No operational impact from coronavirus: Vermilion

Canada's Vermilion Energy -- the operator of Ireland's biggest gas field Corrib -- said Monday it had not seen any impact to date on its operations due to the coronavirus pandemic.

With an increasing number of European countries in lockdown over the virus, also known as COVID-19, there are growing concerns about whether upstream operations could begin to be affected.

"Thus far, we have had no operational or supply chain impacts from COVID-19," Vermilion said in a statement.

However, the impact on demand from the virus as well as the oil price fall due to the collapse of the OPEC+ alliance has prompted Vermilion to slash its capital expenditure by around 20% to $360 million for 2020.

"We have witnessed a further decrease in oil prices as a result of the growing COVID-19 outbreak and the ensuing oil price war between OPEC+ members," it said.

"While we continue to believe the long-term fundamentals for the oil and gas industry are sound and will lead to higher prices in the future, we cannot predict how long the impact from COVID-19 and the OPEC+ price war will continue."

It said that given the "global emergency" it decided that it was appropriate to take additional actions regarding capital investment.

Vermilion expects to produce some 94-98,000 b/d of oil equivalent in 2020 from its operations in Europe, North America and Australia.

Europe -- mostly production from Corrib -- accounts for around 35% of its total output, with North America making up 60% and Australia the remainder.

Vermilion took over as operator of Corrib in 2018 from Shell.

The field started up in 2015 and has produced at rates as high as 350 MMcf/d -- or 10 million cu m/d.

However, the field is in decline and Vermilion reported production from Corrib of an estimated 210 MMcf/d in Q4 2019.

According to industry estimates, Corrib may only produce for 15 years -- meaning it could reach the end of its operational life as early as 2030.