By Sarah McFarlane and Vipal Monga
Oil majors including Chevron Corp., Exxon Mobil Corp., Royal
Dutch Shell PLC and Total SA are scrambling to cope with
coronavirus outbreaks among their workers that could threaten the
profitability of some of their largest projects.
Even as many parts of the world begin to emerge from Covid-19
lockdowns, work camps and oil platforms in remote locations, where
employees live and work in close quarters, remain vulnerable to
Shell, on Wednesday, evacuated seven workers from an offshore
platform in the Gulf of Mexico for Covid-19 testing. "Five
individuals working on a Shell-operated platform in the U.S. Gulf
of Mexico have tested positive for Covid-19," a Shell spokeswoman
said, adding the company had been testing workers before offshore
postings as of May. 20.
In recent weeks, hundreds of workers at remote oil and gas sites
have been infected with Covid-19 including in the Gulf of Mexico,
the North Sea, Mozambique, Canada and in Kazakhstan at one of the
world's largest oil fields.
The outbreaks add to the challenges oil companies face as they
try to recover from a devastating rout that saw crude prices more
than halve in the wake of world-wide lockdowns that choked off
Companies say the recent outbreaks have caused only limited
interruptions. Still, they have had to bear additional costs
related to staff safety and project delays, said Espen Erlingsen,
head of upstream research at Norway-based consulting firm Rystad
"Future revenue will be affected by this as they're not able to
execute planned activities," he said. "The main concern is how it's
influencing their cash flow."
In Kazakhstan, more than 900 oil workers have been infected with
coronavirus at the giant Tengiz oil field, according to state media
reports. The field, which produces around 600,000 barrels a day, or
0.6% of global oil output, is operated by a consortium led by
Workers were being tested when they left the field to return
home and staff at the site have been reduced by two-thirds to
around 10,000 workers over the last two months, said Chevron Chief
Executive Mike Wirth at the company's annual meeting on
"Production continues uninterrupted and we remain focused on
maintaining safe and reliable operations," a Chevron spokeswoman
Outbreaks at large oil projects could lead to production cuts,
said Chris Midgley, head of analytics with S&P Global Platts.
In Russia, oil company Rosneft, and gas producer PAO Gazprom have
reported outbreaks in Siberia, forcing them to quarantine workers
and close airports.
"If this escalates, it's a big risk," said Mr. Midgely.
Some regulators have been concerned for some time about
outbreaks at remote sites. The U.S. government discussed mandated
shutdowns of oil rigs in the Gulf of Mexico this spring but no
action was taken.
In Africa, Total shut a liquefied natural gas project in
Mozambique on the Afungi Peninsula after workers tested positive
for the virus in April. Only essential staff remain on site, a
spokesman for Total said.
BP PLC said in April that it had delayed its liquefied natural
gas plans -- including the expansion of its Tangguh project in
Indonesia and the startup of its export facility offshore
Mauritania and Senegal -- due to Covid-19, as reduced staff numbers
on sites slowed progress.
Exxon-owned Imperial Oil Ltd. has been battling an outbreak at
its Kearl Lake Canadian oil sands project in northern Alberta.
Roughly 100 infections spread out over four Canadian provinces have
been linked to the work camp by health authorities.
The virus spread at Kearl Lake despite measures the company has
taken since March to limit outbreaks. Imperial has tried to
distance workers by cutting the number of passengers on flights to
the camp and shuttle buses to leave empty seats between them. The
company also cut its staff at the site to 1,500 essential workers,
down from roughly 4,000.
An Imperial company spokesman said almost all the infected have
recovered, and there are no active cases remaining at Kearl.
Work camp and offshore rig operators can limit viral spread if
they are able to test all workers effectively and maintain proper
social distancing and sanitation, said Conor Browne, a biosecurity
consultant based in Belfast. But the close working conditions can
also cause disease to spread quickly if an infection invades. "When
the infection gets in, you've got a big problem," said Mr.
Norway's largest company, energy giant Equinor ASA -- formerly
known as Statoil -- made efforts in April to keep its expansion of
the Snorre project on the Norwegian continental shelf on track.
Using the world's largest floating crane to move equipment onto the
platform with specialist workers, crews kept their distance by
building a tent to temporarily house the crane workers.
Equinor has also cut personnel offshore to enable social
distancing after a staff member working on the Martin Linge oil and
gas field in the North Sea was airlifted to land with symptoms and
tested positive in March. The company decided to reduce the number
of people working offshore, cutting offshore Norway personnel to
4,000 from 6,000 within a few days. It hasn't had any other
offshore cases in Norway.
For workers on platforms, day-to-day life changed immediately as
offshore rotations extended to three weeks instead of two. Communal
areas were deemed off limits.
Workers were creative about how they coped with the chang. With
gyms closed, exercise bikes were moved onto helipads, which were
also turned into a space for running and yoga classes. Fishing
became even more popular and Saturday night bingo was transmitted
via radio into everyone's cabins.
"A tape measure was probably one of the most important tools we
had in the first days," said Jez Averty, Equinor's senior vice
president for operations in the southern North Sea.
--Collin Eaton contributed to this article.
Write to Sarah McFarlane at email@example.com and Vipal
Monga at firstname.lastname@example.org
(END) Dow Jones Newswires
May 28, 2020 11:19 ET (15:19 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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