Brazil’s energy sector regulator ANP introduced it would cancel all oil and gas tenders scheduled for this year amid rising economic ambiguity attributable to the global spread of the novel coronavirus.
The decision was triggered by the Mines and Energy Ministry of the nation, which earlier decided to cease all pre-tender procedures – along with document and contract drafting – due to the financial situation. The timing of the tenders will move ahead when the uncertainty subsides.
In January this year, Petrobras lauded that it had, for the first time in its history, produced over a billion barrels of oil last year. and it had plans for more after it ended its conflict with the government regarding the so-called transfer-of-rights area in the pre-salt offshore zone that would include as many as 15 billion barrels.
Now, with demand for oil crushed under the coronavirus pandemic and oversupply that’s still rising, production increases are being shelved across the world’s oil regions.
Earlier in March, the pinnacle of the International Energy Agency (IEA), Fatih Birol, warned that oil demand could tumble by 20 million bpd due to the pandemic. This was the same figure that Vitol’s CEO gave in response to a question on how much oil demand could plunge due to the outbreak.