Eni Needs Union Approval to Restart Arctic Oil Field

OSLO—The world's northernmost offshore oil field could restart production within two weeks following its shut down last month, said Eni SpA, but the decision still needs labor-union approval as authorities step up pressure on the Italian oil producer to improve its record.

"Production will resume when all parties decide it is right to do so, realistically within a couple of weeks," Eni said in a news release after meeting Friday with Norway's Petroleum Safety Authority, project partner Statoil ASA and worker representatives.

Eni shut down the 100,000-barrels-a-day field and evacuated the platform of dozens of workers after a power loss two weeks ago. The safety authority subsequently ordered the operator to fix numerous problems at the platform.

"We are happy that Eni has chosen to keep production shut down until measures have been taken to ensure the safe operation of the platform," said a Petroleum Safety Authority spokeswoman. "That means we don't have to demand operations to be shut down."

In Friday's meeting with the authority, Eni said it presented a report on an internal investigation into the power loss, concluding that gas had been detected in an area of the platform and the power supply had been shut down to avoid ignition.

The company said it had chosen to keep production on hold until it can address safety concerns raised by workers. Eni said it had established a team of managers and unions representatives that would cooperate to ensure that the platform is safe.

In June, union representatives alerted the government safety authority about concerns at Goliat, questioning the functionality of the backup power system that is supposed to kick in during power loss and addressing a lack of cooperation with management, some of whom allegedly didn't speak English or Scandinavian languages well.

The safety authority said operations at Goliat would be allowed to resume only when unions agreed that the platform was safe to operate.

The Goliat crew has scrambled to life boats several times this year, following power losses, smoke detection, gas leaks and false alarms, according to official documents reviewed by The Wall Street Journal. The safety agency has issued three orders to Eni to improve its operations, and in June launched an investigation after a worker was injured by a steel wire.

Eric Sylvers in Milan contributed to this article.

Write to Kjetil Malkenes Hovland at [e-mail]

(END) Dow Jones Newswires

September 09, 2016 14:15 ET (18:15 GMT)

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