(C) Reuters. FILE PHOTO: Crew members look over idle oil rigs in the Gulf of Mexico near Port Fourchon, Louisiana
By Erwin Seba and Gary McWilliams
HOUSTON (Reuters) – Major energy companies in the United States imposed work-from-home rules for office staff and began health checks for remote or critical workers as coronavirus spread and threatened an industry reeling from falling demand and profits.
BP (LON:BP), Exxon Mobil (NYSE:XOM), Kinder Morgan , Motiva Enterprises and Royal Dutch Shell (LON:RDSa) told most office staff to work from home starting Monday. Federal regulators on Friday were pressed by companies to ease work rules for pipeline operators and to limit visits to some sites. Shell and Chevron (NYSE:CVX) began health checks of workers and visitors at some key U.S. facilities, spokesmen said.
Offshore rigs, refineries and pipelines require on-site teams and group workers in close quarters, making them vulnerable in a Covid-19 outbreak. They cannot be run remotely and health checks could prevent forced shutdowns that could lead to big losses or local fuel shortages.
The pandemic has infected more than 156,000 people worldwide including some 2,900 people in the United States, killed more than 5,800 globally and slashed fuel demand amid shuttered schools, churches, offices and some retail stores.
There is only one known case of Covid-19 to hit a U.S. refinery. Marathon Petroleum Corp (NYSE:MPC), the nation’s largest refiner by capacity, removed some staff at a California plant after an employee became ill. Norwegian oil firm Equinor halted a North Sea development project and removed staff after an offshore worker fell ill.
Falling oil demand and a price-war that slashed crude prices by about 50% this year has put the industry in a tailspin. Many oil firms have abruptly cut spending and staff to cope with the downturn.
Work-at-home rules, fewer car and plane trips are expected to reduce U.S. petroleum demand by up to 2.5 million barrels per day (bpd). For the full year, it could cut motor fuel use by roughly 300,000 to 400,000 bpd.
There have been no refining or chemical plant shut-ins caused by coronavirus. Still, companies are drafting plans similar to hurricane measures that keep plants running with minimal staff, said people familiar with operations.
Shell asked salaried staff at its Louisiana refineries to begin shadowing hourly plant operators to prepare managers to run units if necessary, the people said.
Exxon will allow only trained operators into control rooms at its Baytown plant, and they must remain at least six feet apart from one another, they added.
Pipeline regulators discussed work-rules for control room operators and visits by U.S. and state inspectors with trade group executives on Friday, said Suzanne Lemieux, an emergency expert at trade group American Petroleum Institute.
BP and Shell on Friday gave workers work-at-home assignments following similar social-distancing measures at Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and Microsoft’s Silicon Valley offices. The rules affect about 15,000 U.S. Shell workers.
Shell has begun screening staff who travel to its U.S. Gulf of Mexico production rigs “to ensure that we minimize the risks of COVID-19 transmission” to offshore workers, said spokesman Curtis Smith.
The sweeping precautions affect refinery, oil and gas export terminal and gas pipeline operations. Kinder Morgan Inc (NYSE:KMI), one of the largest North American pipeline firms, asked most of its 11,000 employees to work from home beginning Monday. It will reevaluate the situation weekly, said spokeswoman Melissa Ruiz.
Non-essential workers at BP’s U.S. refineries, Exxon’s Baytown, Texas, refinery and Shell’s Convent and Norco, Louisiana, plants also will work from home beginning Monday, according to people familiar with the matter. BP may keep the measures through mid-April, one of the people said.
Exxon would not comment on specific actions. It is focused “on ensuring the safety and health of our entire workforce and to do our part to limit the spread,” said spokesman Todd Spitler.
Marathon Petroleum launched “business-continuity plans to accommodate staffing needs in the event of illness-related absenteeism,” spokesman Jamal Kheiry said.
Among measures being weighed at refineries are assigning small crews to keep plants during an outbreak, the people said. Crews would not leave until the crisis passed.
Most refineries can operate with about half their normal staff, the people said, but may have to scale back production.
Refiners LyondellBasell Industries (NYSE:LYB) and Chevron are considering health checks for employees as they begin their workday, said people familiar with the deliberations.
“We are taking precautionary measures to reduce the risk of exposure, including screening workers and visitors,” Chevron spokesman Braden Reddall said. Local offices will set their own rules with health officials, he added.
(This story has been refiled to correct the name of trade group to American Petroleum Institute from Association)