Covid-19 Pandemic had a major impact on the operations of the oil and gas industry in Nigeria. In fact, the oil supply/demand imbalance is occurring in tandem with the depressed need for chemicals and refined products stemming from industrial slow-downs and travel restrictions in the wake of COVID-19.

Consequently, the short- to medium-term outlook for most oil companies appears to be more challenging now than ever. That’s why companies have realized the importance of augmented reality for the sustainability of the oil and gas sector.

According to NNPC’s Monthly Financial and Operations Report for January 2020, Independents accounted for 4.71% of national crude oil and condensate production, which stood at 60.80 million barrels as of December 2019. These operators, however, account for a significant portion of borrowings in the industry. With the economic downturn, the
Independents appear to be at a higher risk of a debt crisis, than the IOCs, due to the extent of their exposure.

So, we examine the challenges faced by oil companies as a result of the impact of the Covid-19 coronavirus on the offshore industry.

What Are The Major Challenges Faced By The Offshore Industry?

This pandemic forced companies to slow or halt physical operations, impacting production in the upstream sector.

We have monitored the situation closely and also examined the measures put in place to ensure working can resume effectively offshore. However, some of these health and safety measures taken by the NCDC have impacted heavily on operations upstream sector. These challenges are:

#1 Travel Restrictions

Chevron said it is actively screening workers and visitors. A spokesperson spoke in an interview that screening levels were “based on criteria that include local health authority recommendations and regulations, the number of recent travelers at the facility, and the capability of health infrastructure in the community.”

Consequently, this has affected all operations offshore as foreign experts occasionally are invited to train offshore workers especially on the operation of new equipment. This results in increased efficiency. When you running efficiently, your profits are high as a company. 

The travel restrictions pose a threat to companies’ employee efficiency. However, that can be remedied by the use of our Augmented Reality Products at IngresQR to conduct several remote coaching programs by experts with ease.

#2 Rig Infection And Social Distancing

Amid the pandemic, Shell evacuated workers from the Bonga floating, production, storage, and offloading unit after some of them contracted COVID-19, resulting in the maintenance program being halted.

The Department of Petroleum Resources (DPR) also confirmed that a growing number of workers were being diagnosed with COVID-19 at offshore and remote oil locations and expressed fears it might disrupt production.

As a result of the rising cases, Nigeria’s petroleum regulator has ordered oil and gas companies to reduce their offshore workforce and move to 28-day staff rotations as part of measures to curb the spread of the coronavirus, according to a circular seen by Reuters.

This has made it difficult to hold training with a large number of workers on the training ground. So, for offshore training to be carried out effectively, workers have to be divided into batches which in turn increases the cost of training for oil companies.

#3 Machine Inspection And Commission

In the oil and gas industry, gas turbines and their auxiliary systems are subject to individual shop inspection and testing before it is commissioned for use. This inspection is done to assess the condition of an asset. Inspections are conducted to industry standards, such as API, as well as to specific client requirements.

In the same vein, Rig-commissioning services involve ensuring that rig machinery and equipment are functioning properly and are in accordance with the client’s requirements.

However, due to the COVID-19 Pandemic Impact On The Oil Industry In Nigeria, several facilities that require inspection or commissioning have been shut down indefinitely pending the release of travel restrictions.

#4 Oil price crash

One important impact of the COVID 19 pandemic on the downstream oil industry is that the price of crude oil has fallen significantly in a short time, taking billions off the stock prices of major oil and gas companies.

Oil prices have fallen by two thirds since the start of the year. And, this has forced Nigeria to cut its budget and prompted oil companies to reduce their spending plans.

That’s why augmented reality gadgets are predicted to become a big player in the oil and gas industry. This helps reduce companies’ overall cost of training as well as guarantee the efficiency of employees in both the upstream and downstream sectors.