Vaccine push spreads to Permian operators, with hefty incentives attached
(Bloomberg) --Pioneer Natural Resources Co., the largest oil producer in the Permian Basin, is requiring new hires to be vaccinated against Covid-19 as inoculation and mask mandates proliferate across the economy.
Amid surging caseloads that are stressing medical facilities in West Texas, Pioneer also is offering employees a one-time vaccine incentive of $1,000, the company said in an email. Devon Energy Corp. is offering $500 to workers that show proof they took the jab by Oct. 15.
Meanwhile, Occidental Petroleum Corp. is extending a work-from-home option for some office staff through the end of October, and taking steps to prevent viral spread on offshore platforms. Valero Energy Corp., the second-biggest U.S. fuel maker, is compelling new hires at some refineries to get vaccinated.
Vaccine Resistance
None of the country’s top shale drillers have implemented across-the-board vaccine mandates but the requirements for new hires and cash incentives show the level of concern about the delta variant’s spread. Vaccination rates in some of the Permian region’s biggest oil-producing counties are much lower than state and national averages, government data show.
Permian crude production has been soaring for most of this year as rising oil prices spurred companies to activate suspended wells. Output in the region has increased 32% since the end of February and the latest wave of Covid-19 has yet to show any disruptive impact.
Permian Hospitals
About 35% of Pioneer’s field workers were vaccinated, compared with 80% at corporate headquarters, Chief Executive Officer Scott Sheffield told Bloomberg TV earlier this month.
Virus hospitalizations are creeping higher in the Permian region and the number of intensive-care beds available for the sickest patients has dwindled to 20 for a population of more than 525,000, state health department figures showed.
About 17% of all hospital beds in the trauma service area that includes most of the Texas side of the Permian Basin are occupied by Covid-19 patients, up from 14% a week ago.
‘Serious Strain’
“Pioneer is concerned about the low vaccination rates in the Permian,” the company said. “The Permian area health care system is under serious strain and we continue to encourage everyone that is eligible to get the vaccine.”
Occidental is requiring non-vaccinated employees to quarantine for additional days before they fly out to oil platforms in the Gulf of Mexico, the company said in a statement. It’s also offering shots at heliports. Chevron Corp. and Hess Corp. have implemented vaccine mandates for Gulf crews.
Valero, which operates refineries from Louisiana to California, is requiring unvaccinated workers at some facilities to mask up and submit to weekly testing. TotalEnergies SE, meanwhile, has reinstated a mask mandate at its massive refinery in southeast Texas, according to a person familiar with operations.
