Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
By Jennifer A. Dlouhy and David Wethe (Bloomberg) — Inside more than a thousand offshore drilling rigs and oil production platforms that dot the Gulf of Mexico, workers navigate narrow corridors, sleep in shared rooms and dine in crowded mess halls.
It’s an environment designed for efficiency — not for keeping a lethal coronavirus at bay.
“There’s no way to do social distancing on a rig,” said Tim Tarpley, vice president of the Petroleum Equipment and Services Association.
That’s led to worries about the safety of the sites, the biggest of which resemble mini-cities with as many as 200 workers, and the nation’s dependence on their output. Oil wells in the U.S. Gulf of Mexico supply about 2 million barrels of crude a day, or 15% of U.S. production.
Similar coronavirus concerns are affecting other energy businesses that rely on employees sleeping in cramped conditions on site — from oil worker camps in North Dakota and Alaska’s North Slope to an aluminum smelter in Canada and copper mines in the Chilean desert.
There have been notable outbreaks in other close quarters too, including the aircraft carrier USS Roosevelt and cruise ships, underscoring the challenge of containing a virus that spreads easily.
The practical complication of extracting oil amid the coronavirus pandemic is only the latest headwind for an industry already reeling. Oil prices have crashed as Russia and Saudi Arabia engage in a price war even as the virus causes demand to plummet.
In response to the outbreak, offshore operators have stepped up screening and cleaning, lengthened job assignments and subjected workers to isolation periods. Some officials have even gamed out hypothetical scenarios that include shutting down operations if the pandemic spreads.
For now, the focus is on staying “fully operational,” Interior Secretary David Bernhardt told industry representatives in a conference call Friday, according to two people familiar with the discussion. Bernhardt also said he was deploying Interior’s top offshore drilling regulator, Scott Angelle, to Louisiana, in an effort to keep outer continental shelf oil operations running and ensure a nimble agency response.
There have been at least 23 positive coronavirus cases tied to offshore oil and gas facilities, according to the National Ocean Industries Association. That may correspond with a rapid rise in cases in Louisiana, the home base for many Gulf oil operations and offshore workers.
“The only option is you’ve got to clear everybody before they get on,” the petroleum association’s Tarpley said. “You’ve got to make sure you don’t get positive folks out on the rig.”
The sickness has already interrupted some activities. After two employees on the Chevron Corp.-operated Big Dog platform in the Gulf of Mexico tested positive, drilling operations were temporarily suspended.
The Interior Department’s Bureau of Safety and Environmental Enforcement, which polices offshore drilling, has had three of its employees test positive. One is a contractor; another last traveled offshore Feb. 28; and the third employee’s most recent trip offshore was March 9.
“The health and safety of the public, operators and our employees is our number one priority,” said Interior spokesman Nick Goodwin. “We continue to take numerous proactive measures.”
The logistical headaches of the coronavirus have consumed Jeremy Thigpen since its appearance in Southeast Asia.
Thigpen, the chief executive officer of Transocean Ltd., the world’s biggest owner of deepwater oil drilling rigs, quickly instituted temperature checks and other health screenings at heliports around the globe before any workers fly out to its 30 contracted rigs in nine countries.
“With travel restrictions changing daily, with flight cancellations happening every minute,” there are major “challenges associated with changing out crews and delivering supplies to these operations,” Thigpen said March 31 on a webinar hosted by Evercore ISI. “Cycling these people out every three weeks in that environment is an unbelievable challenge, which we’ve managed well.”
As of March 31, Transocean had limited it exposure to one coronavirus case on one of its rigs off the coast of Brazil.
“We quickly identified it, quickly identified the people that individual had come in contact with. I think it was 19 people in total that we got off the rig pretty quickly,” he said. “It becomes more challenging every day as this spreads and as regulators and government bodies react to it with new precautions and new restrictions. But so far, so good, knock on wood.”
The small drilling shack on a rig is akin to the control room in a power plant or other onshore energy facility, said Erik Milito, president of the National Ocean Industries Association. “They are all tight quarters,” he said. “You’re not going to shut those down.”
The typical offshore rig or drillship is both a floating community and a manufacturing facility home to 120 to 200 people at any one time. Workers generally rotate on and off in multiweek shifts, though some specialists will do quick one-day jaunts to the sites.
Right now, there are 18 drilling rigs in the Gulf along with more than 1,000 production facilities pumping oil and gas, ranging from small unmanned sites to hulking structures more than a hundred miles from shore.
Oil companies and drilling contractors already have protocols for dealing with the spread of flu and gastrointestinal ailments on board. Now they have developed a slate of voluntary best practices for the coronavirus that include intense cleaning regimens and screening workers before they board helicopters. At heliports along the Gulf Coast, temperature scans are now as common as weight checks for oil workers heading offshore.
Yet because some people infected with Covid-19 show no symptoms, relying on thermometers and health questionnaires won’t catch everyone who is sick. Industry leaders are pressing for broad virus testing of offshore oil workers, once those tests are widely available and front-line health workers have what they need.
“In a perfect world, you really have to test everybody going out on a rig or on a helicopter, and then you know you’re clean,” Tarpley said. In the meantime, more companies are requiring 14-day isolation periods before heading offshore, he said.
Some companies have extended work assignments to limit turnover, so that some employees are now doing 28-day shifts on board, Milito said. And when workers develop symptoms, they are swiftly isolated and whisked away in helicopters by crews wearing protective equipment, Milito added.
The closely held Houston helicopter company Bristow Group Inc. said Friday it had made about 40 flights in the Gulf of Mexico carrying offshore oil workers who were potentially infected with the coronavirus.
The company, which regularly flies workers back to shore ahead of approaching storms in the Gulf, has been making coronavirus-related trips since late January using specially configured search-and-rescue aircraft.
For now, industry leaders are lobbying against shutting down offshore drilling, pointing out that some refineries in Louisiana and Texas 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, Tarpley said. “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.”
–With assistance from Kevin Crowley and Ari Natter.(c) Copyright Thomson Reuters 2019.
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