Lawmaker Questions Shell's Decision to Move Rig in Bad Weather
A key U.S. lawmaker is questioning whether Royal Dutch Shell (RDSA.LN, RDSB) took heed of forecasts for dangerous weather when it decided to move a drilling rig through the Gulf of Alaska, resulting in its breaking free from a tugboat and wedging itself on an island off Alaska.
Saying he is concerned that Shell might have had financial motives to push ahead despite signs of "severe weather," Rep. Ed Markey (D., Mass.), the top Democrat on the House Natural Resources Committee, is asking Shell to disclose which company officials made the decision to approve the rig's departure.
"Reports that financial considerations rather than safety may have factored into Shell's considerations, if true, are profoundly troubling," Markey said in a letter Thursday to Shell Oil Co. President Marvin Odum.
Shell spokesman Curtis Smith said "the models that informed our...departure date indicated a forecast that was within operational thresholds for the journey east."
Markey is the latest to question Shell's decision-making after a drilling rig known as the Kulluk separated from its tugboat in stormy conditions and ran aground on Sitkalidak Island. The rig has since been recovered and is now undergoing assessment in calmer waters in Kiliuda Bay.
The Kulluk departed Dec. 21 from Dutch Harbor in the Aleutian Islands, heading to Washington state after operating over the summer in the Beaufort Sea.
On Dec. 24, three days before the Kulluk first broke away, forecasts provided by the National Weather Service show the area near the island on which it ran aground was set to experience 40 knot winds and seas reaching above 20 feet.
Markey questions whether Shell pushed forward in order to avoid $6 million in taxes it could have owed the state of Alaska if the rig stayed in state waters beyond the end of the year.
Shell says the tax situation did not drive that decision. "While we are aware of the tax environment wherever we operate, the driver for operational decisions is governed by safety," Smith said.
Copyright (c) 2012 Dow Jones & Company, Inc.
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