A number of recent Norwegian Continental Shelf (NCS) projects have experienced significant delays due to safety deficiencies, which must be corrected before they can be put into operation on the NCS.

These delays have cost both the actual companies and the Norwegian government a lot of money.

Now Eni Norge reports that Goliat is delayed as well.

Cost increase of 2,5 billion NOK

By agreement with the partners in the Goliat licence, and due to the delay in the delivery of the production platform, Eni Norge has decided to postpone production start-up at the Goliat field until the third quarter of 2014, according to a press release from the company.

When the Plan for development and operation (PDO) was submitted, the estimated start-up of the Goliat field was set to Q4 2013.

Most key project areas are progressing as planned, Eni Norge reports. However, the development of the production facility has met challenges and increased complexity. These are mainly associated with technological innovations of the production facility.

Based on agreement in the Goliat licence the scheduled departure from the Hyundai Heavy Industries’ yard is postponed to end 2013/Q1 2014.

The progress of the other main activities for the development of Goliat will be maintained despite the delay of the production facility.

The expected cost increase, due to the postponing of the production start-up, is estimated to ca 2,5 billion NOK (USD 421 million) as a result of the delay.

Increase of investment cost

Eni Norge has previously informed the Ministry of Petroleum and Energy of an increase of  investment cost of ca 3,7 billion NOK. This is mainly linked to an increase in marked prices, longer delivery time for several equipment packages and increased process for raw materials due to heavy pressure in the supplier industry.

The investment cost for the Goliat development is now estimated to ca 36,7 billion NOK (USD 6,2 billion). The original development cost was estimated to 30,5 billion NOK (USD 5,1 billion).

Eni Norge is the operator of the field (65%) with Statoil as its partner (35%). According to plan, Goliat will produce 170 million barrels of oil over a period of 15 years.

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