(3 minutes read)
· The African Energy Chamber, the rallying point for oil
producing countries in the continent, anticipates that operators and
services companies will be hard hit on account of the coronavirus
· According to the chamber’s estimates, Africa may lose over
US$110 billion in taxes, petroleum exports, jobs, and contracts to
local companies over the next three months, if the contagion continues
without abatement.
· Immediate cancellations or postponements of tax payments for
a period of up to three months at least for African owned service
companies, indigenous exploration and production companies and
international and local companies working on exploration programs is
one suggestion.
The African Energy Chamber, the rallying point for oil producing
countries in the continent, anticipates that operators and services
companies will be hard hit on account of the coronavirus. According to
the chamber’s estimates, Africa may lose over US$110 billion in taxes,
petroleum exports, jobs, and contracts to local companies over the
next three months, if the contagion continues without abatement. The
exploration programs petroleum excavation companies have already taken
a hit. They are looking at ways to raise capital to successfully
drill wells as a part of the strategy to continue with the efforts of
finding more oil to overcome the difficulty of low prices.
To address the growing menace, the chamber feels that some tax sops
should be extended to companies involved in the petrochemical sector.
Immediate cancellations or postponements of tax payments for a period
of up to three months at least for African owned service companies,
indigenous exploration and production companies and international and
local companies working on exploration programs is one suggestion.
The Chamber believes that this move will help preventing job losses
since the outgo from the employers would be minimal and that money can
be used for paying salaries to the employees. The chamber also flagged
the sinister impact of price war and its impact on the bottom lines.
According to its reckoning, the low oil prices, which is presently
ruling at below US$ 30 per barrel would push many oil companies out of
business. This can be halted only if the largesse flows from the
government in terms of tax cut and deferment.
