Oil and gas have also become two of the main economic victims of the coronavirus. The executive director of Qatar Petroleum has announced a 30% cut in its expenses this year, in view of the fall in the price of black gold and gas in recent months.
In March, oil prices collapsed, after a new wound opened up between two of the world's leading oil producers -- Russia and Saudi Arabia -- over how to respond to the possible effects of the current health crisis. Energy Minister and CEO of Qatar Petroleum, Saad Sherida Al-Kaabi, said in a virtual meeting with the U.S. Business Council that despite a 30% reduction in spending, "plans to expand liquefied natural gas (LNG) capacity are still underway".
"We're going through budget reviews. In June we will have to face a reduction of around 30% in expenditure, CAPEX and OPEX," reiterated Kaabi. The acronym CAPEX refers to capital expenditures associated with physical goods, while OPEX is operating expenditures related to certain operations and services.
With the coronavirus crisis and the slowdown in global activity, caused in part by travel restrictions imposed by governments around the world to stop this pandemic, the world's leading oil and gas companies have had to dramatically reduce their spending.
Even so, the CEO of Qatar Petroleum expects oil demand to return to pre-crisis levels in a year or two. At this conference he also said that natural gas prices have suffered less due to continued demand for electricity. Qatar Petroleum, a major player in the international oil and gas industry, is the world's leading exporter of LNG (Liquefied Natural Gas). Al-Kaabi has stressed that the reduction in expenditure will not be linked to a reduction in its gas exports. QP wants to increase its LNG production to around 110 million tonnes per year (mtpa) by 2024 compared to 77 mtpa currently in the first phase of its expansion, according to Reuters news agency.
Al-Kaabi has warned that "these plans are still in progress", despite delaying the adjudication of commercial licitations for the expansion project from April to the end of the year. "We are at full steam, we are going to expand", he stressed, according to the information published by the aforementioned agency.
The Qatari company made this announcement a few days after signing an operating agreement with the French oil company Total to acquire a 45% stake in two oil blocks located in the Republic of Côte d'Ivoire basin. Previously, in May, this company signed an agreement to acquire 30% of the exploration and prospecting rights that the French company Total has in three blocks of the Campeche Sound, in Mexican waters. QP's CEO expects that a number of large international companies, such as Exxon Mobil, Chevron or ConocoPhillips will participate in the future bidding process, once the capital costs of the process are defined.