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 across the United States and threatened an industry reeling by falling demand and profits.
BP (LON:), Exxon Mobil (NYSE:), Kinder Morgan , Motiva Enterprises and Royal Dutch Shell (LON:) told non-essential staff to work from home starting Monday, workers and officials said. Shell and Chevron have begun routine 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. Such businesses 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:), the nation’s largest refiner by capacity, last week removed some staff at its Carson, California, plant after an employee became ill.
OIL DEMAND FALLS
But falling 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.
BP and Shell on Friday gave workers work-at-home assignments following similar social-distancing measures at Apple (NASDAQ:), Facebook (NASDAQ:), 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,” said spokesman Curtis Smith.
Refiners including LyondellBasell Industries (NYSE:) and Chevron Corp (NYSE:) 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.
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.
SIX FEET APART
The sweeping precautions affect refinery, oil and gas export terminal and gas pipeline operations. Kinder Morgan Inc (NYSE:), one of the largest North American pipeline and export 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.
There have been no refining or chemical plant shut-ins caused by coronavirus. Still, companies are drafting plans to keep running through an outbreak at one or more facilities, said the people.
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, people familiar with plant operations 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.
The procedures are similar to managing through a hurricane or labor dispute. Among measures being weighed are assigning small crews to keep refineries operating 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.
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