…As OPEC, OPEC+ Meet In Vienna Tomorrow
The African Energy Chamber has asserted that the situation in Africa’s economies are dire, whereas the continent needs a deal to ensure the continuity and survival of its industry.
The call is coming on the heels of the meeting tomorrow, Thursday, April 9, by OPEC+ in Vienna where effort is expected to be made to reach a deal and end the current oil price war.
Since OPEC failed to reach a deal on maintaining production cuts last March, major oil producers have been ramping up production to maintain and increase their market share. Increased supply came on top of a demand shock due to the COVID-19 pandemic, and sent oil prices at a historic low averaging $20.
“Ahead of the meeting, the African Energy Chamber urges OPEC and OPEC+ to work together and find a deal to restore market stability,” said AJ Ayuk, Executive Chairman of African Energy Chamber in a statement yesterday. He said the continent needs a deal to ensure the continuity and survival of its industry.
He noted that following the crash in oil prices, key projects awaiting FID such as ExxonMobil’s Rovuma LNG have been delayed. Other projects already on the move, such as Senegal’s Greater Tortue Ahmeyim, are seeing an extension of their timeline to provide for CAPEX cuts, he equally noted.
African Energy Chamber noted that several drilling contracts have been terminated or cancelled, or simply won’t be happening. This is the case across the continent, especially for much-awaiting drilling operations like in The Gambia or Angola. On top of that, thousands of jobs could be lost in the African energy sector, if the situation was to linger, Ayuk reasoned,
“The twin crisis of the COVID-19 country lockdowns and oil prices war has had a devastating effect for Africa and its producing countries and companies. Let’s be clear, this current prices war will have no winner. We urge OPEC and OPEC+ Members, especially African producers, to support all efforts to reach a deal and bring the stability we need to see the end of the tunnel,” Ayuk said.
While the Chamber truly believes that market forces have to work and shape the future of the industry, the situation has become too dire in Africa for the sector and governments to stay idle.
“Following our conversation with US producers, we believe there needs to be a bigger dialogue with shale producers in North America and OPEC Members. This is the collaboration that the market needs to be stabilized and prevent future volatility,” Nj Ayuk concluded.
Chibisi Ohakah
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