Oil producing country Equatorial Guinea said Monday it will waive off fees to oil & gas service companies operating therein the wake of the coronavirus outbreak.
The Central African country’s Ministry of Mines and Hydrocarbons said this decision was taken to support oil and gas services companies in Equatorial Guinea in the wake of the oil price drop caused by the coronavirus
Schlumberger, SBM Offshore, Halliburton, Weatherford and Wood Group are some of the oil and gas service companies that work there.
International oil companies are being forced to review upstream investment commitments in response to the crisis.
The spread of the virus has led many countries to implement social distancing measures, and this impeding upstream and exploration work in the oil and gas sector.
“We recognize that the oil sector continues to be the largest private sector employer in the country and want to give our local services companies the means to weather the storm and avoid any jobs being lost,” Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima said.
“While it is important to let market forces determine the future, the government does have a role to play in stimulating the market and creating an environment for these companies to stay strong, continue investing and create opportunities for our citizens, he added.”
Oil prices have fallen to their lowest in over 18 years dipping below $25/b and this is expected to cause considerable instability for African oil producers in the Gulf of Guinea.
The ministry has said it will “keep engaging with local and international companies to create the right kind of enabling environment for the sector to operate and grow despite current circumstances.”
OPEC’s smallest producer is desperate to reinvigorate upstream activity and stem a decline in oil output from its maturing fields.
Equatorial Guinea began producing oil in 1995, and its production peaked at 425,000 b/d in 2004. The country has been struggling to halt decline rates averaging 10% a year from its existing fields. Production has been averaging around 120,000-130,000 b/d so far this year.