Goliat Restarts Production Once Again

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By MarEx 2017-12-18 18:19:16

Eni says that it has resumed production at the Goliat platform, a multi-billion-dollar Arctic facility in the Barents Sea. Norway's Petroleum Safety Authority (PSA) ordered Eni to shut down the platform on October 6, citing unresolved issues with explosion-proof motors. The PSA gave the go-ahead to restart production on December 8. 

"Maintenance and modification work was carried out in close cooperation between management, employee representatives and relevant disciplines," Eni said in a statement Monday. "The campaign was conducted using a rented housing platform to ensure additional staffing. This made it possible to complete various additional work beyond the original maintenance plan."

Eni said that it is now looking to the future development of the Goliat field. In 2017, the Snadd reservoir in the Goliat license was put into production, adding 7.5 million BOE in additional reserves. In 2018, the company plans to drill two new production wells and one appraisal well, called Goliat West. 

Eni hopes that additional nearby exploration will increase the profitability of Goliat, which was plagued by cost overruns during construction. The facility ended up costing the company nearly $6 billion before installation, commissioning, a long series of shutdowns and its latest electrical repairs. In November, a report prepared for environmental group Bellona forecast that the breakeven for Goliat was in the range of $75 per barrel, suggesting that it might not turn a net profit over its lifespan. However, this forecast is not set in stone: Professor Petter Osmondsen of the University of Stavanger told Upstream that "final profitability cannot be based on current volumes," adding that "enhanced recovery and supplementary volumes from adjacent fields may improve project economics considerably."

Goliat uses shore power supplied by a subsea cable, and it was forced to shut down in August 2016 after it lost electricity. The outage lasted for several hours, and non-essential personnel were temporarily evacuated. It was the second time since startup that it had suffered a serious power failure, and the PSA demanded an investigation and a "binding, time-delimited schedule with deadlines for implementing corrective measures." 

Electrical issues plagued Goliat even before its startup, which was pushed back several months due to problems with ignition sources. The protracted difficulties at the site have amplified calls from environmental groups like Greenpeace for a halt to Norway's Arctic oil and gas leasing program.