The African Chamber of Energy (AEC) and IAGC have introduced a range of mitigation steps on behalf of the petroleum and gas industry in the light of the ongoing global COVID-19 pandemic and the resulting collapse in the price of oil. Such initiatives aim to reduce the anticipated job losses and abandon previously viable ventures in the African petroleum and gas sector in view of a global recession.
Although the existing market and global health dynamics do not alter individually by African oil producers, they can have a strong impact as regulators on the business climate of their respective countries through common-sense policies. The AEC and IAGC have called on governments to use this ability to alleviate the adverse effects of the global crisis.
In order to maintain or even improve output levels, the ACE and the IAGC call on African governments to take swift measures to ensure the stability in the African oil and gas industry, especially in the G&E subsections. Through the final analysis, Africa continues to rely on sector income, job growth, affordable energy from the sector, and the ability to generate own energy needs.
Such specifications are in line with the AEC’s recently released Common Sense Energy Agenda for Africa and are available on www. EnergyChamber.org. Such primary conditions and steps include, among others, six months’ waiver of service companies’ taxes, waiver in special for 6-months for non-resident companies, an appeal for banks to offer loan-free loans and interest guarantees to local service businesses with ongoing IOC projects granting extensions for 24-month exploration projects.
Extending non-exclusive geophysical details, confidentiality periods to at least 15 years when such data are not in place, refusing some of the exploration companies work-project commitments, setting up and enforcing government and private sector discussions about revising some of the PSC fiscal conditions that make it difficult for explorers to meet the current market commitments.
Reduction by half (50%) state fees such as education funds, surface rentals, social projects etc. lead champions of the industry to encourage a variety of farm-in and farm-out discussions on current licences, ensure government support for mid-stream projects, prevent the cancellation of FID projects and prioritize economic diversification, and look into the measures of local content that do not function.
“As African energy industry leader and at the core of our mission, battling post-Covid 19 and price war for the restoration of the African energy industry, by making concrete suggestions on how to deal with today’s crisis. The response so far has gone from several oil manufacturers in Africa, which includes the acceptance of some of our suggestions. We still call on everyone to do more. Our IAGG American friends have always helped us to argue for Africa and its energy sector “said NJ Ayuk, Chairman of the African Chamber of Energy.
The IAGC President Nikki Martin emphasised on the importance of the preservation of a healthy energy environment of the geophysical and exploration industries (G&E). “Support for anticipated licenses rounds, all review and award periods which contribute to business certainty and a secure pipeline for future petrol output, should be maintained by national authorities.” Only continuous exploration will provide energy protection for the continent, “she said. “The G&E industry is crucial to unlocking energy resources that will allow economies to recover if COVID-19 has been carried out, but a viable energy sector needs to exist if that time is required to restore it.”
Data Source: African Energy Chamber