Page 16 - AsianOil Week 46

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Australian oil and gas job

count reportedly shrinks 25%

PERFORMANCE THAT Australia’s oil and gas sector has been wholesale gas prices down and feed a man-
rocked by the coronavirus (COVID-19) pan- ufacturing revival.
demic was never in question, with companies The oil and gas industry has not been
large and small posting some painful results over enthused by the prospect of greater government
the course of this year. intervention and has criticised Canberra’s plans
The extent of that impact, however, is begin- as a disincentive to private investments.
ning to come into focus after energy consultancy Rystad said the energy industry’s workforce
Rystad Energy’s newly released report into the oil had already been in decline for a number of
and gas workforce showed that one quarter of all years, falling 24% from 2014 levels to 110,000 in
jobs had been shed this year alone. 2019. The consultancy added: “This is, in part,
The agency said that while some of those the result of lagging growth in operators’ spend-
28,000 lost jobs would be restored from ing in the country.”
next year, the industry would struggle to More than 8,000 engineering and construc-
rebuild its workforce to pre-pandemic lev- tion jobs were lost, representing around 29% of
els in the coming years. It projected that at the total cut count. Rystad warned that employ-
least 20,000 new jobs would be created by ment levels were unlikely to bounce back in the
2025, with the rebound anticipated to start short term, owing to projections that spending
towards the end of 2021. across both segments would decline by another
Rystad analyst Sumit Yadav said: “In the 17% before the end of 2021.
future, the growth in labour demand will not The drilling sector was also deeply affected,
only be driven by oil and gas projects that are with more than 1,100 jobs axed, according to
under development, but also to a great extent by Rystad’s estimates. It added, however, that rig
the infrastructure initiatives undertaken by the demand was expected to rise from 2021 to pro-
Australian government to bring gas prices down vide some much-needed relief.
across the country.” As a potential bright spot, Rystad pointed
Prime Minister Scott Morrison out that the maintenance segment had actually
announced plans in September to “reset” added jobs between 2014 and 2019 and that the
the East Coast gas market by encourag- sector might be able to avoid steep job cuts in
ing both upstream and mid-stream devel- the future. Operators are anticipated to prioritise
opment. The government’s goal remains maintenance activities in order to preserve their
the expansion of gas production to bring financial resources.™

FAR to sell Sangomar holdings to OVL

FINANCE & AUSTRALIA’S FAR Ltd has agreed to sell its payments will terminate three years after the
INVESTMENT minority stake in RSSD, the joint venture set up first sale of oil from the block, a period that is
to develop the Sangomar block offshore Senegal, expected to end on or after December 31, 2027,
to India’s state-run ONGC Videsh Ltd (OVL). the statement noted. Sangomar is currently
In a statement dated November 11, the slated to come on stream in mid-2023, it added.
Australian firm said that OVL’s ONGC Videsh The deal has yet to be approved by FAR’s
Vankorneft subsidiary had agreed to pay $45mn shareholders, and the other investors in the
for a 13.67% stake in the Sangomar field and a RSSD joint venture have not yet said whether
15% stake in the other areas of RSSD’s licence they might pre-empt the planned sale to OVL.
area. As additional consideration, the Indian Additionally, the Australian company will have
company will reimburse FAR with $66.58mn for to secure the approval of Senegal’s Ministry of
its share of contribution to the project’s working Petroleum and Energies to proceed. In the state-
capital since January 1. This reimbursement will ment, it said it anticipated reaching this mile-
allow FAR to make up for its failure to respond stone in January 2021.
to previous cash calls, which led to the accrual of FAR also said it expected the deal with OVL
$29.6mn in debts to the joint venture. to improve its financial position, as it could not
The Australian company will also be entitled meet its financial commitments to RSSD beyond
to additional consideration of $55mn once pro- December 2020. It also stated that the sale would
duction begins at the licence area. Contingent leave it in an estimated cash position of around

P16 www. NEWSBASE .com Week 46 19•November•2020