Top oil industry decision-makers in Nigeria are busy assessing the impact of COVID-19 and strategising for the future.
Though Minister of State for Petroleum Resources, Timipre Sylva, could not be reached for comments, ministry officials, however, say they have been assessing the impact of the pandemic and strategising for the future.
Before now, efforts were being made in Nigeria to push through the beleaguered Petroleum Industry Bill (PIB). The aim was to create a more predictable investment policy climate for oil and gas investors.
With the COVID-19 crisis, oil prices are disturbingly crashing. However, the aim seems even more vital in the current climate of the coronavirus crisis.
There are hopes that the PIB will be passed before the end of 2020, as Senate President, Ahmed Lawan, says “our petroleum industry is almost stagnant and for long needing profound reform.
‘’Our oil and gas-related committees are, therefore, expected to work hard to take the lead in our determination to reform this vital sector. It is the desire, indeed the design of this Senate that the Petroleum Industry Bill is passed before the end of 2020.”
President Muhammadu Buhari’s administration is also making efforts to promote investment in electric power generation, transmission and distribution, intending to facilitate gas production and pipeline network investments.
For decades, Nigeria has earned notoriety for gas flaring, and the detrimental environmental and health effects of this on surrounding communities, who ironically often lack access to electricity.
Without a doubt, the full effects of the coronavirus plague on Africa’s petroleum sector remain to be seen. There is no doubt that the continent will, in the short-term, suffer greatly under the dual threat of the COVID-19 and the damaging oil price crash.
Many of Africa’s economies, including Nigeria, Angola, Equatorial Guinea, Algeria, Gabon, Libya and the Congo, are heavily reliant on their hydrocarbons sector and will expect to see a drastic drop in revenues and a stalling of investment.
Most recently, Final Investment Decision (FID) has been delayed on Mozambique Liquefied Natural Gas, as the American oil and gas major, ExxonMobil, reduces this year’s spending by 30% to $23 billion.
Energy intelligence firm Rystad Energy expects that many of Africa’s planned oil and gas projects that were expecting FIDs under an oil price assumption of between $55 and $60 per barrel will be hit hard by current oil prices.
Unarguably, many countries appear to be taking on board the fact that initiatives undertaken today will determine the future of their oil and gas sector for years.
For instance, Equatorial Guinea, where the oil sector continues to be the largest private-sector employer, has waived charges to support oil and gas services companies, and protect jobs, heeding the advice given by African Energy Chamber.