The outbreak of the coronavirus disease is to cause extensive staffing and supply shortages in the oil and gas industry, as well as a fall in investment of around $30 billion (£23.4bn) in 2020.
That’s the suggestion from Rystad Energy, which suggests while experts do not yet know when the effects of the epidemic will ease, they state ‘the situation will worsen in March’ and predict the impact of the virus will affect the entire global industry.
The company said oil prices have slid by almost 25% this year as a result of lower demand and slower expected economic growth, a situation which will result in oil and gas companies scaling down their investment budgets, especially shale operators in the US as well as some offshore exploration and production players.
According to Rystad Energy, the virus outbreak could postpone deliveries of oil platforms and other equipment from yards by at least three to six months, due to shortages of staff or supplies, as well as travel bans.
Out of 28 floating production, storage and offloading vessels under construction, 22 are being built in China, South Korea and Singapore.
Audun Martinsen, Head of Rystad Energy’s Oilfield Service Research, said: “Our current assessment forecasts that COVID-19 could result in global exploration and production investments falling by around $30 billion (£23.4bn) 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.”