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| Will the Coronavirus Pandemic Doom North Sea Oil? | Will the Coronavirus Pandemic Doom North Sea Oil? |
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| For decades, the oil rigs rising out of the North Sea off Scotland provided Britain with hundreds of thousands of jobs in a thriving industry and billions in tax revenue. | For decades, the oil rigs rising out of the North Sea off Scotland provided Britain with hundreds of thousands of jobs in a thriving industry and billions in tax revenue. |
| Much of that now seems a memory. The collapse in oil prices from the coronavirus pandemic, coupled with infections aboard the drilling rigs, are imperiling the vast industry that sprawls across the waters off Scotland and Norway. | Much of that now seems a memory. The collapse in oil prices from the coronavirus pandemic, coupled with infections aboard the drilling rigs, are imperiling the vast industry that sprawls across the waters off Scotland and Norway. |
| Oil companies are shelving investments worth billions of dollars. Staffing on the rigs has been cut, partly to reduce costs but also to provide some degree of social distancing on the often crowded platforms, putting those jobs at risk. At least two offshore workers have tested positive for coronavirus. | Oil companies are shelving investments worth billions of dollars. Staffing on the rigs has been cut, partly to reduce costs but also to provide some degree of social distancing on the often crowded platforms, putting those jobs at risk. At least two offshore workers have tested positive for coronavirus. |
| “We have gone through commodity swings and cycles of that nature, but this one is different,” said Jim House, chief executive of Neptune Energy, a private equity-backed oil and gas firm with production in both British and Norwegian waters. “We have never seen a world completely shut down,” he added. | “We have gone through commodity swings and cycles of that nature, but this one is different,” said Jim House, chief executive of Neptune Energy, a private equity-backed oil and gas firm with production in both British and Norwegian waters. “We have never seen a world completely shut down,” he added. |
| More important, though, may be the impact on the future of the North Sea oil and gas industry. Its health depends on finding new undersea fields and bringing them into production, but if prices remain low, as some analysts think likely, that won’t happen. | More important, though, may be the impact on the future of the North Sea oil and gas industry. Its health depends on finding new undersea fields and bringing them into production, but if prices remain low, as some analysts think likely, that won’t happen. |
| The price of Brent crude, which was named for a North Sea oil field, has fallen by about 70 percent this year to just over $20 a barrel. Another type of crude, West Texas intermediate, shocked the industry when it fell into a negative price earlier this week. | The price of Brent crude, which was named for a North Sea oil field, has fallen by about 70 percent this year to just over $20 a barrel. Another type of crude, West Texas intermediate, shocked the industry when it fell into a negative price earlier this week. |
| “There are a lot of undeveloped fields in the North Sea, “ said Alexander Kemp, a professor of petroleum economics at the University of Aberdeen. At the very low prices seen this year, he said, “a lot of them won’t be viable.” | “There are a lot of undeveloped fields in the North Sea, “ said Alexander Kemp, a professor of petroleum economics at the University of Aberdeen. At the very low prices seen this year, he said, “a lot of them won’t be viable.” |
| If so, the vast network of businesses that depend on the industry, from drillers and undersea pipe layers to providers of offshore living quarters known as floatels, could atrophy. | If so, the vast network of businesses that depend on the industry, from drillers and undersea pipe layers to providers of offshore living quarters known as floatels, could atrophy. |
| “A longer term concern is perhaps jobs will be deemed not necessary,” said Dave Stewart, a senior executive at Wood, an Aberdeen-based energy services company that employs more than 10,000 people in Britain. “At $30 oil, you are not going to see a lot of investment.” | “A longer term concern is perhaps jobs will be deemed not necessary,” said Dave Stewart, a senior executive at Wood, an Aberdeen-based energy services company that employs more than 10,000 people in Britain. “At $30 oil, you are not going to see a lot of investment.” |
| Innes Auchterlonie, co-founder and managing director of Imrrand, which crunches data to help streamline maintenance on offshore platforms, said he is faring well in the most turbulent conditions that the oil industry has seen in decades. Still, two of his contracts for work in the North Sea were recently canceled, and he worries about what may lie ahead for his company, which employs 45 people. | Innes Auchterlonie, co-founder and managing director of Imrrand, which crunches data to help streamline maintenance on offshore platforms, said he is faring well in the most turbulent conditions that the oil industry has seen in decades. Still, two of his contracts for work in the North Sea were recently canceled, and he worries about what may lie ahead for his company, which employs 45 people. |
| “My fear is how long can we sustain it?” he said, noting that oil companies are even cutting services like his that could save them money. “I know what it’s like when you are hemorrhaging cash,” he added. | “My fear is how long can we sustain it?” he said, noting that oil companies are even cutting services like his that could save them money. “I know what it’s like when you are hemorrhaging cash,” he added. |
| The crash in prices is likely to have wide-reaching implications for tax revenue, employment and the prosperity of oil-dependent cities like Aberdeen. Since the 1960s, the former fishing port, with distinctive granite buildings ringing a busy harbor, has thrived as an oil hub. | The crash in prices is likely to have wide-reaching implications for tax revenue, employment and the prosperity of oil-dependent cities like Aberdeen. Since the 1960s, the former fishing port, with distinctive granite buildings ringing a busy harbor, has thrived as an oil hub. |
| The city, with a population of about 200,000, and its surrounding region outpaces both Scotland and Britain overall in metrics like economic output per capita and employment. | The city, with a population of about 200,000, and its surrounding region outpaces both Scotland and Britain overall in metrics like economic output per capita and employment. |
| Now local leaders say the oil industry’s second steep downturn in six years may accelerate changes already underway. Some workers are relocating to offshore oil projects in places like Brazil or Angola, where their skills are valuable in newer fields. Others are turning to cleaner energy, like offshore wind and hydrogen. | Now local leaders say the oil industry’s second steep downturn in six years may accelerate changes already underway. Some workers are relocating to offshore oil projects in places like Brazil or Angola, where their skills are valuable in newer fields. Others are turning to cleaner energy, like offshore wind and hydrogen. |
| “Everyone accepts there will be a big impact,” said Barney Crockett, a Labour Party politician who serves as lord provost, or mayor, of Aberdeen. “We will definitely see a bigger emphasis on nonfossil energy. “ | “Everyone accepts there will be a big impact,” said Barney Crockett, a Labour Party politician who serves as lord provost, or mayor, of Aberdeen. “We will definitely see a bigger emphasis on nonfossil energy. “ |
| British waters are still productive, producing 1.7 million barrels a day — three-quarters of Britain’s oil consumption and half of its natural gas needs. But veterans of the North Sea oil industry now say that the world that emerges after the lockdowns may be different — less reliant on driving, flying and other habits that stoke the need for oil. | British waters are still productive, producing 1.7 million barrels a day — three-quarters of Britain’s oil consumption and half of its natural gas needs. But veterans of the North Sea oil industry now say that the world that emerges after the lockdowns may be different — less reliant on driving, flying and other habits that stoke the need for oil. |
| “Demand will come back, but it won’t come back fast,” said Mike Tholen, director of sustainability at Oil and Gas UK, which represents the North Sea industry. “We may be in an era of having seen peak oil demand,” he added. | “Demand will come back, but it won’t come back fast,” said Mike Tholen, director of sustainability at Oil and Gas UK, which represents the North Sea industry. “We may be in an era of having seen peak oil demand,” he added. |
| Analysts say that governments will likely continue to promote measures to tackle climate change by cutting carbon-dioxide emissions, which means reduced demand for oil. | Analysts say that governments will likely continue to promote measures to tackle climate change by cutting carbon-dioxide emissions, which means reduced demand for oil. |
| “Crises tend to bring forward trends that were already in place,” said Martijn Rats, an oil analyst at Morgan Stanley, an investment bank. | “Crises tend to bring forward trends that were already in place,” said Martijn Rats, an oil analyst at Morgan Stanley, an investment bank. |
| Already, oil companies are delaying projects that represent the region’s future. Siccar Point, a drilling company backed by Blackstone, the giant fund manager, and Royal Dutch Shell, Europe’s largest oil company, recently delayed what was anticipated to be the British North Sea’s premier project this year: the estimated $3 billion first phase of a field called Cambo. | Already, oil companies are delaying projects that represent the region’s future. Siccar Point, a drilling company backed by Blackstone, the giant fund manager, and Royal Dutch Shell, Europe’s largest oil company, recently delayed what was anticipated to be the British North Sea’s premier project this year: the estimated $3 billion first phase of a field called Cambo. |
| “It makes sense to hold off final approval until some normality returns to the market,” said Siccar’s chief executive, Jonathan Roger, in a statement. Analysts at Rystad Energy, a consultancy, had estimated that the project would require around 1,000 engineers and technicians. | “It makes sense to hold off final approval until some normality returns to the market,” said Siccar’s chief executive, Jonathan Roger, in a statement. Analysts at Rystad Energy, a consultancy, had estimated that the project would require around 1,000 engineers and technicians. |
| Projects are being postponed not just for economic reasons but because of worries about safety, analysts say. | Projects are being postponed not just for economic reasons but because of worries about safety, analysts say. |
| Offshore platforms are a focus of unease amid the coronavirus pandemic. Workers are flown out by helicopter and spend two- to three-week shifts on the rigs, sleeping in small rooms sometimes shared with a colleague. | Offshore platforms are a focus of unease amid the coronavirus pandemic. Workers are flown out by helicopter and spend two- to three-week shifts on the rigs, sleeping in small rooms sometimes shared with a colleague. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| The industry has begun health checks at the heliports and reducing numbers on the platforms. Usually about 11,500 workers are on the platforms at any time; that number has been cut by about 4,000, partly to ease crowding, but workers say it is still not easy to maintain the recommended social-distancing rules. | The industry has begun health checks at the heliports and reducing numbers on the platforms. Usually about 11,500 workers are on the platforms at any time; that number has been cut by about 4,000, partly to ease crowding, but workers say it is still not easy to maintain the recommended social-distancing rules. |
| Oil workers “are very concerned about being offshore,” said John Boland, a Scotland regional officer of the Unite union, which represents industry employees. | Oil workers “are very concerned about being offshore,” said John Boland, a Scotland regional officer of the Unite union, which represents industry employees. |
| On April 2, a worker who became ill and later tested positive for coronavirus was flown by helicopter from Clair Ridge, a BP field in waters north of Scotland. BP temporarily halted drilling in order to isolate others. (The worker has since been released from the hospital.) | On April 2, a worker who became ill and later tested positive for coronavirus was flown by helicopter from Clair Ridge, a BP field in waters north of Scotland. BP temporarily halted drilling in order to isolate others. (The worker has since been released from the hospital.) |
| The pandemic is the second shock to the region in just six years. After oil prices crashed in 2014, Britain’s North Sea operators slashed costs and profits rose, but investment is about a quarter of 2014 levels. The number of jobs supported by the oil industry — about 270,000 — is just 60 percent of what it was in 2013. | The pandemic is the second shock to the region in just six years. After oil prices crashed in 2014, Britain’s North Sea operators slashed costs and profits rose, but investment is about a quarter of 2014 levels. The number of jobs supported by the oil industry — about 270,000 — is just 60 percent of what it was in 2013. |
| Neivan Boroujerdi, an analyst at Wood Mackenzie in Edinburgh, said investors are now shying away from oil, especially from British waters, where production costs are relatively high. Companies like Chevron and Conoco Phillips had sold stakes in the area before the latest price collapse. | Neivan Boroujerdi, an analyst at Wood Mackenzie in Edinburgh, said investors are now shying away from oil, especially from British waters, where production costs are relatively high. Companies like Chevron and Conoco Phillips had sold stakes in the area before the latest price collapse. |
| “The North Sea has a challenge to attract any kind of capital,” Mr. Boroujerdi said. | “The North Sea has a challenge to attract any kind of capital,” Mr. Boroujerdi said. |
| Operators in Norwegian waters within easy reach of Aberdeen are also slashing costs, but Mr. Boroujerdi said that Norway had more oil and gas left in its fields than Britain. The handful of companies that dominate in this area, led by state-controlled Equinor, would likely try to protect Norwegian investments, cushioning the blow of market turmoil, he said. | Operators in Norwegian waters within easy reach of Aberdeen are also slashing costs, but Mr. Boroujerdi said that Norway had more oil and gas left in its fields than Britain. The handful of companies that dominate in this area, led by state-controlled Equinor, would likely try to protect Norwegian investments, cushioning the blow of market turmoil, he said. |
| Oil and gas was once a major source of tax revenue for Britain, but no longer. Annual tax revenues paid to the British government dwindled from about 11 billion pounds to just over £1 billion last year. Analysts say the industry, facing steep financial losses, may not pay any taxes on production this year. | Oil and gas was once a major source of tax revenue for Britain, but no longer. Annual tax revenues paid to the British government dwindled from about 11 billion pounds to just over £1 billion last year. Analysts say the industry, facing steep financial losses, may not pay any taxes on production this year. |
| Most British oil and gas fields are in what would likely be Scottish waters if the independence movement there succeeds. Scottish nationalists once argued that gaining control of the tax revenues would be a boon from independence, but that argument is dead now. | Most British oil and gas fields are in what would likely be Scottish waters if the independence movement there succeeds. Scottish nationalists once argued that gaining control of the tax revenues would be a boon from independence, but that argument is dead now. |
| Sir Ian Wood, who helped establish the North Sea as a vital source of oil, has been trying for several years to prepare the region for the inevitable decline of the industry he helped create. | Sir Ian Wood, who helped establish the North Sea as a vital source of oil, has been trying for several years to prepare the region for the inevitable decline of the industry he helped create. |
| In the late 1960s, just as drilling began in the region, Mr. Wood, who worked for a family ship repair business, started to service oil equipment. He built the company now called Wood into a global energy contractor and became one of Scotland’s richest residents. | In the late 1960s, just as drilling began in the region, Mr. Wood, who worked for a family ship repair business, started to service oil equipment. He built the company now called Wood into a global energy contractor and became one of Scotland’s richest residents. |
| Mr. Wood, 77, who has retired as chairman, is now looking beyond oil. Through his family foundation he is financing an organization called Opportunity North East that aims to make the most of the region’s skills in new areas like offshore wind and hydrogen. | Mr. Wood, 77, who has retired as chairman, is now looking beyond oil. Through his family foundation he is financing an organization called Opportunity North East that aims to make the most of the region’s skills in new areas like offshore wind and hydrogen. |
| “That should in theory carry on forever if renewable energy is what it is,” he said. | “That should in theory carry on forever if renewable energy is what it is,” he said. |