The COVID-19 pandemic and collapse in oil price has and still taking its toll on the oil and gas industry globally. This oil price saga has resulted in massive cuts in state budgets, public spending, loss of contracts and employments. A lot of conversations have been going on in the oil industry. A set of people believe the ease of lockdown may accelerate the peak demand trajectory while another believe that oil demand will struggle to regain an upward trajectory. Investments in the oil industry is expected to fall further such that supply shortages could eventually emerge. Ironically, despite enormous downsides to the pandemic, the climate and environment has seen better days. There has been reduced pollution from cars, airplanes and industries due to worldwide enforcement of lockdowns. This could convince most oil companies that wide adoption of electric vehicles may happen quicker than they expect.
Stricter regulation on emissions could as well plunge down oil demand beginning from 2030 or 2035; thereby leading to a rapid shift into renewable energy. It has been previously predicted by the International Energy Agency (EIA), that global oil demand which has risen by an average of 1.5m barrels per day (bpd) each year in the past decade to reach 100m bpd in 2019 may start to witness slower growth from 2025. Many promising exploration project prospects and drilling plans have been delayed and some sanctioned own to the oil crisis. African countries that are expected to be particularly hard hit by such delays and uncertainties include Uganda, Ghana, Angola, Kenya and Nigeria. For instance, Tilenga project by Total in Uganda, Bonga Southwest Aparo field by Shell and the Etan and Zabazaba fields operated by Eni in Nigeria. BP and Kosmos Energy’s Greater Tortue Ahmeyinm (GTA) LNG project in Mauritania and Senegal; Exxon Mobil and Eni’s Rovuma LNG project in Mozambique have all been postponed. Pecan Field development in Ghana has been placed on hold. Woodside Energy Sangomar Offshore Oil project in Senegal, which happen to be Senegal first oil venture was sanctioned. In the case of drilling prospects, Valaris drilling activities for Chevron in Angola, BW Energy operations on the Dussafu Marin license in Gabon, exploratory drilling by FAR Limited in Gambia, drilling works of Maersk in Ghana Jubilee and TEN fields have all been placed on hold. The Exxon Mobil ‘s offshore project in Guyana is also affected, creating a potential delay in production start of up to 6 to 12 months. The delay of these exploration and drilling projects is expected to further impede discoveries of new fields and development.
The new norm (lifestyle) has forced companies around the globe to rely on technology to stay on course. Some hold virtual meetings while others monitor vital assets through it. It has earlier been projected that technological solutions will play an important role in the growth of Africa’s oil and gas industry, it is clear evident now that it is the way to go for new solutions for the entire globe. Technology will help African oil and gas companies to function more efficiently, thereby boosting profit share, which invariably will boost African nations economic growth. These technological advances could come off as; developing new ways to drill oil wells and handle rigging equipment, designing new seismic data collection codes and software, improvising new ways to monitor petroleum data systems. Technological measures should be put in place, such as use of machine learning and artificial intelligence to predict future problems and also generate possible solutions; simulation of drilling rigs and more intelligent completion to enhance production. Efforts should be made to solve the recently encountered problems which include inadequate storage capacity. Individual nations should see to development of storage capacity both onshore and offshore. Oil and gas firms should collaborate more with local tech startups or firms to incorporate or set up these technological abilities. Once the market shows some signs of improvement and gain more confidence, partnerships should be fostered with investors who are willing to transfer new technology and modern day skills. For instance, in 2019, Angola based Friburge oil and gas, a pan African mining service provider, with a growing presence in the Sub-Saharan Africa partnered with international technology providers to drive innovation, efficiency and sustainable environment. More companies should look into this kind of partnership and take advantage of such opportunities.
Climate change has received a wider global attention in recent times own to the Climate strike action, which started 20 September, 2019. The first protest which took place across 4500 locations in 150 countries was inspired by Greta Thunberg, a Swedish climate activist. The recent crisis although induced lower emissions but for the wrong reasons. Climate change improvement in relation to the technological measures are tools that could be incorporated into the oil and gas game changer and digitalization scope. Oil producing and oil servicing nations need to come to terms with how they are silently or largely contributing to climate change. Efforts made towards building more efficient technologies, clean energy and greenhouse gas reductions. More attention paid to the sustainability and energy reports quarterly or annually produced by these oil firms. Policy makers could take on the golden opportunity to combine economic recovery with climate goals to design new measures bearing similar perspectives in mind.