The oil and gas industry will experience investment cuts totalling over £23 billion due to the Covid-19 coronavirus pandemic. Over the course of the year there will likely be significant staffing and supply shortages as well.
The ominous prediction comes from Rystad Energy, an independent energy research and business intelligence company. They suggest experts don’t yet know when the effects of the outbreak will ease, and that the situation could worsen.
Reduced Oil Demand Lowering Investment
Rystad Energy revealed oil prices dropped by nearly 25% already in 2020 due to lower demand and slower economic growth. They believe this will result in oil and gas companies significantly reducing their investment budgets. The most affected will be offshore exploration and production players, as well as American shale operators.
Deliveries of oil production equipment could also be delayed up to six months due to travel bans and staff shortages. There are currently 28 floating production, storage and offloading vessels being built. Most of them are being built in either China, South Korea or Singapore.
Fast-Tracked Developments Still Face Delays
Rystad Energy’s Oilfield Service Research chief, Audun Martinsen, said: “Our current assessment forecasts that Covid-19 could result in global exploration and production investments falling by around $30 billion [£23.4 billion] in 2020.
“Although operators and contractors are looking into ways to make up for some of the time that will be lost by fast-tracking other stages of development, we anticipate first oil or gas for these projects will face clear delays.”
Italian Emissions Down Due to Coronavirus
One somewhat positive side effect of the Covid-19 outbreak is a massive reduction in emissions in Italy. Since the country went into lockdown, air pollutant mapping technology has revealed a ‘massive decline’ in air pollution. This is specifically in relation to nitrogen dioxide emissions in Italy’s northern regions.
This information was published by the European Space Agency, with data collected from the Copernicus Sentinel-5P satellite.
The Mission Manager for the Copernicus Sentinel-5P, Claus Zehner, said: “The decline in nitrogen dioxide emissions over the Po Valley in northern Italy is particularly evident. Although there could be slight variations in the data due to cloud cover and changing weather, we are very confident that the reduction in emissions that we can see, coincides with the lockdown in Italy causing less traffic and industrial activities.”
The Sentinel-5 Precursor, or Sentinel-5P, is the first Copernicus satellite mission focused solely on monitoring the earth’s atmosphere. On board the satellite is the Tropomi instrument which maps trace gases like nitrogen dioxide.
The Tropomi is the most accurate instrument available today to measure air pollution from space. It is also able to map ozone, formaldehyde, sulphur dioxide, methane, carbon monoxide and aerosols.
To learn more about different energy suppliers and tariffs that can benefit your business, contact Business Save and their team of highly experienced energy experts.