May 22, 2013 / 9:19 AM / in 5 years

CORRECTED-Talisman's faulty Yme platform to go in 2014

(Corrects 8th para to show that a new development plan would be submitted under certain conditions, Yme costs in 9th para)

* New development plan for Yme field seen in 2014-2015

* No new cost estimate yet for the project - Talisman Energy

By Gwladys Fouche

OSLO, May 22 (Reuters) - Talisman Energy expects to remove the faulty platform at its Yme oilfield in the North Sea next year and to submit a new plan for a new installation by the first half of 2015, it said in the first timeline provided since the troubled project was suspended last year.

The Canadian firm has been under fire over the development of the field, with extensive faults found on the platform that meant it could have collapsed in a storm.

Yme is one of several factors that have shaken investors’ confidence in the company, whose shares have halved since February 2011.

The problems at Yme and delays by BP and Eni have led Norwegian authorities to investigate why some major projects are running late and costing more than planned.

Yme was due to start production last year but was until now suspended indefinitely.

“The current target date for the removal is late summer 2014,” said Grethe Elise Foldnes, a spokeswoman for Talisman Energy in Norway. “This is to a large degree dependent upon safe access to the platform, availability of suitable vessels and other resources.”

Talisman aims to submit a revised development plan in the second half of 2014 or the first half of 2015, said Foldnes, at which point it would have a new cost estimate for the project.

Foldnes said a plan would be submitted provided there was a technical and economical basis for proceeding with a redevelopment.

Yme has so far cost 10-11 billion crowns ($1.72 billion-$1.89 billion), more than twice what it was supposed to. Half of those investments are related to equipment expected to be reused in a subsequent development. Had Yme started production, investments would have totalled 14 billion crowns.

Dutch maritime services group SBM Offshore, which owns the platform, has already agreed on a $470 million settlement with Talisman and partners.

The Norwegian oil ministry had set a deadline of May 1 to see a revised development plan but Talisman was unable to meet it.

Instead, it submitted an application for the examination of alternative concepts for a platform at Yme - an application the oil ministry is assessing.

Norwegian taxpayers may cover a significant part of the losses as the oil ministry provides large writedowns on oil companies’ investments, which they then recoup via taxes when a field enters production.

The oil ministry did not say how much money the Norwegian state could have to cover from the Yme losses.

“It is the operator and the licensees responsibility to plan and execute development projects on the Norwegian Continental Shelf,” said Ole Berthelsen, a spokesman for the Norwegian oil ministry.

“This must be done in accordance with applicable safety regulations, on time and within approved plans and budgets.”

Talisman Energy owns 60 percent of Yme. The other partners are Poland’s Lotos with 20 percent, Germany’s Wintershall, a unit of chemical giant BASF, with 10 percent, and Norske AEDC, a unit of AOC Arabian Oil Company, with 10 percent. ($1 = 5.8066 Norwegian kroner) (Editing by William Hardy)

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