Global industries announce measures in response to coronavirus
19 March 2020
Companies from all over the world are announcing the precautions they are taking in response to the impact of coronavirus and COVID-19 on several markets and industries.
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In the nuclear sector, EDF Energy said on March 17 that it has plans in place to allow its UK nuclear plants to continue operating as usual. EDF operates all 15 nuclear reactors in the UK, of which eight are currently offline.
Earlier, on March 16, EDF said it was reducing the amount of staff at its Flamanville nuclear power plant in northern France as a result of the number of coronavirus cases in the local area.
Sellafield, the UK's nuclear waste site, will be closing down its Magnox reprocessing plant in the coming days after an outbreak of coronavirus amongst Sellafield's 11,500 staff resulted in 8% of staff members (1,000 people) self-isolating. Sellafield announced on March 17 that the Magnox plant in Cumbria, north west England, would close down so that operations could be scaled down and site could continue its focus on delivering its high hazard risk reduction activities.
The UK Office for Nuclear Regulation (ONR), which aims to provide efficient and effective regulation of the nuclear industry, said that all of its sites in the UK will have minimum staffing levels for the foreseeable future as it advised its staff to work from home.
The ONR has contingency plans in place should staff levels drop below the minimum which will enable some inspectors to continue to travel to sites where required so that the regulation of the nuclear industry can carry on as normal.
With an increasing amount of people working or self-isolating at home, UK energy providers have re-assured the public that the coronavirus outbreak will not impact electricity supply to households. Some of the country’s largest energy suppliers made an announcement on March 18 saying that they would also protect those who would struggle to pay bills in the coming months.
Meanwhile, the oil and gas industry continues to be impacted by declining prices and oversupply. Saudi Arabia remains in a price war with Russia after the oil market lost half of its value in the last month.
Oil producers in Nigeria and the North Sea are also feeling the effects of the worldwide pandemic. Despite decreasing demand for oil, Reuters reports that supply is growing as producers look to gain market share after Russia voted against production cuts at a meeting with the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC+ allies.
The Nigerian National Petroleum Corporation (NNPC) has announced that it currently has around 50 unsold cargoes of crude oil, the equivalent to 50 million barrels. The situation surrounding the coronavirus outbreak has also meant there is a lack of storage options for oil as fuel demand continues to drastically fall in the face of restrictions and lockdowns across the globe.
Reuters has also reported that Shell is looking to book three very large crude carriers (VLCCs), which are able to store up to 2 million barrels of oil each during a five-month charter period. The use of VLCCs has become ever more viable as storage options become restricted both onshore and offshore in the face of rising global stocks of oil.
On March 19, Oil & Gas UK (OGUK) said that the country’s oil and gas sector would need financial help to survive. The industry body said the Saudi-Russian price war could mean the UK sector is unable to continue producing hydrocarbons in the North Sea.
The UK government has already announced a £330 billion package including loan guarantees and tax cuts for businesses which are at risk of collapse during the coming months. OGUK Market Intelligence Manager Ross Dornan has said these funds may not be enough to make sure some UK oil and gas companies survive. OGUK’s ‘The Business Outlook: Markets and Investment’ report shows that drilling levels could fall back to 2016 levels, down by more than 30% on previous market forecasts.