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Wed Apr 29, 2020, 07:43 AM

COVID Hammering Russia's Ability To Produce Its Only Real Asset - Oil & Gas


In mid- and late March, as the coronavirus was beginning to tear through Europe and the United States, Russia reported a curiously low rate of infection. I wrote an article on March 25th, when Russia had fewer than five hundred confirmed cases, asking whether, thanks to a mixture of luck and some early measures, Russia would be spared the worst of the COVID-19 pandemic. A month later, the answer seems to be no.

Russia now has more than ninety thousand reported cases of the virus, with a curve that is still growing steadily upward; the pace of new infections is the second highest in the world, behind only the United States. (Russia’s growth rate has slowed some in recent days, settling at seven per cent per day.) Just more than half of those cases are in Moscow, a logical epicenter, given its extensive global connections and urban density. In the provinces, infection clusters have broken out in hospitals, nursing homes, and church congregations—a tragically similar pattern to those found throughout Europe. But one particularity of the virus in Russia has been its spread in remote settlements above the Arctic Circle, in places such as Belokamenka—forbidding outposts that exist to service the country’s lucrative oil-and-gas industry. Otherwise cut off from the rest of the world by geography and climate, they are connected to the rest of Russia and beyond through their ever-rotating workforces—which, in the time of a global pandemic, serve as a dangerously efficient vector for spreading the virus. In recent weeks, a number of far-flung oil and gas fields across Siberia and Yakutia—a Russian republic that is five times the size of France—have been hit by their own localized COVID-19 outbreaks. Dozens of people have tested positive for the coronavirus at the Chayanda natural-gas field in Yakutia, which provides most of the gas for the Power of Siberia pipeline, the cornerstone of a four-hundred-billion-dollar energy deal that Russia signed with China, in 2014. On Monday evening, hundreds of workers gathered in an angry protest against conditions at the site; a video of the demonstration appeared online. In it, one worker yells, from the crowd, “What are we, pigs?” Another says, “Where is the quarantine? Where are the masks? There is nothing! They’ve crammed us all into dormitories, where we’re infected with who knows what.” The governor of Yakutia announced that all ten thousand workers at the Chayanda field have since been tested, and, although the results are not ready yet, “the number of sick people there is significant.”

Another hot spot is Sabetta, a port on the Kara Sea, which serves as a transport hub for liquified natural gas (L.N.G.) from the Yamal Peninsula, a four-hundred-mile stretch of permafrost jutting into the Arctic Ocean. In 2017, Putin himself launched the Yamal L.N.G. project, with great fanfare. Last year, it exported eighteen and a half million tons of L.N.G. on ice-breaking tankers. In late March, given the growing threat of the coronavirus, the regional governor, Dmitry Artyukhov, said that energy companies in the territory should keep their current work brigades in place and not introduce any new rotations until the summer. But many firms ignored him. “No one took him seriously,” Stanislav Gurbin, the editor of YamalPro, an independent news portal covering the region, told me. “In Yamal, everyone knows the governor is put in his job so as to do everything to facilitate the activities of oil and gas companies, and certainly not to get in their way.” Moreover, Gurbin added, a massive project like Yamal L.N.G. is carried out by dozens of contractors and subcontractors. The largest firms, like Gazprom and Novatek, can afford to cease operations for a while, but, for the smaller players, the cost of a cancelled helicopter or plane charter, booked months in advance, could be ruinous.

In late March, a new contingent of workers—several hundred people—passed through the Sabetta airport. Chaos ensued: some newly arriving crews were put under mandatory quarantine before being let into the general population; others were sent to work right away. “It all started from there,” one worker at the Yamal L.N.G. site told me. Two weeks later, in mid-April, a handful of people reported fevers and other common COVID-19 symptoms. As at Belokamenka, the Yamal bosses said little, even as the first suspected coronavirus patients went to hospitals in nearby cities. As of Tuesday, more than a hundred and thirty workers from the site have tested positive for COVID-19. The regional governor has taken to announcing new infections in broad geographic terms, rather than linking them to particular oil and gas fields. “Why?” Gurbin, the editor, asked. “What are they afraid of?” He went on to answer his own question: “Our bureaucrats have the habit of keeping bad news quiet, not calling things by their names.”



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