LONDON--A Royal Dutch Shell PLC (RDSA, RDSA.LN) executive tasked
with managing a controversial multi-billion-dollar oil exploration
program in the U.S. Arctic Ocean that failed to complete any wells
in last year's short drilling season is to leave the company by
"mutual consent" later this year.
According to a Shell spokesman, David Lawrence, executive vice
president responsible for exploration activity in the Americas, is
to leave Shell mid-year. The spokesman didn't give details why Mr.
Lawrence, who joined Shell in 1984, was leaving the company. Prior
to his current post, Mr. Lawrence worked in exploration,
development and strategy.
The personnel move is significant as Shell has staked a lot on
its Arctic oil exploration plans, which form an important part of
its strategy to seek out new reserves to replace declining
production elsewhere. But the company's 2012 drilling season was
marred by bad weather, mechanical failures and regulatory
challenges, leading it to postpone drilling this year.
Shell's Arctic oil drilling experience is critical for other
companies keen to tap some of the 90 billion barrels of oil the
U.S. Geological Survey estimates the Arctic region may hold. They
are closely watching Shell's Arctic efforts hoping to learn about
the potential challenges they may face there.
ConocoPhillips (COP) is set to drill in the Alaskan Arctic next
year. Elsewhere, Exxon Mobil Corp. (XOM), Italy's Eni SpA (E,
ENI.MI) and Norway's Statoil ASA (STO, STL.OS) have partnership
agreements with Russia's OAO Rosneft (ROSN.RS) to develop Arctic
blocks. BP PLC (BP, BP.LN) is close to securing a long-coveted
Russian Arctic oil deal with the Russian energy giant.
Green groups are fearful of the deleterious effect an oil spill
in the pristine Arctic environment might have, while some investors
say the potential cost to a company in fines and lawsuits if there
was an accident outweigh the benefits of drilling.
The news about Mr. Lawrence's departure was first reported on
the website of John Donovan, a blogger critical of the company.
It also comes as Shell has been conducting an internal review
into what went wrong in its Alaska offshore drilling campaign last
year. The U.S. Department of the Interior said last week that Shell
had failed to prepare adequately for the 2012 drilling season,
putting pressure on the company's operations and schedule. It also
said in the review into the company's troubled effort that weak
oversight of the contractors Shell relied on had led to many of the
company's problems.
Shell will need to provide more detailed plans before it can
resume its Alaskan offshore Arctic drilling program, the Interior
Department said.
"Shell's difficulties have raised serious questions regarding
its ability to operate safely and responsibly in the challenging
and unpredictable conditions offshore Alaska," the report said.
Last month, Shell that it would "pause" its exploration drilling
activity in Alaska's Beaufort and Chukchi Seas for 2012 to prepare
equipment and plans.
Shell has spent more than $5 billion so far on permits,
personnel and equipment to prepare for the 2012 drilling season.
But the venture was beset by problems before it even began:
Drilling was delayed by lingering sea ice, one drill ship almost
ran aground, a second rig was damaged while being towed during a
storm and an oil spill containment system was damaged in a
test.
Write to Selina Williams at selina.williams@wsj.com
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