Offshore oil platforms located in the middle of the ocean, provide a perfect storm for COVID-19: limited medical facilities, great distances from shore, and cramped quarters and bunks similar to a battleship.
Offshore platform located in the Gulf of Mexico. Limited medical facilities, great distances from ... [+]
There are anywhere from 15,000 to 16,000 people working on hundreds of manned platforms in the Gulf of Mexico and thousands of offshore facilities at any one time. The platforms are like small cities, with up to 200 people on each.
Unfortunately, drillers can’t telecommute.
As if a total collapse of the oil prices worldwide wasn’t bad enough for the industry, COVID-19 has popped up on many of these offshore rigs. In March, Norwegian oil and gas company Equinor first announced an offshore worker on a platform had contracted coronavirus in the North Sea’s Martin Linge field.
As of April 8th, the United States Coast Guard said than more than 26 workers deployed on Gulf of Mexico platforms tested positive for COVID-19 on seven of 680 platforms.
No energy facilities in the United States have been forced to shut in because of COVID-19, companies are putting contingency plans in place.
In fact, Erik Milito, President of the National Ocean Industries Association, says offshore platforms are a much safer place to be relative to the general public, adding, “Efforts to limit the spread of the virus on platforms appear to be working.” Just eleven COVID-19 cases were detected out of that 15,000 to 16,000 workforce in the first two weeks of April.
And no one has died.
“We see what we think are great results,” he said. “I think that’s due to the seriousness and the commitment we’ve seen.”
An Equinor spokesperson told Offshore Technology, “We are monitoring the situation closely and we have established procedures to handle COVID-19 cases in our operations,” including reducing manpower for non-critical tasks, downstream staff working from home, and strict travel restrictions.
The basic strategy for the industry has been to do what they can to keep sick people off the rigs, while keeping the healthy ones on board longer, lengthening work times on platforms from 14 to 21 days in an attempt to reduce turnover, although the stress to families increases.
An oil drilling platform off the coast of Santa Barbara, CA. While quarters are cramped, platforms ... [+]
Rig workers are screened and checked for temperature at the heliports and on the platforms. Some are asked to self-quarantine at home before they head out. Companies generally don't have coronavirus tests, but they're hoping their status as essential energy providers will help them acquire some.
If someone does get sick on a facility, operators have a protocol for flying people back to shore in a helicopter that is then disinfected for hours.
The global oil glut has certainly changed things in the world’s most prolific energy industry. We can’t even store anymore oil. This is one of the major intersections of public health and global economics.
Companies insist they’re not seeking government bailouts. Instead, they’re pushing innovative solutions like suspending the Jones Act as a means of decreasing the shipping costs associated with bringing their products to market. Shipping costs are the largest cost when the price of crude is so low.
The Jones Act requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by American citizens or permanent residents and generally increases costs to and from off shore sites and places like Hawaii, Alaska, Puerto Rico, and other non-continental U.S. lands.
Offshore operators have also asked the federal government to stop charging them royalties on the oil they extract. So Far President Trump has rejected that attempt.
But Trump needs to be careful. When a serious, long-term oil glut occurs, the industry tends to pick up stakes and leave certain oil fields. That’s a problem since you can’t recover those field easily or quickly.
"If we shut these wells in and they get abandoned and plugged, they're not coming back," said Tim Duncan, CEO of Talos Energy Inc., an independent producer in the Gulf of Mexico.
The industry’s pitch to Trump is that if independent offshore producers go bankrupt, marginal wells in shallow water get plugged and abandoned. The government would then not get any royalties, and job losses in Gulf states would be large, damaging the supply chain that reaches much farther into the country.
All in all, industry leaders are against shutting down offshore drilling, reminding us that some U.S. refineries are reliant on special crudes piped from Gulf of Mexico oil wells.
“We don’t believe a large-scale shutdown is needed at this point,” said Tim Tarpley, Vice President of the Petroleum Equipment and Services Association. “Our sector is very confident we’re going to defeat this virus sooner than later and we’re going to turn the country and the world’s economy back on and we’ve got to have that energy ready to go.”
