Coronavirus strikes again offshore India – Upstream Online

The coronavirus pandemic that has India in its grip has not spared the industry with some 80 workers at Oil & Natural Gas Corporations (ONGC) Heera field operations in the Mumbai High offshore area testing positive in recent days, according to local media.

State-owned giant ONGC has again been hit with outbreaks of the potentially deadly disease among its staff and contractors, following similar outbreaks last June and August.

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Of the total ONGC workers now affected at Heera, around one third are employees and the rest are contractors, reported Money Control. It is not known whether production has been affected at the offshore field.

Positive cases of Covid-19 have reportedly been detected among ONGC-owned jack-up rigs including Sagar Uday and Sagar Ratna.

Meanwhile, Indian drilling contractor Aban Offshore confirmed that for the second time in just a few weeks it has suspended operations with its jack-up Aban IV, owing to outbreak of Covid-19. The rig too had been working for ONGC on its Mumbai High asset offshore Indias west coast.

Only last month the coronavirus forced Aban to suspend work with the jack-up Aban III, which is also on contract with ONGC, although operations on this rig restarted after a hiatus of around 10 days.

The drilling contractor has not revealed how many crew members were affected.

Like many operators, ONGC has adjusted its roster patterns for offshore workers because of the pandemic, stepped up routine testing and imposed quarantine measures in an attempt to curb the spread of Covid-19.

Even so, 2020 saw reported outbreaks of the disease and one fatality among workers on facilities at Mumbai High and its Bassein field.

During last years lockdown, Indias oil demand fell by 1.2 million barrels per day year-on-year in the second quarter, equal to about a 25% decrease, according to consultant Wood Mackenzie.

"Weve not seen anything this severe yet in the current crisis. And while many states and territories have implemented restrictions in movement, without a full nationwide lockdown, we expect the impact on oil demand to be more modest: road traffic oil demand in April 2021 is estimated to be down by about 20% to 25%," said Qiaoling Chen, WoodMac senior analyst, APAC oils & refining research.

"Ironically, it is the scale of the current crisis that is offering some support to oil demand. Responding to such large numbers of infections is resulting in a significant increase in personal mobility and transportation of medical equipment and supplies. Meanwhile, under current restrictions much of Indias economic activity is still permitted, particularly within the industrial sector."

As such, the consultant expects expect demand losses to be concentrated in the second quarer at around 200,000 bpd, with gasoline, diesel and jet fuel combined accounting for most of this contraction.

"Of course, there are significant downside risks to this view, particularly if the duration and extent of the crisis increases," added Chen.

"If lockdown is extended for the entire month of May in those states with the most severe current restrictions, then we could see loss of oil demand for the second quarter of 2021 in the range of 300,000 to 500,000 bpd. Should a nationwide lockdown be imposed then losses will inevitably increase further."

Given the impact of the coronavirus crisis, WoodMac now expects Indias gas market to grow by around 5% in 2021, "noticeably slower than the 8.7% recovery anticipated before the ongoing increase in infections".

India had reported 20.7 million confirmed cases of the coronavirus and 226,000 deaths as of 5 May although the actual numbers could be much higher given the large rural population.

Updated to include comment from consultant Wood Mackenzie.

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Coronavirus strikes again offshore India - Upstream Online