By Kjetil Malkenes Hovland and Eric Sylvers 

OSLO -- Norway is pressuring Italy's Eni SpA to improve operations at the world's northernmost offshore oil platform after the Arctic development was shut down and evacuated over a power failure last month.

The project, known as Goliat, is testing a new circular platform concept in a development 300 miles north of the Arctic Circle in the Barents Sea. It is partially run by hydropower via a cable to the mainland, a mandate imposed by the Norwegian government to reduce the platform's emissions.

The 100,000 barrels a day field started pumping in March but has been plagued by problems. The most recent Aug. 26 shut down was the second in three months, causing the evacuation of dozens of workers.

In April, Eni reported a gas leak at Goliat. A month later, it reported that smoke had been detected in a generator. And in June, the PSA launched an investigation into an accident where a worker was hit by a steel wire and lifted by helicopter to the mainland with a head injury.

"Over time there's been disturbing information about repeated errors and a lot of incidents at Goliat," said Anniken Hauglie, Norway's minister of labor and social affairs. "We don't accept any slack in oil-industry safety, despite a downturn and falling revenues," Ms. Hauglie said.

Norway's Petroleum Safety Authority -- a government agency overseeing the oil and gas sector -- says Eni must prepare a plan to fix the problems at Goliat before the rig could be restarted. Eni presented a preliminary plan on Monday and plans to offer a final one on Friday.

The company has given no explanation for the power failure last month. In a statement to The Wall Street Journal, the company said production would restart as soon as its improvement measures were carried out and the Petroleum Safety Authority gives the green light.

Goliat is 65% owned by Eni with the rest controlled by Norway's Statoil ASA, which declined to comment.

The Bellona Foundation, a Norwegian nongovernmental organization, produced a list of at least 13 serious incidents recorded at Goliat this year including gas leaks, power losses and injuries and has called for Eni to lose its operatorship.

In an April letter to Bellona, Norway's oil minister said there was no reason to take action against Eni though the government has become more critical recently.

Ms. Hauglie said the Petroleum Safety Authority had reassured her that it possessed the necessary tools to ensure that Eni operates Goliat safely even as the oil industry slashes costs to deal with the plunge in oil prices over the past two years.

Eni's share of Goliat's production is equal to roughly 8% of its second-quarter crude output, and Statoil's share in the field contributes about 3% of its crude production. Goliat was Norway's fourth-largest oil-producing field in July.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com and Eric Sylvers at eric.sylvers@wsj.com

 

(END) Dow Jones Newswires

September 08, 2016 13:51 ET (17:51 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Eni (BIT:ENI)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Eni Charts.
Eni (BIT:ENI)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Eni Charts.