KUALA LUMPUR, May 18 (NNN-BERNAMA) — Offshore oil and gas (O&G) exploration activities is expected to remain muted in 2020, given the current lower oil price and demand environment amidst the COVID-19, says Bumi Armada Bhd.
Its chairman, Tunku Ali Redhauddin Ibni Tuanku Muhriz said the COVID-19 pandemic has had a significant impact on the global economy.
“In addition to the many lives lost, the pandemic has led to travel restrictions, country-wide lockdowns and other measures which were necessary to reduce the spread of the virus, but these measures have also significantly impeded economic activities.
“Even after a vaccine or cure is available, it will take some time for global economy and oil demand to recover.
“We therefore expect growth opportunities in 2020 to be limited,” he said in the Bumi Armada Annual Report 2019.
Last year, oil prices ranged between US$60 and US$70 per barrel, but has since plummeted to hover slightly above US$30 per barrel currently, with the US crude at US$30.64 per barrel and the Brent Crude at US$33.51 per barrel.
On April 20, crude oil markets were in chaos when the United States’ crude oil futures contract for May plunged to below US$0, while the Brent slumped to near US$20 per barrel.
Bumi Armada chief executive officer, Gary Neal Christenson said low oil prices will result in cuts or delays in investment in the O&G sector, especially for new projects, which would reduce potential growth opportunities.
As an offshore energy facilities and services provider, he said the company would need to operate its assets at the highest optimum levels, secure new charters for available assets and dispose of surplus vessels in 2020.
“We need to remain vigilant on costs and ensure we are reducing our debt while managing our overall balance sheet,” he added.
At noon-break, its shares were among the most active counters, rising by 6.5 sen to 26 sen, with 449.2 million shares traded.
— NNN-BERNAMA