Ebola may disrupt West African oil & gas operations

Oil and gas exploration and production programs in West African states are under increasing risk due to the failure to contain the Ebola virus, potentially depriving the region’s economy of millions of dollars a day, according to an analyst with research and consulting firm GlobalData.

John Sisa, GlobalData’s Lead Analyst covering Upstream Oil & Gas in the Sub-Saharan region, states that as exploration and production operations across West Africa depend on expatriates who work and live in the region, operators may withdraw personnel and halt activities until the Ebola situation is controlled in Guinea, Sierra Leone, Liberia and Nigeria.

“Nigeria is the only country in the region with sufficient resources to contain the outbreak, but there is still a risk of uncontrolled spread of Ebola,” says Sisa. “As the eighth largest crude oil producer in the world, there is a substantial threat of supply disruption should the virus spread further in the country.

“Almost 80% of Nigeria’s total oil production comes from offshore areas, while the remaining portion comes from onshore areas considered high-risk Ebola zones. If the outbreak spreads further, it could potentially disrupt all Nigerian onshore oil production, equivalent to $40 million per day,” stated Sisa.

Sisa adds that Ebola has already overwhelmed the healthcare systems of Liberia, Sierra Leone and Guinea, noting that these countries have partnered with private local and foreign firms to finance oil and gas exploration.

“Although most of the drilling in Guinea, Sierra Leone and Liberia occurs offshore in water depths ranging from 300–4,500m, almost all oil workers are based in onshore stations, exposing them to Ebola,” says Sisa.

Sisa added that Oil workers who are local nationals and returning to their onshore homes in dangerous, infected zones could bring the virus to the drillships and platforms when reporting for duty.

Sisa concludes that while the impact of Ebola has so far only delayed exploration activities, the worst-case scenario could see a spread to East Africa, endangering major operations in Kenya, Mozambique, Tanzania and Uganda.