Revised Outer Continental Shelf Lease Exploration Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. May 2011 

### Appendix J Critical Operations and Curtailment PlanRevised Outer Continental Shelf Lease Exploration Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. May 2011 

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### SHELL GULF OF MEXICO INC. 3601 C Street, Suite 1000 Anchorage, AK 99503



# CRITICAL OPERATIONS AND CURTAILMENT PLAN
Chukchi Sea, Alaska

May 2011

Submitted to: U. S. Department of the Interior Bureau of Ocean Energy Management, Regulation and Enforcement Alaska OCS Region

Submitted by: Shell Gulf of Mexico Inc.Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. i May 2011 

### Table of Contents

1. Introduction .................................................................................................................. ........1
2. Planned Critical Operations .................................................................................................2
3. Unplanned Critical Operations ............................................................................................3
4. Other Potentially Cr itical Operations...................................................................................3
5. Circumstance/Conditions Re quiring Curtailment ................................................................4 5.1 Severe Weather ........................................................................................................4 5.2 Sea Ice ......................................................................................................................4 5.3 Sea Spray .................................................................................................................4 5.4 Unavailability of Materials, Pe rsonnel, and / or Equipment ....................................5 5.5 Well Control.............................................................................................................5

6. Time Requirements ..............................................................................................................6 6.1 Secure Time (ST) .....................................................................................................6 6.2 Move-off Time (MT) ...............................................................................................6 6.3 Total Time (T-Time) ................................................................................................7 6.4 Hazard Time (HT)....................................................................................................7

7. Curtailment Decision Process ..............................................................................................7 7.1 Key Personnel ..........................................................................................................7 7.2 Curtailment Decision Protocol .................................................................................8
8. Organization and Reporting Chart .......................................................................................9
9. Training ...................................................................................................................... ........10

Reference Documents:

• 30 CFR Part 250.417 (e)

• Shell Gulf of Mexico Inc. Ice Management Plan (Chukchi Sea)Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. ii May 2011 

### ACRONYMS & ABBREVIATIONS

API American Petroleum Institute BOEMRE Bureau of Ocean Energy Management, Regulation and Enforcement BOP blowout preventer CFR Code of Federal Regulations COCP Critical Operations and Curtailment Plan Discoverer Motor Vessel Noble Discoverer DNV Det Norske Veritas ft feet (foot) HSSE Health, Safety, Security and Environment HT Hazard Time IMO International Maritime Organization IMP Ice Management Plan LMRP lower marine riser package m meter(s) MT Move-off Time M/V Motor Vessel Plan Critical Operations and Curtailment Plan RARs Rig Anchor Releases RS/FO Regional Supervis or, Field Operations Shell Shell Gulf of Mexico Inc. SIWAC Shell Ice and Weather Advisory Center ST Secure Time T-Time Total Time USCG U.S. Coast Guard VMT Vessel Management TeamCritical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Offshore Inc. 1 May 2011 1. Introduction The primary purpose of this Critical Operations and Curtailment Plan (COCP, or Plan) is to document precautionary measures to minimize th e likelihood and consequence of an oil spill while drilling exploration wells in the Chukchi Sea and to protect personnel, equipment and the environment. The COCP is arranged to:

• Identify critical operations

• Identify circumstances that may cause curtailment

• Identify relationships between the COCP and the Ice Management Plan (IMP)

• Comply with all regulatory requirements.
Drilling operations can be interrupted for a variety of reasons. Some factors affecting curtailment include:

• Adverse ice movement, weather conditions, sea states and other environmental conditions that add risk to ongoing operations.

• Time requirements for bringing support ve ssels to bear on a particular issue.

• Loss of ice management vessel support due to mechanical issues or as a result of temporary reassignment of ve ssel(s) to another area (for example, to provide rescue, supply/logistics support, etc.).

• Communications loss between vessels and/or between vessels and the shorebase(s). This plan identifies certain drilling activities designated as critical operations and discusses plans to delay, limit or cease these operations when hazards develop with the potential to harm personnel; damage vessels, equipmen t or the well; or result in a spill that could adversely impact the environment. This plan describes the de cision-making process and identifies the lines of authority, responsibility and accountability fo r successfully handling critical operations. A companion plan to the COCP is the IMP, which details the process for making these critical decisions with regard to ice conditions. The IM P describes ice management operations, the flow of ice information, and how direction of the ice management vessels is accomplished. The “Ice Alert Procedures” contained within the IMP desc ribe the ice alert leve ls, the decision process leading to their change, and the decision to return to the site. It also deals with well suspension operations, mooring system recovery , and well re-entry decisions associated with ice hazards in the Chukchi Sea. No critical operation will be st arted, or continued if al ready in progress, until the time required to perform the task is properly determined unde r the circumstances and that time is deemed to be sufficient for safe completion of the operation. Certain drilling operations are more likely than others to generate conditions that could lead to a well control incident or other incident that c ould result in harm to people, assets or the environment. This is particularly the case when subsurface formations capable of flowing formation fluids into the we llbore are exposed, or when th e well has encountered abnormal pressures.Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 2 May 2011 This COCP in conjunction with the IMP also sa tisfies 30 Code of Federal Regulations (CFR) Part 250.417 (e) as required for a “floating drilling unit contingency plan for moving off location in an emergency situation.” No contingency plan can adequately cover all conceivable situations and circumstances, nor is this plan intended to be a substitute for good judgment and experience in dealing with unexpected situations. Shell plans to use the drillship Motor Vessel (M/V) Noble Discoverer ( Discoverer ) to drill the proposed wells described in the revised Chukchi Sea Exploration Plan. The Discoverer is a true, self-contained anchored drillship. Station keep ing is accomplished using the turret-moored, eight-point anchor system. The underwater fairl eads prevent ice fouling of the anchor lines. Turret mooring allows orientation of vessel’s bow into the prevailing seas and/or ice drift direction to present minimum hull exposure to dr ifting ice. The vessel is rotated around the turret by hydraulic jacks. Rotation can be augmented by the use of the bow and stern tunnel thrusters. The hull has been strengthened for i ce resistance by retrofitting sponsons to the ship’s hull.
The Discoverer is classed by Det Norske Veritas (DNV) as a Mobile Offshore Drilling Unit for worldwide service. It is a “1A1 Ship-Shaped Drilling Unit l” and is capable of performing drilling operations offshore Alaska. The Discoverer has been issued with a DNV Appendix to Class stating: “the structural strength and material qual ity of the ‘Ice Belt’ formed by the sponsons below the 8950mm A/B level, have been reviewed against the requirements for the DNV ICE-05 Additional Class Notation and found to meet those requirements (as contained in DNV Rules for Classification of Ships, Pt 5 Ch 1, July 2006) for a design temperature of -15 degrees C.”
The Discoverer will comply with the requirements of 30 CFR Part 250.417, the IMO, the USCG and DNV. All drilling operations will be conducted under the provisions of 30 CFR Part 250 Subpart D, API RP 53, 65 Part 2 and 75 and othe r applicable regulations and notices including those regarding the avoidance of potential drilling hazards, safety and pollution control. Such measures as inflow detection a nd well control, monitoring for lost circulation and seepage loss, and casing and cementing program designs will be the primary safety measures. Primary pollution prevention measures are the contaminat ed and non-contaminated drain systems, the mud drain system, and the oily water processing system. Structurally, the Discoverer is comparable to the Canmar drillships used safely and successfully in exploration campaigns in the Beau fort and Chukchi Seas into the 1990s.
2. Planned Critical Operations Planned critical operations are t hose operations that are designed to occur during the exploration drilling program in the Chukchi Sea. Planned cr itical operations include, but are not limited to:

• Drilling into a zone capable of flowing oil and/or gas

• Conducting certain operations in a well where z ones capable of flowing oil and/or gas are exposed or are anticipated of becoming exposed such as:Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 3 May 2011 – Coring (whole or sidewall cores)

– Pulling out of the hole with the drill string

– Wireline logging in the open hole

– Running casing, circulating and cementing

– Continuing to drill after a well-related event (e.g., a kick) Not all of these planned critical operations will necessarily be conducted or encountered on each well during the exploration drilling program. Data collection and testing requirements will vary from well to well depending on previous results from offsets and the defined exploration objectives for the new well.
3. Unplanned Critical Operations Certain operations are not planned in the normal course of drilling exploration wells, but they could be undertaken should situations arise in which they are required. If these unplanned operations are deemed to increase the risk of harm to people, assets or the environment they may be curtailed depending on th e level of risk involved. Such operations could include:

• Fishing for lost items in the well

• Cutting and pulling casing/ milling casing window

• Open hole sidetracking

• Drilling into a lost circulation zone

• Perforating

• Remedial well work

• Conducting well control operati ons (e.g., circulating a kick out of the hole)

4. Other Potentially Critical Operations These are operations that could be considered critical depending on the well status and conditions at the time:

• Moving back over a well after an emergency evacuation

• Re-entering a suspended or te mporarily abandoned (TAd)well

• Anchor line tensioning

• Accidental or unintentional riser disconnect

• Oil or fuel spill

• Heavy load lifting and handling during re-supply activities

• RefuelingCritical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 4 May 2011 • Shipboard fire Should these conditions be encountered, severi ty and potential impact will be evaluated on a case-by-case basis and operations may be curtaile d while dealing with th em using safe methods and procedures. Again, good judgment is the key for dealing with such situations.
5. Circumstance/Conditions Requiring Curtailment
Several situations arise under which critical operations may be terminated, limited, or not commenced. These are listed and discussed briefly below:
5.1 Severe Weather
Wind and sea states can affect vessel motion (e.g., heel, pitch, roll, and heave) beyond safe operating limits and/or create conditions that make certain operations unsafe. Wind and currents can also result in ice movement that cr eates an unsafe condition for the vessel. Conditions for curtailment activities will depend on the performance of the drillship in the open water of the Chukchi Sea. The drillship beha vior will be thoroughly analyzed upon mooring on the first drill site location, and it will be reev aluated as needed during drilling operations. Thresholds will be established for weat her and sea conditions that will control:

• Equipment preparation to curtail operations

• Decision to cease drilling

• Hanging off drillstring or otherwise suspending the well

• Disconnecting riser

• Moving the drilling vessel off the drill site The curtailment of critical operations as a result of severe weather is the responsibility of the Drilling Vessel Master with input provided by the Shell Drilling Foreman and the Noble Drilling Superintendent.
5.2 Sea Ice Ice conditions that impact vessel station-keeping limitations (e.g., maximum horizontal displacement off well center) or endanger the ve ssel hull, will lead to curtailment of critical operations. Ice Alert Level details outlined in the IMP identify timelines as well as roles and responsibilities for action before th e arrival of hazardous ice and are reviewed and evaluated daily in order to determine allowable operations. If there is insufficient time to complete a critical operation, or if a routine operation becomes critical before the arrival of the ice hazard, curtailment will be required. 5.3 Sea Spray Freezing precipitation or sea spray on the vessel can quickly affect the Vertical Center of Gravity and possibly destabilize the drilling vessel. Wind exacerbates the situation by increasing iceCritical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 5 May 2011 accumulations on the windward side of the drilling vessel. Such ice loading could lead to curtailment of critical operations. The predic tion of ice loading under adverse conditions is required to determine whether certain operations can begin or continue before this hazard becomes acute. Information for developing ic e loading predictions is provided through the consideration of actual on-site conditions in conjunction with forecasted weather advisory information from the Shell Ice and Weather Advisory Center (SIWAC) in Anchorage. The prediction of ice loading is the responsibility of the Drilling Vessel Mast er with input provided by the drilling vessel’s Ice Advisor. 5.4 Unavailability of Materials, Personnel, and / or Equipment Curtailment of critical operations may result from any of the following developments, or combinations thereof:

• Limited availability and/or capability of critical oil containment and cleanup equipment

• Significant increase in oil spill control system response time

• A lack of trained personnel or equipment for conducting a particular critical operation

• Insufficient supply of drilling mud materials at the drill site for emergency well control purposes

• Transportation for personnel, supplies and oil spill containment and cleanup equipment not readily available

• Well control equipment, marine safety systems, fire detection, fire fighting or any other health, safety, security and environment (H SSE) critical systems that become inoperable or do not meet minimum standards

• Loss of ice support vessel(s)

• The absence of critical information and/or communications (e.g., ice data, weather forecasts, logistics) The curtailment of critical operations due to the unavailability of ma terials, personnel or equipment is the responsibility of the Shell Dr illing Foreman. The decision to curtail activities as a result of diverting ice management resources away from the drilling vessel shall be made jointly by the Shell Drilling Foreman and the Drilling Vessel Master. The onshore Shell Drilling Superintendent (in consultation with the Noble Rig Manager) will endorse the plan or set priorities if agreement cannot be reached at the field level.

5.5 Well Control Critical operations, other than efforts to restor e primary well control, will not be undertaken during a well control event (e.g., drilling will cease pending circulation of a kick out of the hole and adjusting mud density to prevent further kicks from entering the wellbore). The curtailment of critical operations due to a well control event is the responsibility of the Shell Drilling Foreman.Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 6 May 2011 6. Time Requirements
The IMP describes the color-coded alert levels associ ated with forecasting the arrival of a hazard (described below as Hazard Time [HT]). Th e IMP likewise describes how those time forecasts are used for deciding when to curtail or cease critical operations and it identifies various well securement methods as well as the applicab le roles and responsibilities of key personnel involved. The definitions below describe the time elements used in the IMP alert level chart.
6.1 Secure Time Secure Time (ST) is defined as the time in hours required for rig crews to cease critical operations and to secure and te mporarily abandon the well in a way that prevents leakage of hydrocarbons, regardless of how long the well w ill be suspended. It also includes the time it requires to disconnect the Lower Marine Riser Package (LMRP) from the Blowout Preventer (BOP) and to secure the riser and LMRP on deck. ST varies and depends on the type of operation in progress at the time operations are suspended. For example, if the well is drilling in a zone capable of producing hydrocarbons, the time required to pull out of the hole with the drill string must be tempered by the maximum pipe speed to avoid swabbing a kick into the wellbore. It is also impacted by the method selected for suspending the well. If plugs are to be set, either mechanical or spotted cement slurries, ST will be greater than if, for example, a casing string has just been cemented and not drilled out. In the later case additional plugging may not be necessary and the drill string might simply be pulled to the surface or suspended in the wellhead a nd blind/shear rams subsequently closed. As noted earlier, various methods for suspendi ng the well are outlined in the IMP. Detailed procedures for suspending the well will be availa ble on the drillship while drilling. Regardless of which technique is selected, estimates of the time required to suspend the well are experienced-based and must be conservative to allow for unforeseen circumstances. The Shell Drilling Foreman, with input from the Shell Dr illing Superintendent and the Shell Drilling Engineer will advise the Noble Rig Superintendent of the well suspension plan to be used. The Noble Drilling Superintendent is responsible for estimating the resulting ST and for conveying his determinations to the Drilling Vessel Master, the Shell Drilling Foreman and the rest of the Vessel Management Team (VMT).
6.2 Move-off Time Move-off Time (MT) commences once the drilling riser and LMRP have been retrieved and secured, and it is defined as the time in hours required to safely store remaining items aboard the drilling vessel, recover moorings, and make the drilling vessel ready to evacuate the site. MT, like ST, varies considerably depending on a number of circumstances including sea state, weather conditions, the type hazard involved, a nd the method selected for mooring recovery. Horizontal displacement of the rig from the wellbore centerline may complicate release of the LMRP. Inadequate time available for recoveri ng anchors using conventi onal means may require activation of Rig Anchor Releases (RARs) or allo wing anchor wires to spool off winches. These methods are also identified in “Mooring System R ecovery / Release”, Section VIII of the IMP.Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 7 May 2011 The Drilling Vessel Master is res ponsible for estimating MT. Like the ST estimate, MT will be conservatively designed to allow for uncertainties.
6.3 Total Time Total Time (T-Time) is the sum of ST and MT, a nd it is defined as the time required, in hours, to cease operations, secure the well and be ready to move off the drill site.
6.4 Hazard Time Hazard Time (HT) is the time in hours remaining before the arriva l of the hazar d, regardless of type, at the drill site. The IMP outlines how the arrival of ice hazards in particular are predicted, based on observations of ice features by Ice A dvisors and Specialists on support vessels and on the drilling vessel, combined with ice and weather predictions provided by the SIWAC. Other hazards (e.g. severe weather and sea spra y) are predicted using a variety of sourcesincluding, but not limited to, the support vessel Ice Advisors and the SIWAC as well as the onsite routine observations of th e Marine Mammal Observers who also report on environmental conditions as they regard sea state, weather and spray ice conditions aboard and in proximity to the drilling vessel. The potential for an earlier-tha n-forecasted arrival of a given hazard at the well site should be anticipate d. Observation and reporting frequency from all sources must increase as HT decreases to ensure that appropriate measures are being employed to protect people, assets, and the environment.
7. Curtailment Decision Process The decision process and the roles and responsibilitie s for dealing with ice hazards are addressed in the IMP. The decision processes and specific procedures for dealing with emergencies in general are in the drilling vessel operations manual kept on the drilling vessel for reference. In every case, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) will be included in the process and will be kept informed of all operations, alerts, and decisions through verbal communications and written reports. 7.1 Key Personnel The following on-site personnel have significant roles in determining wh en and how curtailment of critical operations will be undertaken:

• Drilling Vessel Master

• Shell Drilling Foreman

• Noble Drilling Superintendent

• Noble Chief Engineer

• Ice AdvisorsCritical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 8 May 2011 Together, the key personnel id entified above make up the Vesse l Management Team (VMT). This VMT ensures that all input from the various data sources are considered in making a decision to curtail operations. De termining critical opera tions and their curtailment in the face of approaching hazards rests primarily with the Shell Drilling Foreman with inputs from the rest of the VMT and the Shell Drilling Engineers, Shell Drilling Superintendent, and Well Delivery Manager.
7.2 Curtailment Decision Protocol The curtailment decision protocol is described below, and covers steps to be taken from the time a hazard is recognized until ultimately, the drilling vessel is ready to depart location should the situation require.

• Upon identifying that a hazard exists which may require curtailment, the Drilling Vessel Master will notify the Shell Drilling Foreman. The Shell Drilling Foreman, with the concurrence of the Shell Drilling Superint endent and Shell Drilling Engineer, will determine what operations will be curtailed based on hazard type, severity and projected arrival time. This decision will incorporate input from the VMT and will have the concurrence of the Drilling Vessel Master.

• If the well needs to be suspended, a suspensi on procedure will be selected by the Shell Drilling Foreman and the Shell Drilling Engineer and approved by the Shell Drilling Superintendent.

• The Shell Drilling Superintendent will sub mit the proposed suspension plan and ST details to the BOEMRE Regional Supervisor , Field Operations (RS/FO) for approval.

• The Shell Drilling Foreman will advise the Noble Drilling Superintendent of the suspension procedure chosen, and the Noble Drilling Superintendent will estimate ST. The ST calculation will then be distributed to the Shell Drilling Foreman and the VMT as well as applicable sh ore support parties.

• The move-off procedure and estimated time required will be determined by the Drilling Vessel Master. An estimate of Move-off Time (MT) will be provided to the Shell Drilling Foreman and the rest of the VMT as well as applicable shore support parties.

• When the alert level described in the IMP reaches yellow status, well suspension procedures will be performed and the drilling vessel made ready to move off location as conditions require. The Drilling Vessel Master will ultimately make the decision to move the vessel to a safe location until the hazard has passed.

• The decision to execute an emergency well suspension due to an unanticipated acute hazard (e.g., well control incident, shipboard fire) and the procedure selected to do so will be made by the Drilling Foreman (e.g., drop drill string, cut the drill pipe). Once the well is suspended, the Drilling Vessel Master will make the drilling vessel ready to move if necessary. The Well Delivery Manager, the Shell Drilling Superintendent and the BOEMRE RS/FO will be notified as soon as pr acticable after the dr illing vessel has been made safe.Critical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 9 May 2011 • The Shell Drilling Superintendent with the concurrence of the Shell Drilling Foreman and the Drilling Vessel Master will make the decision to move back onto the well and resume operations when it is safe to do so.
8. Organization and Reporting Chart Notification of the decision for curtailments to Shell, USCG and BOEMRE agency representatives will be made as soon as practical, but in a manner that does not interfere with the safety of the crew, environment, or vessel. All operations curtailment decisions will be documented on the Shell Daily Operations Report and conveyed to the on-site BOEMRE representative as they develop. Operations curtai lment decisions will also be formally conveyed to BOEMRE on a weekly basis via the Well Activi ty Report and at the end of the well operations as part of the End of Operations Report. The following chart illustrates the lines of communication in the field and from the field to the shorebase.

USCG Shell Drilling Superintendent BOEMRE

Shell Ice and Weather Advisory Service Noble Rig Manager BOEMRE Representative

Drilling Vessel Master Noble Rig Superintendent Shell Drilling Engineers

Drilling Vessel

Ice Advisor Noble Chief Engineer Shell Drilling Foreman

Fennica (or similar) Tor Viking (or similar) Support VesselsCritical Operations and Curtailment Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. 10 May 2011 9. Training All personnel will be made aware of their roles and responsibilities described within this COCP and the IMP through a training program to be taught before the vessel is on site. All persons with a key position in the COCP will be provided a copy of this document, and training will be provided by Shell prior to deployment. This training will include a table-top exercise that will be carried out prior to initiating operations in the Chukchi Sea. Anticipated participants will be:

• Shell and drilling vessel leadership (both Drilling and Marine Operations staff)

• Oil Spill Response representative

• Ice Information Center representatives

• BOEMRE

• Ice Advisors, Ice Observers and Ice Pilots

• Anchor Handlers If necessary, this document will be updated and reissued, incorpor ating the lessons learned from the table-top exercise.

Reference Documents:

• CFR 30 Part 250.417(e)

• Shell Gulf of Mexico Inc. IMP (Chukchi Sea)