Oil giant ConocoPhillips announced Wednesday that it’s shutting down its drill rigs on the remote North Slope oil fields, and placing them into long-term storage, to protect its employees and contractors during the coronavirus pandemic.
This winter was supposed to be Conoco’s largest exploration and construction season ever in Alaska. In a statement, Conoco spokeswoman Natalie Lowman said the company is now significantly reducing its workforce on the Slope because of the heightened risk of COVID-19, the disease caused by the coronavirus.
“The health and wellbeing of our workforce, along with mitigating the spread of COVID-19 is our top priority,” Lowman said. “The preventative actions we’re taking in Alaska are primarily due to the remoteness and complexity of operating on the North Slope during the COVID pandemic.”
Lowman said she didn’t have additional information Wednesday on workforce impacts, including any layoffs and how many fewer employees and contractors will be on the Slope. In a letter, the president of Doyon Drilling, a subcontractor, said the impact of the decision will be “severely felt” by all of its employees and Alaskans, The Anchorage Daily News reported.
Wells in production will continue to produce oil, Lowman said. Development and exploration drill rigs will be demobilized. That includes its new, massive rig nicknamed “The Beast” that was expected to begin drilling this month.
“Given the high degree of uncertainty on how the situation plays out, we can’t say how long these measures will be in place,” Lowman said.
The oil industry is not only dealing with the coronavirus, but also a historic drop in oil prices. In early March, Alaska North Slope crude sold for roughly $50 a barrel. On Tuesday, the price fell below $20.
Conoco previously announced it was cutting its capital spending in Alaska by roughly $200 million due to low oil prices.
So far, there has been one confirmed case of COVID-19 on the Slope oil fields, where employees live and work in close quarters. BP announced last week that a Prudhoe Bay worker had tested positive for the disease.
In response, BP also said it would limit its activity at Prudhoe Bay “to safety critical and regulatory compliant activity.” It ended this year’s development drilling.
Asked if any Conoco workers on the Slope had tested positive, Lowman said in an email, “I can’t share information on workforce health matters.” The state is the primary source of information on COVID-19 cases, she said, and had only confirmed one case.
The number of cases across Alaska continues to grow, reaching 226 by the end of the day Tuesday.
Oil companies, including Conoco, have reported an array of efforts to keep the virus off the Slope including longer shifts, health screenings and increased sanitation.
Reach reporter Tegan Hanlon at email@example.com or 907-550-8447.