OSLO (Bloomberg) -- Eni SpA, Italy’s biggest energy company, and StatoilHydro ASA got approval from Norway’s government to develop the first oilfield in the country’s Arctic.

The government recommended the development of the Goliat field, off Norway’s northern tip, and will send it to parliament for approval, Oil and Energy Minister Terje Riis-Johansen said in Oslo on Friday. The project is estimated to cost 28 billion kroner ($4.3 billion).
“The Barents Sea will be an important part of Norway’s petroleum industry going forward,” he said at a press conference. “We have a development in the Norwegian petroleum industry where oil production is falling. It’s falling fast.”
Norway, the world’s fifth-largest oil exporter, is opening more of its unexplored north to drilling as oil output sinks in the North Sea. Goliat, discovered in 2000, is estimated to hold 174 million barrels of oil, the government said on Friday.
Eni is the operator and owns 65 percent, while StatoilHydro holds the rest. Should the parliament give approval, construction will start next year and production in 2013, according to an Impact Assessment Plan. The field is expected to be in production for as many as 20 years, according to Eni.
------------New licenses
About 25 percent of the recoverable resources on Norway’s continental shelf have yet to be discovered and only about 50 percent is open for exploration, according to the Petroleum Directorate. Norway’s Barents Sea may hold 1.03 billion cubic meters of oil equivalent in undiscovered oil and gas. About 53 percent is gas, equal to about five times Norway’s annual output, according to the directorate.
Norway awarded 21 new exploration licenses last week in the country’s 20th licensing round, including 9 in the Barents Sea, out of which 3 were to Eni. In total, 34 companies were awarded blocks, including Total SA, Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell Plc.
State-controlled StatoilHydro is the only producer in the Barents Sea, with the Snohvit natural gas field.
Eni in February chose Sevan Marine ASA’s Sevan 1000 floating production, storage and offloading vessel, or FPSO, model for Goliat. The company still has to award contracts for engineering, procurement and construction of the vessel.