Coast Guard: Taxes, environment behind Kulluk grounding

WASHINGTON, April 4 (UPI) -- Alaska tax laws, along with harsh winter conditions, forced Shell to make the fateful decision to tow its Kulluk rig from state waters, the Coast Guard said.

The Coast Guard published a 152-page report on the Dec. 31, 2012, grounding of the drillship Kulluk. The report said Shell tried to tow the rig to Seattle for repairs to avoid Alaskan state taxes that would've went into force Jan. 1, 2013.

"If the vessel was still in Alaskan waters, Shell estimated that the tax liability would be in the millions of dollars," the Coast Guard's report said.

Kulluk's grounding off the Alaskan coast followed a 2012 exploration season in the arctic waters of Alaska that was complicated by equipment failures.

The report added that "significant swells" in the region "made towing of the Kulluk exceptionally difficult."

A spokesman for Shell told UPI the company was reviewing the report, adding, "We appreciate the thorough investigation and will take any findings seriously."

Ben van Bueden, Shell's newly appointed chief executive officer, said earlier this year he wasn't "prepared to commit further resources for drilling in Alaska in 2014."