Covid-19 and Offshore Rotorcraft Activity

Preface: Some energy analysts have seen criticism online for writing about the current Covid-19 outbreak, with accusations of attempting to ‘cash-in’ on the crisis. This is unfair given that many of them have written in good faith and given away their analysis for free. From our perspective, every single query received in the last week has related to the impact of coronavirus on offshore activity. It’s the only issue people are asking about and therefore probably top of the list of topics people want to read about. For the avoidance of doubt, it is well understood by this author that the world is facing a massive public health crisis that will claim many lives and impact the day to day activities of everyone. The purpose of this article is not to make light of or distract from that, simply to answer a question that has been asked of us many times over. We continue to wish all of our clients and friends the best in these difficult times.

Over the last week we have seen the Covid-19 outbreak wreak havoc on the world’s population. The number of cases in Europe has exploded and activity and travel is being shut down. Fixed wing flights are being canceled en-masse and aircraft grounded. Stock markets have seen unprecedented turbulence and precipitous falls. Oil prices have plummeted to levels that, if sustained, will decimate onshore unconventional activity and delay sanctioning of many offshore projects slated for FID this year. With regular images in the media of near-empty airports and sparsely filled aircraft we are being asked - is this affecting offshore rotorcraft activity yet?

This question is a relatively straightforward one to answer with the data. A trip to Aberdeen last week also gave an opportunity to observe first-hand the activity in addition to seeing the data on a computer screen. Without the pre-requisite anorak and notebook, but with equipped with camera, a visit was taken to Aberdeen airport (the busiest in the world for offshore rotorcraft) at lunchtime to observe the activity.

Global Activity

Offshore activity is cyclical in harsh environments such as the North Sea and Canada and so comparisons of activity are best achieved with the same period one year prior, all other things being equal. In the chart alongside we show the difference between daily 2020 and 2019 activity for Heavy and Supermedium rotorcraft with positive numbers showing an increase in 2020 vs 2019 and vice versa. The 2020 data are lagged by 1 day so that weekends and weekdays line up correctly.

Whilst there have been occasional days where 2020 activity is lower than 2019 (usually due to weather events) the overal trend thus far (the data run to 13th March 2020) is for a higher level of activity in 2020. January saw an increase of 44 flights overall in this category over the month, February (once adjusting for the extra day in the leap year) saw 494 more flights and thus far in March we have seen 360 more flights than the month to-date in the year prior.

Whilst the data to-date is reassuring, it is early days in this crisis. Over the last week there have been several Covid-19 infection tests of personnel offshore and at least two positive cases. What seems likely from this point onward is that:

1. All non-essential work offshore will likely be cancelled to minimise staffing

2. Platforms may end up being isolated for periods of time if there are infections onboard

3. Platforms may be shut-in completely if not enough staff are available to ensure continued safe operations.

In the coming weeks we would therefore expect to see fewer flights showing in the data compared to the equivalent period of time a year prior.

NORWAY - Martin Linde

On Wednesday 11th March a Covid-19 case was confirmed on the Martin Linde platform in the Norway. Operator Equinor reported that the individual had tested positive and was confined to a cabin. Whilst there have been cases onshore involving other oil company employees the Martin Linde case is believed to be the first confirmed offshore in the North Sea. The field is currently under development (not yet in production) and the jack-up rig Maersk Intrepid and floating accommodation unit Floatel Endurance are alongside the Martin Linde integrated production platform along with a floating storage unit (the Hanne Knutsen)- over 700 people were working offshore on-site. Equinor reported flights to all three units had been suspended as of Wednesday 11th. Other news sources suggested 140 people had left the site, however, our data show only two trips (4 flights) on the 11th which suggests only 38 of those could have left by helicopter - it is possible others left on EERV or supply vessels (or that they are still there.)

UK - Mariner

Also on the 11th March a suspected case was tested on the Mariner A platform some 80km east of the Shetland Islands in the UK sector. We wrote in detail about activity at this remarkable field last year (click here to see our previous Mariner analysis) An updated view of flight activity is shown below, as of 15th March 2020. Interestingly over the weekend of 14th/15th March there have been 6 flights to the Noble Lloyd Noble drilling rig - weekend flights are rare and weekend flights at a higher frequency than is typical during the week on both days of the weekend is highly unusual. It is possible that the rig is being de-mannned, however at the time of writing (15th March) it is not possible to confirm.

(UPDATE 17th March: It was reported on 17th March that “manning on non-critical tasks and operations [on Mariner] was being reduced as a "preventive measure to reduce the risk of contamination")

Summary

The short summary is that whilst this virus may yet impact offshore rotorcraft activity in a meaningful way, the reality at present is that it has yet to do so with the exception of a handful of offshore platforms. This is likely to change in the coming weeks… However, without hydrocarbon production there is no natural gas for power stations or local distribution into homes, there is no petrochemical feedstock for vital products including medicines, and so on. It is truly a ‘mission critical’ service. For those that don’t believe the data, a trip to Aberdeen to see it for yourself is recommended. Please - don’t forget your anorak, notebook and thermos filled with hot tea……

Steve Robertson, Director

Air & Sea Analytics

sr@airandseaanalytics.com