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FSUOGM NEWSBASE’S ROUNDUP GLOBAL FSUOGM
A slow and painful recovery
The market may be showing early signs of a recovery, but for many oil and gas companies, the worst is still to come
NRG
WELCOME to the second edition of NewsBase’s Roundup Global (NRG), in which our team of international editors provide you with a snap- shot of some of the key issues affecting their regional beats.
Oil prices have regained some ground since plunging to near two-decade lows last month, but the recovery will be slow and painful. Oil and gas companies across the globe saw their first-quarter earnings evaporate as a result of the market collapse in March. For many, the current quarter will be even more punishing.
Those producing countries that have imposed output cuts may have won praise for helping to rebalance the market. But their earnings will take an even greater hit if the gambit fails to deliver a meaningful rise in oil prices. Deep spending cuts announced earlier this year have led to record lows in drilling activity, putting unprecedented strain on contractors and suppliers.
African gas focus
Nigeria, sub-Saharan Africa’s largest oil pro- ducer, has taken a hit in the last two months, owing to the decline in both energy demand and crude prices. Nevertheless, it is working to develop plans for the expansion of its natural gas sector.
To date, the West African state has mostly concentrated on developing crude oil. (Indeed, it is still working to reduce the flaring of associated gas, which was long viewed as a waste product.) However, its gas reserves are large enough to make it “a gas nation with some oil” rather than
an oil-producing country with some gas, accord- ing to Tony Attah, the head of the Nigeria LNG (NLNG) consortium.
Attah was quoted by Punch as saying last week that Nigeria’s proven gas reserves amounted to more than 200 trillion cubic feet (5.7 trillion cubic metres). With reserves of this size, it is “time for Nigeria to unleash its gas potential,” he said. He also talked up plans for promoting domestic gas consumption, saying that NLNG hoped to start selling a larger share of its production locally.
The NLNG head was not the only one to examine the domestic market’s potential; Chuk- wueloka Umeh, the CEO of Century Power Generation, told The Guardian last week that the economic fallout from the coronavirus (COVID-19) pandemic ought to serve as an incentive for the promotion of domestic gas-to- power projects.
“It is time to do things differently ... Pick a set of regulations, such as the ones that birthed the only project-financed power plant in Nigeria to date, Azura power; respect contracts and the rule of law to give local and foreign investors comfort, and just get it done,” he said.
If you’d like to read more about the key events shaping Africa’s oil and gas sector then please click here for NewsBase’s AfrOil Monitor.
Asian state aid
The oil price crash has sideswiped Asia’s energy markets, sparking legal battles and forcing
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w w w . N E W S B A S E . c o m Week 20 20•May•2020