Norwegian oil and gas company Equinor is set to form what it described as a "temporary corporate project" aimed at dealing with the effects of the coronavirus and the low oil prices.
"The Coronavirus, measures to limit the spread and the significant fall in oil prices have huge impact on the global economy, and on individuals and companies across the world. As a response to the current situation, Equinor is now making temporary changes to ensure an effective response and coordinated efforts across all business areas to manage the situation both short and long term," the company said Tuesday.
As previously reported, Equinor last week reported the first case of the coronavirus infection aboard an offshore oil and gas installation, with one of its workers involved in the Martin Linge development off Norway, infected. The firm last Friday said it had halted work at the Martin Linge offshore development project, due to the situation.
Commenting on the establishment of the "temporary corporate project" to deal with the oil price and coronavirus situation on Tuesday, Equinor's CEO Eldar Sætre said: "These are challenging times for us all, as individuals, families, societies, and companies. We are facing uncertainty, many are afraid for their and their loved one’s health, others of losing their jobs and concerned for their future.
"Our response must be to do our utmost to limit the spread of the virus and to take care of safety and health. At the same time, we must make every effort to keep operations and business going and to produce and deliver the energy the world needs."
Project to deal with immediate response and long-term implications
Equinor said it was is establishing the "temporary corporate project" to handle both short-term immediate response and long-term implications.
"The project will be established and structured over the coming days and will be headed by EVP Pål Eitrheim reporting directly to CEO Eldar Sætre," the company said.
An already working internal project focusing on immediate response and short-term business continuity issues will be incorporated into the new corporate project.
"The outbreak of the Coronavirus and the fall in commodity prices will impact Equinor for a long time. We are a robust company with a strong balance sheet, and we are now really benefitting from the strong improvements in recent years. But it will be necessary to take forceful action to reduce risk, protect our business and operations and to ensure the long-term robustness of our company. I have therefore asked Pål Eitrheim to lead our work on this and it will be on top of the agenda for our Corporate Executive Committee and Board of Directors," says Sætre.
Equinor has already implemented significant measures to limit the spread of the Coronavirus and to ensure business continuity during these challenging times, including reducing and delaying non-critical tasks at fields and plants, implemented procedures for working from home and taken strict travel restrictions and quarantine measures, the company said.
As previously reported, Equinor has earlier this week said that it would extend its employees' shifts at offshore platforms to 21 days from 14 days to reduce the risk of coronavirus spread.
"There will be uncertainty and volatility going forward, and Equinor will continuously evaluate measures to respond. Keeping production going and ensuring that we can deliver oil and gas to our customers have high priority," Equinor said.
Also, Reuters on Tuesday reported that Equinor was reviewing its capital and exploration spending plans. The company in February said it would spend $10 billion and $11 billion in 2020 and 2021, respectively, lifting the spend to around $12 billion in 2022 and 2023.