courtesy Sevan Marine

The Norwegian government has approved Eni and StatoilHydro’s plan for the Goliat oilfield in the Barents Sea off northern Norway, although powering the platform from land — once a key government demand to cut down on generator emissions — has been waived until 2017, and field partners could yet pull out if project economics further erode.

While Parliament, the Storting, must still okay Goliat, the legislative body has never said “No” to an oilfield development. And while Goliat’s nearness to coastal ecosystems had stirred Norway’s Greens into protest, the OK from Norway’s “Red-Green coalition” was a greater concern to planners than a vote in the Storting. Despite the approval, officials now admit the two oil companies have put caveates in the plans they submitted which reserve the right to pull out if project demands outweigh projected earnings.

The field has been alotted emissions quotas and will pay Norway’s carbon tax, but although the government demanded and got Eni to use some electricty from shore, power from the gas generators aboard Sevan Marine’s “round-rig” floating producer will be the main source of working voltage until 2017, or as late as 2019. A shortage of power in northern Norway had always concerned project engineers pressed to create an economic link to shore.

“Goliat has been given strict environmental demands,” Oil and Energy Minister Terje Riis-Johansen was quoted as saying, adding, “The field will fulfill the demands placed on it by the (resource) management plan for the Barents Sea, herein the demand for zero emissions.”

Riis-Johansen said his goal was power from land only, but the practicalities of offshore operations were insurmountable.

“Goliat with be one of the biggest industrial projects ever undertaken in northern Norway,” he said. Some 500 jobs are seen boosting economic development in the sparcely populated north of Norway for the next 15 years. Hammerfest, the biggest area town, was due to get its own helicopter and offshore supply base, according to Riis-Johansen.

He repeated the Norwegian Petroleum Directorate’s conservative estimate of Goliate’s reserves of oil, saying 174 million barrels were on hand to deliver 60 billion kroner ($9.36 billion) of sales at today’s prices. Less conservative estimates put the figure at 200 MM bbls.

The Oil Minister said investments linked to Goliat would reach 28 million kroner ($4.37 billion), fueling hopes of Northern politicians that contracts will flow to local suppliers.

Tags: Eni Norge AS, Goliat, StatoilHydro