Page 6 - AfrOil Week 26

AfrOil NEWSBASE GLOBAL ROUNDUP (NRG) AfrOil

NRG: Trying to adapt

World oil markets have found some support over the last week,

but companies are still adjusting to the new price environment

COMMENTARY WELCOME to the latest edition of NewsBase’s scrutiny in Africa and the Middle East, as well as
Roundup Global (NRG), in which our team of Russia.
international editors provide you with a snap-
shot of some of the key issues affecting their Asian-Pacific markets adapting
regional beats. Get the NRG Oil & Gas Editor’s The Asia-Pacific oil and gas market is showing
Picks to your inbox every week for free. Just sign signs of adaptation to the new low-price envi-
up here. ronment, with governments unveiling reforms
Crude oil prices slipped last week but have and investors snapping up cheap assets.
regained ground in the early part of this week, with India has finally bowed to pressure from
front-month contracts for WTI and Brent clos- its state-run developers, announcing plans to
ing at $38.60 and $41.02 respectively on June 29. slowly dismantle the country’s natural gas pric-
This upswing appears to indicate that the OPEC+ ing mechanism. The mechanism has long been a
group’s production agreement is lending some sup- bugbear for domestic developers, who argue that
port to world oil markets, which are under some it leads to unrealistically low pricing for locally
bearish pressure as inventory levels remain high produced gas.
and the number of coronavirus (COVID-19) cases Indian Minister for Petroleum and Natural
rises in the US and elsewhere. Gas Dharmendra Pradhan said on June 25 that
Meanwhile, oil and gas firms around the world the country would begin to transition towards
continue trying to adapt to a lower price environ- market pricing.
ment. Some are looking to divest and privatise His announcement comes after the launch of
assets in order to streamline their operations, while Indian Gas Exchange (IGX) in mid-June, which
others – including a big name in the US unconven- has demonstrated that the market is willing to
tional sector – are declaring bankruptcy. pay much a higher price for gas than that set by
Meanwhile, midstream projects are also under the government.

P6 www. NEWSBASE .com Week 26 01•July•2020