Goliat’s fight against decline in Arctic oil
As the Goliat platform approaches the Barents Sea ready to start drilling, oil companies’ interest in the Arctic reaches new low. Statoil postpones the development of its Johan Castberg field.
Eni’s 64,000 tons Goliat platform will arrive at its production site in the Barents Sea by early April. The launch of production due this summer comes as the oil industry’s interest in the Arctic is cooling along with falling oil prices.
Statoil, the state-controlled Norwegian company, in early March announced that it will postpone drilling at its Johan Castberg field in the Barents Sea. Company Senior Vice President Ivar Aasheim says in a press release that “current challenges in relation to costs and oil prices require us to spend more time to ensure that we extract the full benefit of the implemented measures”. At the same time, however, he confirms that the company is exploring possibilities for alternative infrastructure solutions in the region together with Lundin, Eni and OMV.
The Johan Castberg partnership will postpone the field development decision until the second half of 2016, with expectations for an investment decision in 2017.
Drop in production
Figures from Patchwork Barents, the regional data portal, show that production in northern Norwegian waters in 2014 dropped to 4,3 million tons, the lowest in 20 years. At peak production in 2001, output in the area reached 18,4 million tons. The figures include production from the fields located in the Norwegian Sea off the coast of the Nordland county, among them the Heidrun, Morvin, Norne and Urd fields.
Goliat will give a major bounce-back of regional production. The platform will produce up to 100,000 barrels per day, project operator Eni informs. It will be the first oil field to come on stream in the Barents Sea, and the world’s most northerly offshore development.
The Hyundai Heavy Industries in 2010 got the contract on the construction of the FPSO, a Sevan-1000. The contract originally had a price tag of 6,9 billion NOK (€830 million), but has later become far more expensive. The whole project is now estimated to cost Eni about 37 billion NOK.
The 75 meter tall and 107 meter diameter platform will arrive from South Korea on board the world’s largest heavy lift vessel, the “Dockwise Vanguard”, by early April. The FPSOwill then be prepared for operations and towed the 80 kilometres to the field location for hook-up and commissioning, the company says. When taken into operation, it will be manned by a crew of 120-140 people. In addition, about 60 people will follow up the company’s operations organisation in Hammerfest.
The project operated by Eni (65%) together with Statoil (35%) is based on 174 million barrels of oil resources.
Related stories from around the North:
Canada: Canada ponders exceptions to relief well rule for Arctic oil drilling, Alaska Dispatch
Finland: Solar and wind power yield cheapest energy say Finnish experts, Yle News
Greenland: #SavetheArctic… from Greenpeace, Blog by Heather Exner-Pirot
Iceland: From Arctic Circle 2013-2014, a big drop in the price of oil, Blog by Mia Bennett
Norway: Risks too high with Rosneft, Norwegian drillmen say, Barents Observer
Russia: U.S. companies bid for contracts in Arctic Russia, Barents Observer
United States: Targeted Arctic lease sales could ward off conflicts says U.S. agency, Alaska Dispatch
