Oil and gas explorers may need to rethink their capital expenditure on activities conducted in Africa as the oil price continues to weaken. Low oil price may affect African projects. PHOTO: Accountingclub.ca This is according to the latest analysis on the oil and gas industry released by professional services network, PWC.
“Oil and gas explorers will be relooking at their budgets and deciding where to allocate their limited capital spend given the substantial decline in the oil price. Overall, low oil prices could have an impact on production undermining certain players in the market,” said Chris Bredenhann, PwC Africa oil and gas advisory leader.
PWC said that the West Texas Intermediate (WTI) price for crude oil recently plunged below 49 US dollars per barrel after reports of an oil oversupply in the United States. Current reserves are at their highest level in 80 years.
( READ MORE: When will the oil price rise again? )
In its ‘Fit for 50 US dollars oil in Africa’ analysis, PWC stated that Africa has seen major success in the exploration for hydrocarbons over the last 10 years in West Africa and, more recently, East Africa too.
“Oil & gas companies now need to plan for the upturn that is […]