The Coronavirus pandemic which forced many countries to implement travel restrictions lowering demand for oil, thereby, crashing global oil prices has impacted negatively on investments and production on oil and gas sector in Africa, latest report reveals.
The Covid-19 has forced most international oil and gas companies operating in Africa to cut down spending and cancel or defer projects.
According to a report compiled by Africa Oil Week, in collaboration with Wood Mackenzie titled: ‘After The Crash–What’s Changed In The African Upstream’, it showed that spending in the upstream sector in 2020 has declined by US$14 billion, with assets value also declining to one-third or US$200 billion.
The report noted that spending reductions in Africa is expected to be greater than global portfolio averages.
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The report indicated that expected Final Investment Decisions (FIDs) in 2020 have also fallen from 10 to one.
“African production will decline for the first time since 2016, down 1.3 million b/d in 2020 as demand falls and OPEC cuts take effect. Delayed, deferred and cancelled investments will slow the rebound. Weakened gas demand will cause short-term losses in North Africa, while East Africa faces mid-term losses as LNG projects are delayed. NOCs, led by OPEC+ members, have the deepest production cuts,” it said.
After the Crash – Africa – AOW X Wood Mackenzie
Source: www.energynewsafrica.com
