The oil and gas industry is one that operates like ‘ants in an anthill’. The industry relies hugely on the global value-chains and a successful cooperation and movement of people, goods and services between foreign and local contractors in order to build a strong and resilient industry.
But the ongoing travel bans and restrictions are preventing the free movement of industry players which in turn is preventing a lot of projects from actualisation and this is gravely affecting Africa’s oil and gas industry.
The European Union, EU, released a list of countries that are allowed to enter Europe and only 4 African countries (Algeria, Morocco, Rwanda and Tunisia) made the cut and it is bad for the continent.
Major international oil companies such as Total, BP, Shell, Eni, ExxonMobil, Chevron or Equinor and independent firms such as Kosmos Energy, BW Energy, Maurel & Prom or Tullow Oil that operate a major share of Africa’s daily oil and gas production are presently not operating at their full capacities due to travel restrictions like that of the EU’s. However, the guru’s in Africa’s oil and gas industry are not the only ones being limited, as they directly impact the operations of the major international services and Engineering, Procurement, Construction, EPC firms supposed to work on major projects, such as Saipem, TechnipFMC, Schlumberger or Halliburton.
Coronavirus’ impact on the oil and gas industry
The global oil and gas industry was punched hard at the time when the pandemic was killing thousands and hundreds of new cases were being announced in various countries on a daily basis. This led to the lockdowns of many countries that were initiated as a way to fight the virus by controlling its spread. The lack of movement of millions of people and the halt of industrial activities pushed the oil gas industry to the ground, causing prices on markets to drop to an 18-year low and West Texas Intermediate, WTI, prices dropping to a negative for the first time in history.
Africa’s oil and gas industry loses billions
Many energy projects worth billions of dollars have been delayed due to the ongoing pandemic and the introduction of lockdowns and travel restrictions it came along with. However, economies are gradually reopening but travel restrictions are still a problem for industries and it is adding up to the long list of challenges in an industry that plays a significant role in Africa’s economy. And this is a threat Africa’s energy projects as it is preventing them to progress.
The need to revise travel policies
The Executive Chairman at the African Energy Chamber, Nj Ayuk, has called for new and improved travel policies that won’t affect the industry and the recovery of economies.
“We cannot base our recovery narrative and hopes on the oil & gas sector and at the same time forbid the movement and travel of the workers and employees supposed to make that recovery happen. We are urgently calling for pragmatism and the adoption of realistic measures that put workers’ safety and economic recovery at the center of public and travel policies priorities,” he advocated.
A coordination by governments and the big players in the industry is needed to aid the sector regain its former glory and also help the recovery of the global economy which is of importance to all.
