The world has changed quite dramatically in 2020, creating significant pressure on existing oil and gas projects, especially those in developing countries counting on their petroleum sectors to increase national prosperity. Agencies responsible for the petroleum sector, finance ministries involved in planning, and country leaders will need to adjust their ambitions and acknowledge the risks inherent in this volatile sector. It is important for them to understand the changes, work with different scenarios to support their planning, and update their policies and systems. A more fundamental re-evaluation of policy goals may also be called for.
An assessment of the prospects for a national petroleum sector in this changing environment should prompt a government-wide review of sector objectives and of its potential to create long-term value for the country. National investment in the petroleum sector should be considered in relation to the potential returns it can generate (in economic growth and revenues) and the negative impacts it could have on other national objectives, such as climate goals, environmental protection and fiscal stability. This also concerns investments in NOCs, capacity-building, local content development, and in acquiring greater stakes in upstream assets. When petroleum agencies coordinate with finance, planning and environmental agencies, and when the objectives of the petroleum sector are thoughtfully embedded into the national development agenda, the resulting strategies will be more resilient and prepare new producer countries for the future.
This series of meetings on fostering resilience connected governments, albeit remotely, at a time of great uncertainty for the industry, for nations and for individuals. These meetings helped officials from the group navigate this crisis, by exposing them to different viewpoints and sometimes shedding a harsh light on their aspirations for the sector. It is clear that some emerging petroleum sectors will not take off. An early understanding of this will help countries avoid wasting investments in resources that will not provide a return.