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E&P firms to lose $1 trillion in revenues in 2020: Research

The E&P industry comprises major oil companies that recorded $2.47 tn in revenues globally last year

The Exploration and Production (E&P) companies are anticipated to lose $1 trillion in revenues in 2020, according to a research published by Rystad Energy. It is reported that this year is projected to see a slump on the back of the Cover-19 pandemic.

The E&P industry comprises major oil companies that recorded $2.47 trillion in revenues globally last year. However, those companies are expected to make $1.47 trillion, with a 40 percent decline year-on-year.

The ongoing lockdown and transitory effects of the pandemic have caused big concerns within the industry globally. As a result, E&P companies are forced to reduce spending and cancel projects in the pipeline, incurring significant losses.

Rystad Energy in its report said, “This year might be marked by the lowest project sanctioning activity since the 1950s in terms of total sanctioned investments, dropping to $110 billion, or less than one-quarter of the 2019 level, with most of the projects being deferred.” It is an energy research and business intelligence company.

Now returns for 2021 is also expected to be lower at $1.79 trillion compared to $2.52 trillion forecasted before the pandemic. The energy sector is contracting at a rapid pace, media reports said. The oil and gas industry represents only 3 percent of the whole S&P index. The percentage is alarming as it accounted for 15 percent of the index 10 years ago and 30 percent in 1980.

According to the International Energy Agency (IEA), the oil and gas industry might face demand loss of 9.3 million barrels per day in 2020 as all major economies and companies are forced to shut down as part of lockdown.

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