Eni's Arctic Oil Field Approved After Delays and Overruns
20 January 2016 - 9:14AM
Dow Jones News
By Kjetil Malkenes Hovland
OSLO--A Norwegian regulator on Tuesday formally approved the
production vessel at the world's northernmost oil field, Eni SpA's
Goliat field in Norway's Barents Sea, which could potentially start
pumping next month, over two years delayed and well over
budget.
"Eni Norway has been given consent by the Petroleum Safety
Authority to start using the Goliat floating production, storage
and offloading vessel and related installations at the Goliat
field," said Norway's Petroleum Safety Authority, or PSA.
Production could start in February at the earliest, as the PSA's
approval will be on public hearing for up to five weeks.
The Arctic oil field has been delayed several times and was
supposed to start producing before Christmas, but the PSA--which
oversees oil and gas projects to ensure they are in line with the
country's strict safety regulations--requested additional
documentation on safety and critical equipment.
The PSA said the approval was based on documentation provided by
the project partners, including recent letters from Eni and
Statoil, and that some additional work was still required before
production could start.
"Eni describes in its letter several activities that remain
before the installation can be utilized, and after the production
has started. Statoil supports the description, and plans a
verification, to assess whether Goliat is ready to start
production," the PSA said.
In September, Eni said the startup was just weeks away, and in
November it said oil would be flowing by the end of the year. The
original plan called for the startup by the end of 2013. Eni has a
65% stake in Goliat, while Norwegian national oil company Statoil
ASA owns the remaining stake.
The partners have invested around $6 billion in Goliat, a 52%
cost overrun compared with the 2009 plan. With Brent crude trading
below $30 a barrel--levels not breached in more than a decade--the
Italian oil and gas company is already struggling to make the field
economically viable. Analysts have put the break-even point for the
field--the point at which it is profitable--at more than $100 a
barrel.
Eni wasn't immediately available to comment.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
January 19, 2016 16:59 ET (21:59 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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