COVID-19: Global Oil Production to Decline by 5.2% – Report
Global oil production has been projected to witness a 5.2 per cent to 4.5 million tonnes (Mt) decline in 2020 as a result of the Coronavirus outbreak around the world, GlobalData has said.
The data analytics company noted that the outbreak of the COVID-19 pandemic in late December 2019 significantly impacted the mining industry in the first half of 2020, and continues to do so.
It hinted that the overall global lead mine production declined by 3.4% in Q1 2020, compared to the same period in 2019.
According to GlobalData, this was primarily due to the decline in production in China, India and Kazakhstan due to COVID-19 restrictions.
A Senior Mining Analyst at GlobalData, Vinneth Bajaj, said: “In China, production is forecast to decline by 3.5%, to reach 1,985 thousand tonnes (kt) in 2020. The country’s lead mine production declined in the first quarter of 2020, primarily due to restrictive measures taken by the government to contain the virus.
“Several mines and plants had to temporarily cease production activities due to the shortage of workers who could not return to mine sites, owing to the prolonged Lunar New Year holidays, followed by transportation issues due to the lockdown.
“Although most of the lead producers gradually restarted mine operations, lower demand from the automotive sector is expected to constrain mine production in 2020.”
It also stated that production is forecasted to fall by 4.2% in Australia even though mining in the country has not been as severely impacted as in other countries.
Production from the rest of world is anticipated to decline from 2.2Mt in 2019 to 2Mt in 2020 – a drop of 7.1%. Significant declines will be in Peru (8.4%), the US (6.1%) and India (14.1%).
Continuing, Bajaj said: “Looking ahead, lead production over the forecast period (2021–2024) is expected to grow at a compound annual growth rate (CAGR) of 4.2%, to reach 5.2Mt in 2024. Peru, Australia and China will be the key contributors to this growth.
“Combined production in these countries is expected to recover from a forecasted 2.8Mt in 2021 to 3.3Mt in 2024.”
“Key projects expected to commence operations during the forecast period include the Abra in Western Australia and the Prairie Creek project. The Abra in Western Australia is currently undergoing construction. The project’s debt financing has been slowed due to the outbreak of COVID-19, however, the company is targeting its initial production in 2021, with an annual lead capacity of 95kt.
“The Prairie Creek project is currently awaiting regulatory approvals and permissions. With a total US$279mn pre-production capital cost, the project is expected to commence operations in 2022. Once commenced, the project is expected to produce 47.6kt of lead annually,” he said.
Peace Obi with agency report