Eni Must Improve Safety in the Arctic -Norway Watchdog

Italian oil company Eni must do more to improve safety at its Arctic Goliat oilfield, which produces up to 100,000 barrels of crude per day, Norway's oil safety watchdog said on Tuesday.

The world's northernmost oilfield has suffered a number of incidents since it started production in March 2016.

While previous orders issued by the regulator, including a forced two-month shutdown in 2017, had led to some improvement, the Petroleum Safety Authority's latest inspection found additional problems at Goliat, it added.

"Faults and deficiencies are still (being) uncovered which, combined with the quantity of outstanding maintenance, present challenges related to handling individual and overall risks on the facility," the PSA said in a statement.

"The amount of outstanding work related to the electrical and instrumentation disciplines is relatively large. This applies to both improvements and the maintenance backlog," it added.

Eni acquired Norwegian oil firm Point Resources in July, merging it with its Norwegian subsidiary and renaming the unit Vaar Energy.

Eni holds a 69.6 percent stake in Vaar, while Norwegian private equity firm HitecVision has the remaining 30.4 percent.

Vaar took over operating the field on Dec. 10, after the PSA's letter was sent to Eni on Nov. 29. Vaar Energy has a 65 percent stake in Goliat, while Norway's Equinor holds the remaining 35 percent.

A spokesman for Vaar said that work has already started to comply with PSA's order, including increasing the number of maintenance staff.

"We will respond by the deadlines set by the PSA, and therefore can not comment on the report in detail before that," the spokesman said in an email.

The PSA said the company had to comply with the order by March 1, 2019, including drawing up "a realistic and binding plan for completing outstanding safety-critical work".

"They have a lot of work to do and they are behind... Their plans are too optimistic," a spokeswoman for the PSA said.

PSA has powers to shut down production if the company fails to comply, she added.

(Reporting by Nerijus Adomaitis, editing by Terje Solsvik and Louise Heavens)