Low oil and gas prices, lockdown and mobility restriction across several countries will delay several oil and gas projects from complex deep-sea projects that depend on men and material from across the globe to refinery expansion and pipe-laying, executives and analysts said.
The oil industry is under twin assault from the demand destruction caused by Covid-19 and a price war between key global producers that has brought about a record quick drop in prices. Lockdown and mobility restrictions have induced economic uncertainty and are making it harder for executives to manage projects.
Complex upstream projects are likely to be hit the hardest as they depend on an intricate global supply chain of expertise and equipment, executives said, adding that this would result in many exploration, development, and enhanced oil recovery projects stretching beyond original schedules. This will definitely delay production from many new fields, they said.
Vedanta said it has sought extension of exploration timelines for its oil blocks won in recent auction rounds primarily due to the lockdown delaying seismic surveys.