Goliat Gets Green Light - Almost

Italian oil firm Eni has been granted permission to begin production at its Goliat offshore oil field by Norway's Petroleum Safety Authority (PSA), contingent on a final review of the project's construction by state oil firm Statoil. The firm has also secured approval from the Norwegian Environment Agency.

“The consent is granted on the basis of documentation submitted in connection with the application, and explanations provided during the case processing . . . Eni describes a number of activities remaining before the facility can be put into use and after production has started,” the PSA said in its announcement.

The date of Statoil's verification will depend on construction progress at the facility, and has not been announced.

Local media coverage suggests that the PSA's decision is subject to public review, and that production could start in February at the earliest. At last announcement, Eni had intended to start production in January.

In addition to the approval from PSA, Eni has also secured permission from the Norwegian Environment Agency, Norwegian news sources say.

The Environment Agency will require the detection of any spills within three hours; three independent systems to prevent the spread of oil - at the platform, in the fjords and coastal waters, and one for the shorlines; and oil skimming and dispersant assets ready to deploy within two hours.

The $6 billion Goliat project, in the Barents Sea, will be the world's northernmost oil production platform when it comes online. The Goliat installation is a circular FPSO designed by Sevan Marine, their Sevan 1000.

Goliat is two years behind schedule and 20 percent over budget, and some analysts suggest that its break-even crude price is well above the current sub-$30 trading for Brent.

The PSA had delayed production at Goliat last month; the agency announced in November that it had audited the platform and found deficiencies in electrical system safety, especially with regard to ignition sources, and in December it said that the problems had not been resolved to its satisfaction.