As Europe moves into yet another wave of Covid-19 lockdowns, there is growing concern surrounding the future of offshore workers. However, a move to digitalize the industry by introducing a remote oil rig system could alleviate the stress around contagion and potentially save many jobs.
Norway has been a key testing ground for remote operations since initial experiments took place on small unmanned rigs in 2013, moving to control larger manned units remotely over the last few years. But it’s found that moving jobs to land brings oil rig safety measures into question.
The country’s attempt to operate more oil rigs remotely onshore has not been met with wholly open arms. A stike by Norwegian union Lederne shut six fields in October, threatening a quarter of Norway’s oil and gas output, over the proposed change in operations.
The move to introduce more “ghost rigs” could provide a means for offshore workers to continue operations as Covid-19 restrictions tighten. However, safety measures are still a point of debate. Concerns relate to the situational awareness of those working offshore and on land, Hilde-Marit Rysst, head of the union Safe, told Reuters.
The first entirely unmanned oil platform in Norway began operations in 2017. Equinor’s Valemon, situated 160km from land, contains about 192 million barrels of oil equivalent. Its remote employees are expected to spend two weeks a year on the vessel to familiarize themselves with the space, alleviating some of the abovementioned safety concerns.
Aker BP followed in Equinor’s footsteps by inaugurating its first remotely-controlled platform in 2019. The move to digitalize rigs shifts safety reliance towards technology, while offering the ability for those manning the platform to take over controls in the case of an emergency. Audun Martinsen, head of the Rystad’s Oilfield Services Research, told Baker Hughes that automation and digitalization of oil fields is “a key part of keeping those barrels economic”.
One of the key arguments for ghost rigs is that they decrease expenses such as helicopter transport and other costs, which could account for as much as 50 percent of an employee’s total salary. With the success of the trial rigs, both Aker BP and Equinor are expected to roll out more remote platforms. Nevertheless, the move towards greater technological innovation calls into question the outlook for human jobs in the sector.
As we see more lockdowns being introduced, the outlook for offshore workers is unclear. Figures by the Oil and Gas UK (OGUK) body show a decrease of around 4,000 offshore personnel since the March lockdowns in the UK. The average number of weekly on-board workers dropped from 11,000 in March to 7,000 in April, particularly in drilling and engineering.
The number of on-board personnel has steadily increased since April, but as another lockdown commences across the UK the industry could take a second hit.
Employment in the sector has already been significantly affected with BP Plc planning to cut 10,000 jobs, 14 percent of its workforce; Shell 9,000 or around 11 percent of its workforce; and Chevron cutting personnel by 6,000, equivalent to a 13 percent reduction in its workforce.
It’s not just the North Sea where we’re seeing job losses on offshore rigs. Houston’s Transocean Deepwater has announced job cuts of up to 110 people by December owing to low oil prices. Suncor Energy, based in Calgory, also announced jobs cuts of up to 2,000, or 15 percent of its workforce.
As well as job losses, experts worry about the decrease in energy consumption as further lockdowns are introduced. In the Spring of 2020, global oil consumption decreased by around a quarter, sending oil prices plummeting.
However, many believe this time is different and with more staggered restrictions across the globe, demand is likely to be much higher than earlier this year. As we head towards winter in Europe and North America, energy consumption for those working from home and switching to driving instead of walking or cycling is likely to increase. Regardless, a drop in consumption in response to stricter Covid-19 response measures is to be expected.
Instead of cutting jobs across the board, could remote operations provide an alternative option? As Equinor and Aker BP develop this innovative approach to operations, it’s likely that many will follow suit.
By Felicity Bradstock for Oilprice.com