A Review of the Nigerian Energy Industry

Browne ‘wouldn’t follow Shell on Arctic’

12 August 2015, News Wires – Former BP boss John Browne would not advocate Shell’s Arctic drilling plans on account of the risks involved, according to a report.

Shell logoBrowne, current chairman of UK shale gas player Cuadrilla, believes the costs associated with such plans are not worthwhile for an oil company, the BBC reported on its website.

Both Browne, who was once chief executive of BP, and current Shell chief executive Ben van Beurden spoke with the UK broadcaster for a BBC Radio 4 documentary series in autumn called “Climate change: are we feeling lucky?”

“I’m not chairman of Shell. But I think [Arctic drilling] is very expensive and I would always go for hydrocarbons which have less cost and effort involved,” Browne told the BBC.

“Some companies will genuinely believe – they may be right – that they can produce oil safely and environmentally securely in extraordinary conditions.

“[But] I’ve never been a great supporter of right-on-the-margin development, partly because of the cost.

“So I think you’ve got to be careful what you do and cost includes your long-term reputation.”

Shell has faced stern opposition from environmental groups and some US courts to its plans to drill in the Alaskan Arctic. Its drilling plans have faced delays due to operational and other issues.

Van Beurden told the BBC: “The drilling in the Arctic comes with an increased risk profile and that is because the environment is much more fragile than other environments.

“It is also much more unforgiving in terms of climate, weather, etc. It is also, by the way, the particular reservoir that we are going to explore in, one that is – from a technical perspective – relatively easy. So you have to make a judgement: ‘Can I do this in a responsible way?’.

“That is a bit of personal journey that I had to go through as well and many others associated with the project – we believe that we can responsibly explore for hydrocarbons in Alaska.

“Whether that means that we can develop this in a way that makes commercial sense remains to be seen.”

He also said no aspect of the oil industry was free of risk. “If you are in our industry there are always significant risks that you have to worry about and therefore you have to have a very, very strong risk management framework, a very, very good risk management culture and an open and transparent dialogue within the company about what are the risks that you take on.

“There is no such thing as a risk-free world, so I cannot eliminate the risk altogether, but I can bring it back to something that I think is appropriate and manageable.”

Greenpeace UK director John Sauven criticised Shell’s Arctic plans, telling the BBC: “They’ve had drill ships run aground, an oil containment dam crushed like a beer can, a towline snapped… Nothing of what they have done over the past couple of years would give you any kind of guarantee that they could drill safely for oil in the Arctic.”

– Upstream

In this article

Join the Conversation