, retail and logistics businesses. The company is planning to sell the stake to ST1, a fuel company in Finland. No further details have been disclosed so far.
A Retail Brand License Agreement is also expected to be part of the deal. This particular agreement would make sure that the Shell brand remains highly visible in the Norwegian market through a distributor. The deal is yet to be approved by regulatory authorities and is expected to be confirmed next year. Shell will also run its Norwegian aviation business in a 50-50 joint venture with with ST1, which already operates Shell pumps in Sweden and in Finland.
Crude oil prices have fallen 45% since June and even though Shell has been experiencing lower cost of production in its downstream business segment it has been cutting back on its operations.
The main reason is to focus more on the upstream sector and reduce its concentration on the downstream sector. This is apparent from the strategy that the company has adopted recently, like the divestment of its downstream assets including refineries in Australia, France, Germany and the UK.
The strategy has seem to work for Shell and it was able to increase its overall adjusted net income to $5.84 billion in the third quarter of fiscal year 2014 (3QFY14, ending September 2014) compared to the net income of $4.73 billion last year. Net income for the upstream business segment was $3.94 billion compared to $0.9 billion last year. The downstream segment’s income fell to $1.6 billion compared to $3.2 billion income in the same quarter last year. The company wants to divest assets worth $15 billion by the end of the next year
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