New petroleum-producing countries are facing key challenges linked to the COVID-19 pandemic, including a crash in oil markets, a significant decline in investments, along with long-term impacts of the global transition towards a lower carbon economy.
More than 70 government officials, business representatives and industry experts met to discuss how this new reality at the Annual General Meeting of the New Producers Group (NPG).
The NPG is a collaborative network of over 30 countries that are relatively new to the oil and gas industry, coordinated jointly by the Commonwealth Secretariat, Chatham House and the Natural Resource Governance Institute.
Over three days (2-4 December), members examined a wide range of issues and trends, including various scenarios for the future of the oil and gas sector, the increased risks and uncertainty of value realisation, and the impact on jobs, economic growth and investments. They discussed how to build a bridge to a sustainable economy that is not dependent on petroleum.
Members focused on the need for countries to respond to the changing reality and adapt national strategies early. This includes, for example, avoiding unsustainable debt linked to expectations for the natural resources sector and working to diversify the economy now rather than later, as the process can take decades to bear fruit.
Commonwealth Secretariat Economic Adviser Naadira Ogeer said: “This is truly a critical period for the oil and gas sector, which will very likely see structural transformations within the next 10 years in light of shocks from the pandemic and the global energy transition.
“Commonwealth countries and businesses must thoroughly reflect on these circumstances and not delay in putting in place robust, long-term policies that will ensure economic recovery, stability and growth over the coming decades.
“This includes transparent and fit-for-purpose strategies for re-investing petroleum wealth to benefit social, environmental and economic development.”
She added that the Commonwealth Secretariat offers technical advice and support in this area to member states who request it. Each country faces specific circumstances that would influence their strategies and trajectory for building resilient and inclusive economies.
The NPG meeting lay the groundwork towards important discussions around post-COVID socio-economic recovery at the forthcoming Commonwealth Heads of Government Meeting next June in Kigali, Rwanda.
For more information about the New Producers Group, please contact [email protected]