Shell questioned on tax maneuver in Alaska

Jan. 11, 2013 at 9:07 AM

WASHINGTON, Jan. 11 (UPI) -- U.S. Rep. Ed Markey, D-Mass., said he wanted to know whether Shell moved its drill ship Kulluk to a different harbor to avoid tax liability on the rig.

Shell's drill ship Kulluk struck ground New Year's Eve near Sitkalidak Island off the Alaskan coast. It was under tow from northern oil grounds for maintenance. The company later moved the vessel to nearby Kiliuda Bay for inspection.

Markey, ranking member of the House Natural Resources Committee, said he questioned claims made by Shell that Kulluk was towed from its grounding sight because of inclement weather.

"Reports that financial considerations rather than safety may have factored into Shell's considerations, if true, are profoundly troubling," he said in a letter to Shell Oil President Marvin Odum.

Shell spokesman Curtis Smith told Bloomberg News that avoiding a Jan. 1 tax issue in the state was "a consideration" but "not among the main drivers for our decision to begin moving the Kulluk."

The grounding brought renewed concerns about oil and natural gas exploration in arctic waters. Shell received federal approval last year for a campaign in the northern Chukchi and Beaufort Seas but was haunted by weather and equipment issues.

Markey last week questioned Shell on how it would handle fuel removal from the vessel, what plans it had to cope with severe weather and how it would've responded to a similar incident in the remote northern Alaskan seas.

There were no injuries or reports of sheen associated with the grounding incident.

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