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Shell Gets Final OK for Arctic Oil Drilling But Must Await Spill Gear

WASHINGTON - The U.S. Interior Department on Wednesday granted Royal Dutch Shell its final two permits to explore for oil in the Arctic this summer, but said the company cannot drill until required emergency equipment arrives.

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.

Image: Chiara Rose, Arctic Challenger
In this Friday, May 22, 2015 photo provided by Reese Semanko, a woman identified as Chiara Rose has suspended herself in a climbing harness from the anchor chain of the Royal Dutch Shell support ship Arctic Challenger in the harbor at Bellingham, Wash. Reese Semanko / AP

Shell discovered weeks ago that the Fennica icebreaker that holds the required equipment, called a capping stack, had a 3-foot 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. Fixing the gash and returning the vessel to the Artic could take weeks.

Shell spokeswoman Kelly op de Weegh said the Fennica's "stay in Portland will be determined by the time it takes to make a safe, permanent repair." It is likely the icebreaker will return to the Chukchi before the preliminary drilling reaches the oil zone, expected sometime in August.

"Once we have determined the area is clear of sea ice, support vessels are in place, and the Polar Pioneer (rig) is safely anchored over the well site, drilling will begin," op de Weegh said.

Shell has spent about $7 billion on Arctic exploration for before producing any oil or gas. If it finds the region to be rich in economically recoverable oil, production would not begin for at least a decade.

Environmentalists have criticized Shell's drilling plans in the Arctic, which is home to sensitive populations of whales, walrus and polar bears.