Fitch Solutions: Coronavirus to present unique challenges to upstream operators

Oil&Gas Materials 13 March 2020 10:14 (UTC +04:00)
Fitch Solutions: Coronavirus to present unique challenges to upstream operators

BAKU, Azerbaijan, March 13

By Leman Zeynalova – Trend:

Coronavirus will present unique challenges to upstream operators, Trend reports with reference to Fitch Solutions Country Risk and Industry Research (a unit of Fitch Group).

“The spread of Covid-19 globally will present unique challenges to upstream operators with disruption to the labour force and precautionary measures adding operational costs at a number of upstream facilities globally. Upstream oil and gas facilities tend to have significant workforces on-site with shared living and leisure facilities, making some operations more susceptible to disruption from events such as with Covid-19,” the company said in its report.

The report says that the threat of operational disruption from Covid-19 is intensified at offshore facilities where there is a broad risk of disruption from the latest outbreak.

“Containing contagious diseases on isolated offshore platforms presents even more challenging circumstances for oil and gas companies, with typically a high density of workers within a confined space,” said the company.

Fitch Solutions recalled that on March 11, Norwegian state oil company Equinor reported that a worker on the Martin Linge offshore installation off the country's west coast had tested positive for coronavirus; this is the first reported incidence at an offshore field, testing is also being undertaken at other Norwegian offshore sites including Osberg and Gullfaks.

“Equinor has suspended flights to and from the Martin Linge project and has stated it will reduce activity at the field and take action on reducing meetings and implementing some ‘social distancing’ tactics. Whilst the incident reported by Equinor appears to be minor at present, the case serves as to highlight the potential risk to typical offshore operations should an outbreak of Covid-19 occur over a much broader scale with more employees infected,” reads the report.

In a worst case scenario Fitch Solutions recognizes the risk of unplanned outages across several offshore installations, with temporary shutdowns to ensure workers are safe and those affected are treated properly.

“Across the North Sea in particular, should the number of cases at offshore installations increase we see risk of intervention or strike action from the UK and Norway's powerful oil labour unions. Whilst the incidence, spread and attention of Covid-19 is unprecedented, oil and gas companies typically have some experience in managing epidemics and health related incidents on platforms and at their operations,” reads the report.

Contingency planning for the latest outbreak is well underway in the industry more broadly, including airport style health screening and management of employees travelling in from ‘high risk areas’, said the company.

“At this stage, we see it as unlikely for wide scale unplanned shutdowns on a scale to make a notable impact on hydrocarbon production or the global oil price to occur.”


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