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COVID-19 Considerations Know No Borders in Oil & Gas

COVID-19

Forbes – Much has been reported about the many impacts the COVID-19 pandemic has had on the U.S. oil and gas industry, as companies have grappled with not just the collapse in commodity prices that have resulted, but also the restrictions under which they must run their offices and field operations in order to mitigate the spread of the virus. Much less has been written about it, but U.S. companies operating internationally have also had to cope with similar considerations, given that the virus knows no borders.

This is certainly true in the South American country of Guyana, where a consortium led by ExxonMobil has continued its efforts to develop the massive offshore oil discovery, Stabroek Block. Offshore operations that are extremely expensive and complex become even moreso in the midst of what has become a four month-long global emergency situation.

Start with the fact that one big step the Guyanese government has taken to control the spread of the virus was to shut down commercial air travel in and out of the country. This created the need for ExxonMobil and its Consortium partners, Hess and CNOOC, to make special, costly arrangements to move workers who work weeks-on/weeks-off shifts into and out of Guyana.

As reported by the Guyana Times, ExxonMobil first had to set up a special facility approved by the Public Health Ministry at which incoming workers are quarantined for 14 days upon entering the country before they can go to work. On April 29, one shift of these workers arrived direct from London’s Heathrow Airport on a specially-chartered British Airways Boeing 787 Dreamliner. Obviously, all flights in and out of Guyana’s Cheddi Jagon International Airport must be pre-cleared by the Guyana Civil Aviation Authority.

As it worked with authorities to iron out the details of how to deal with the travel restrictions and screening and quarantine requirements, the Consortium was forced to temporarily suspend drilling operations at two of its drill ships. But those were recently restored:

“We have been able to make adjustments to ensure our workforce remains safe as we maintain some amount of continuity, Deedra Moe, Senior Director of Public and Government Affairs, said. “Operations on two of our drillships, the Stena Carron and the Noble Tom Madden, which were temporarily suspended, are now back to full operations as we are able to increase the number of rotational offshore crew passing through our screening process.”

Early actions taken by the Guyanese government have helped to severely limit the spread of COVID-19 in the country. As of June 12, the Stabroek News reports that the nation of 800,000 has experienced just 158 total cases and 12 deaths attributable to the virus.

Keeping the pandemic under control and ensuring the Consortium’s activities do not contribute to it is obviously in everyone’s best interests. As I’ve reported previously, the Stabroek discovery represents a potential society-transforming event for the tiny nation. With more than 8 billion barrels in reserves already proved to be in place and production expected to ramp up to as much as 750,000 barrels of oil per day by 2025, the Guyanese government stands to benefit from many billions of dollars in new income under the current revenue sharing agreement. Even with the collapse in crude prices in recent months, Guyana has already received $95 million since first production occurred in January.

In late April, the Constortium stepped up to provide more financial assistance to the country, pledging donations totaling more than $60 million to local organizations like the Civil Defence Commission (CDC), Salvation Army and Rotary Guyana that are engaged in COVID-19 mitigation efforts.

Tim Chisholm, Hess Vice President of Exploration, said that his company engages in this kind of local support effort wherever it operates, adding, “As part of the Stabroek Joint Venture, our focus is on providing hospitals and clinics with the medical supplies and equipment needed for the fight against COVID-19, and on helping the populations most vulnerable to its impact with food and other necessities.”

With efforts to control the coronavirus going as smoothly as could be expected, the recently-conducted national elections remain under a cloud of uncertainty. Both incumbent President David Granger and the opposition APNU+AFC, along with many international observers, continue to allege irregularities in the voting process, even after the finally vote tallies were published. The outcome now moves into the nation’s courts, and the ultimate outcome could impact the future terms of the revenue sharing agreement with Consortium.

But for now, ExxonMobil and its partners continue to move ahead with developing the richness of the Stabroek Block, even amid all the restrictions and costs imposed by COVID-19. Because the magnitude of the treasure at stake makes all the extra efforts worth taking.

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