Eni Pledges Fewer Mishaps on Arctic Platform in Safety Shake-Up

(Bloomberg) -- Eni SpA is shaking up safety measures at the Goliat platform in Norway’s Arctic in a bid to draw a line under a series of incidents that have hurt production at the world’s northernmost offshore oil field, giving ammunition to opponents of drilling in the region.

The Italian company is increasing supervision and improving risk assessment after about a dozen incidents since production started in March, said Eni’s head of operations in Norway, Phil Hemmens. The company is also giving workers a bigger say in decisions after criticism from unions that its safety culture wasn’t up to Norwegian standards, he said.

“Nobody, from myself through all of the offshore crew, want to keep starting up and stopping again,” he said in a phone interview from Stavanger on Tuesday. “We need to up our game on the risk assessment of the maintenance we’re doing.”

Since Goliat started in March, it’s come under fire from unions and scrutiny from authorities after incidents including gas alarms, a serious injury and, most recently, a power failure that has kept the platform idle for more than two weeks.

While Eni’s commitment to change is “absolutely” a good sign, workers are waiting to see if the new spirit of cooperation will deliver results, said Joern Erik Boee, a national officer at Industry Energy, Norway’s biggest oil union.

The setbacks at the first platform in Norway’s Arctic Barents Sea have threatened to deepen opposition to drilling in the region just as the Nordic country seeks to expand exploration and start up new fields there. Norway is counting on the Barents to become its next oil province after crude output fell by half since 2000.

‘Bigger Microscope’

While Goliat, as a pioneering project, has faced closer scrutiny, its troubles aren’t due to operational conditions in the region, Hemmens said. The area is regarded as less harsh than other parts of the Arctic because of shallower waters and the warming effect of the Gulf Stream.

“Because we’re in the Barents Sea, we have a bigger microscope on us,” Hemmens said. But “none of the issues we’ve had are related to being in the Barents Sea itself.”

Goliat was delayed by more than two years and cost almost 50 percent more than planned when it finally started production in March. The circular floating production, storage and offloading vessel, which Eni has called the most sophisticated of its kind, is working very well, though the company is still “getting used to it,” Hemmens said. A lot of the gas alarms have been triggered because detectors were mistakenly left on, not because of equipment failures, he said.

Eni said last week it would only resume production when worker representatives and safety authorities agreed it was right to do so. It still hopes that can happen within “a couple of weeks,” Hemmens said. Boee, of the Industry Energy trade union, said he saw “no reason” Eni couldn’t meet that timeline.

The field had reached maximum capacity of 100,000 barrels of oil a day when it lost power on Aug. 26 and had to shut down. It was Norway’s fourth-biggest producing oil field in July, according to the Norwegian Petroleum Directorate.

Hemmens, who previously acted as Eni’s global head of safety, said the Italian company is planning six wells in Norway in the next couple of years, of which at least half will be in the Barents Sea. It didn’t participate in the country’s Arctic-focused 23rd licensing round because it has enough work on Goliat and Statoil ASA’s Johan Castberg project, where it’s a partner, but is considering participating in the next awards, Hemmens said.

“The intent is to stay here,” he said. “We like the stability of Norway as a place to produce oil and gas. It’s a good balance in our portfolio.”

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net Alex Devine


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