North Sea, U.S. Gulf Producers Work to Keep COVID-19 Off Platforms
The coronavirus epidemic is creating disruption for the offshore oil and gas industry, with operators working to keep COVID-19 off of their rigs and to minimize the impact on operations if it arrives. These new complications arrive as oil companies are slashing expenditures in an attempt to adapt to historically-low oil prices.
In the U.S. Gulf of Mexico, 23 cases of COVID-19 have been connected to offshore oil and gas platforms, the National Ocean Industries Association recently told Bloomberg. The virus has arrived on U.S. production rigs in several incidents. Chevron encountered two cases aboard its Big Dog platform, leading to a brief interruption in operations. At the end of March, BP reported that several workers had tested positive after a stint aboard an undisclosed platform in the U.S. Gulf. It has also affected the Bureau of Safety and Environmental Enforcement (BSEE), which has experienced three cases to date - including two who traveled to offshore installations in recent months.
The outbreak is not limited to U.S. producers. On Tuesday, the small British oil company Spirit Energy said that it has shut down production at the Chestnut field due to an outbreak of COVID-19 on board the Teekay Offshore Partners-operated FPSO Hummingbird Spirit. One confirmed case and one potential case were medevaced from the platform last week.
The news follows just weeks after Spirit completed a successful drilling campaign to extend the Chestnut field's life for three years. It also arrived on the same day that Spirit Energy's owner, Centrica, announced that it would cut Spirit's E&P budget by about 20 percent due to market conditions.
Last week, a contract worker who had been evacuated from another UK North Sea facility - Total/Eni's Elgin-Franklin complex - passed away at home after becoming ill aboard the platform. It is not known whether the death was coronavirus-related.
Rystad warns of impact on exploration
Over the medium term, the pandemic's combined operational and economic effects on the oil industry will likely reduce exploration activity. At least nine of the world’s top planned exploration wells for 2020 are at risk of being suspended as a result of the combined effect on oil and gas activities of the Covid-19 virus and the oil price war between Saudi Arabia and Russia, according to a new analysis from Rystad Energy. These wells - both onshore and off - would target a combined seven billion barrels of oil equivalent.
The wells are potential candidates for suspension because of their commercial viability under current price levels, shutdowns that affect the supplies of equipment components, operators’ prioritization among other targets and limitations in crew movements, among other reasons, Rystad said.