Offshore oil and gas development may suffer setbacks because of the coronavirus outbreak in China, Rystad Energy said in a note dated February 28. It explained that problems could arise because of the increasing popularity of floating production, storage, and off-loading (FPSO) vessels among offshore operators – and because of the spread of the virus beyond China’s borders.
Fully 22 of the 28 FPSOs now under construction are being built at shipyards in China, South Korea, and Singapore, the Norwegian consultancy reported. Since all three countries have been hit by staffing shortages and supply disruptions in recent weeks following the roll-out of major public health initiatives, these vessels are likely to be finished three to six months behind schedule, it said.
This, in turn, will force offshore operators to delay production at a number of new fields, said Audun Martinsen, a partner in Rystad who heads the company’s oilfield service research division. “Although operators and contractors are looking into ways to make up for some of the time that will be lost by fast-tracking other stages of development, we anticipate first oil or gas for these projects will face clear delays,” he commented.