Developing nations’ oil and gas income will fall by 50% to 85% this year to a more than two-decade low if current market conditions persist, the International Energy Agency and OPEC said in a rare joint statement on Monday, citing recent IEA analysis, according to a report from Reuters.
This is likely to have “major social and economic consequences”, notably for public sector spending in vital areas like healthcare and education, the statement from IEA director Fatih Birol and OPEC secretary-general Mohammad Barkindo said.
According to the Reuters report, oil prices slid below $30 a barrel on Monday as the global spread of coronavirus became more entrenched, leading to lockdowns as the global economy appeared to be headed toward certain recession.
The oil price rout was exacerbated by the collapse of an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia which had been withholding production from the market.
Reuters said the statement did not expressly mention the alliance’s leaders Saudi Arabia and Russia, which have started a price war for market share, but called for market stability.
Guyana began producing oil in December 2019 at the 120,000 barrels per day Liza Phase 1 Development with an initial projected government revenue of US$300 per year during the cost-recovery period. With falling oil prices and worsening global market conditions, this projected revenue is expected to decrease.