Goliat – an important part of the development in the High North

Today, the Norwegian Government has approved the plan for development and operation (PDO) for the Goliat field. The PDO is now being submitted to the Parliament.

-Goliat is the first oil field in the Barents Sea to be developed. Goliat represents one of the largest industrial projects ever undertaken in the High North (Northern Norway). The development of Goliat will provide revenues to the Norwegian society, result in local spin-off effects, and will directly and indirectly create approximately 500 jobs in the county of Finnmark for a period of fifteen years, says the Minister of Petroleum and Energy Terje Riis-Johansen.

The operator’s regional office with business functions will be situated in the city of Hammerfest, and the helicopter terminal and supply base will be located in the area around Hammerfest. The operator will adapt the contract strategy for modification and maintenance contracts, so that local suppliers will be more able to compete for these contracts. Sustainable development of the petroleum resources is a key factor in the Government’s strategy for the High North. Based on previous experience from petroleum activities, it is estimated that Goliat can provide about 500 jobs in the region during the operating phase.

Investments related to Goliat are estimated to about NOK 28 billion. The field holds approximately 174 million barrels of oil in reserves. Considering the current oil price-level, this amounts to a commercial value of NOK 60 billion.

Goliat will fulfill the high environmental requirements established through the Integrated Management Plan for the Barents Sea. Arrangements have been made to provide good co-existence with fisheries. Due to the specific challenges in this area, oil-spill preparedness is given high priority. The operator will carry out measures in order to fortify oil-spill preparedness in affected municipalities, such as Måsøy, Hasvik and Nordkapp. The Goliat field is also subject to quota obligations for greenhouse gases and CO2-tax. A vast part of the energy utilization will be provided by the onshore power grid from the start-up. A process has been initiated in order to reduce the use of the gas turbine on Goliat, when the power situation in Finnmark allows it. Statnett will submit a license application to NVE regarding a new transmission line between Balsfjord and Hammerfest within May 2009. The transmission system is important for development of renewable energy and other business activity in the region.

-Goliat is subjected to high environmental requirements. It will fulfill the Integrated Management Plan for the Barents Sea requirements, such as zero discharges to sea. It has been important to me that Goliat shall be able to be provided with energy from land. This is accomplished. The power situation in Finnmark does not allow Goliat to be run exclusively on electricity from land from the time of production start-up. However, I have started a process so that this will be feasible in 2017, says the Minister of Petroleum and Energy Terje Riis-Johansen.

Preparations are being made to strengthen the central power grid in the Hammerfest area in 2017, with reservations concerning license processing. The licensees on Goliat will report its power consumption regarding full electrification from 2017. Conditions have been set to the licensees to present a layout related to increased usage of electricity from land, as soon as the power situation in the area is strengthened, within January 1th 2019.  

It is the licensees Eni Norway AS and StatoilHydro Petroleum AS, which have presented the plan for development and operation (PDO). In the PDO, the licencees have reservations concerning the profitability of the project, before assigning contracts.