Travel restrictions and how to protect yourself. Coronavirus prime time special coverage on aljazeera. Will record breaking cuts and production be enough to stop the Oil Price Slump crude producers led by saudi arabia and russia agree to the biggest of the reduction in oil for say so who will be most affected. Is inside story. Hello welcome to the program burn its me. Factories shut grounded cars and trucks off the roads in many cities under lockdown demand for oil has collapsed due to the coronavirus pandemic and Oil Prices Fell further when major producers saudi arabia and russia couldnt agree on cutting output now theyve set aside their dispute opec and the oil cartels allies agreed to a 10 percent Production Cut the biggest ever but the deal to switch off the taps by 10000000 barrels a day still needs approval from mexico. These circumstances require swift and timely measures all of our Oil Producing countries must pull efforts to change the situation related to the substantial over production of oil in the world the us it didnt take part in the opec discussions on thursday which are the focus of a meeting of g 20 Energy Ministers on friday some analysts say Production Cuts will hurt smaller nations that depend on oil money opec and the International Energy agency warned last month that countries such as angola nigeria and iraq could lose up to 85 percent of the oil and gas income this year. Lets introduce the panel in london alex shindle our president at Energy Intelligence an oil and gas Research Company in new york one health a Senior Research scholar Columbia University and in johannesburg in south africa n. J. I ork chairman of the african and the g. Chamber thank you for joining us gentleman alex simple question ill start with you is a 10 percent cut going to be enough well i think its the best they could come up with at this point i think any deeper than that was going to really stretch the producers ability to actually deliver so the group signaled 10 millions what they want to do and they achieved it so so i think from what was possible its a pretty good outcome though is it going to actually rebalance this market in the short term absolutely not with the coronavirus hitting demands dramatically you know the deficit through the 2nd quarter and even the 1st half of the year is going to be massive so 10000000. 00 is a good start but its not going to fix the problems and so on what do you think do you think will it be enough wont production wont demand decline less than the Production Cut more than the production well tell me and the target has been announced. What would be the best outcome of the meeting somebody and be sure started some people to n. B. C. That cannot be achieved its the same time too low because the market needs more to rebalance but were going to see additional counts will be announced today from the g 20 and certainly we do see reductions in the us even by Market Forces if not by political decisions. And jay in johannesburg for developing nations is 10 percent going to be enough is going to hurt them it is not going to have heard her say big deal on distain deputies the cuts for example if you look at nigeria you see look at angola you look at about 1000000 barrels coming out of of nigeria sorry you look at about 100000 coming out of nigeria i mean maybe another 70 or 80000 coming out of one boiler it is going to hurt in the short term but in the long term its going to be beneficial because the Current Crisis right now speaking for developing countries like nigeria will likely turkey is just not it just doesnt help the countries budgets it does just as it has with jobs and we already see a lot of job losses so will. We want to be in good buckets when you look at it from an African Press specked if and when can i ask you how he would saudi arabia and russia have been to agree big cuts and i want you to explain a little bit about this mean field game theory analysis youve been writing about which suggests that for the very strongest producers like russia and saudi arabia they can afford to ride this out and push the smaller ones on the shale produces out of the market you know this is a very exceptional crisis i mean this is probably the biggest or the shock that this is done has received since the 1973 1st or suck all the time in that in 73. 00 the price and thats why the price moves on the upside this time its on the downside but this you know. And the implications are in my view have seen a magnitude its going to reshape the production map of the oil industry its going to change the system of governance of the of the system as well you know. But yes are the analysis that some of my colleagues in a Company Called funder called kairos have done and they clued he has met all the mathematics and some of his colleagues who have invented the means he has a branch of game theory there and that this suggests that opec is not contrary to what it up and says in the business of stabilizing places its really in the business of optimizing revenues and managing to conflicting objectives that of having having high price and having a high market share worth object these are incompatible theyre in conflict therefore the market cycles through peers or price increases and dramatic collapses the mother was signaling for some time that were about to meet. A cliff moment when the price drops off a cliff and that the. Large producers the large low cost producers like saudi arabia and russia where pop be waiting for some kind of a shock to get in to keep moving the stock was the koran there virus so i think. What they have done increasing supply in the face of the demand collapse increases the impact and he has offered them a chance to drive off some of their competitors. I think theyre achieving those objectives the 10000000 goal that was announced yesterday were certainly not prevent a price so the price drop or push the price back up what it might do response power or avoid at the moment when we run out of Storage Capacity but the result in any event is that its going to be much more difficult to finance Oil Production in some more challenge sectors including in the u. S. And. Were going to see some reductions at least at the margin in Production Capacity so this would increase the market share up not uses alex to go along with any of that this is a coronavirus was the opportunity that russia in saudi arabia might have been waiting for you know i read and. Piece there and at the very interesting and it did align with a lot of rhetoric was in the market says that the opportunity for the low cost producers actually deliver on what what the what they felt was the only fair way the market should operate why should lower cost producers shut in production and higher cost producers benefit and has been for many years a sway and the coronavirus did give us this interesting opportunity i think what happened here and i think what we found out last week is that russia and saudi arabia in particular were not really prepared for that pain were taken to actually raise their production to maximum levels and then see how low the price goes to drive out everybody else so you know the bait was over how long could these big producers manage Lower Oil Prices and you know i think what i think why this deal came together is that the big countries said you know what its not your interests even over a 6 month 12 month period to have prices be super low even that drives out higher cost producers the economies politically economically they just couldnt really face that reality is i mean thats how i see it playing out and why they kind of come to the table. Quicker than i think many had expected and jay nigeria set its budget last year xpect in a price of about 57. 00 a barrel for oil its had to change its budget sense can come to nigeria obviously africas subconscience Biggest Oil Producer cani geria ride this out it hasnt got the luxury that saudi arabia and russia have a big financial reserves has it. Of course they do it and its going to be very very. If you caught 4 for nigeria nigeria unlike angola you dont really have a Big Sovereign Wealth Fund that could you can count us to share shark economy put some release and recreate get what you see right here is that if these african countries have to then really have to really rely on opec d you have to what we call big because it do see orpik as a source for stability but i think its just its even bigger than reserves debbie have its also looking at trying to you investment into fields that have to be developed some of them really play one to increase production and to really create in your whats for the for dim to see more oil or more gas and i think this sheet of. Price war has really given as if you thinking and not just when it comes to economy diversification big damage especially when from crude or sword focus on crude to release a look at how we can play with gas and really see how gasoline dissection going to really help us reach shipped it balance of the market so budgets are tight it is very good because for most countries and lets not just look at nigeria lets look at it with korea or guinea lets look at gum ball and look at a look at congo but africa is really taking a lot of heat because projects in mozambique would exit a more violent others they have been not been counsel but being bored or suspended senate guard had grigg gas fines would be cosmos and some of the idea of order was bornand or delayed and this is him with woodside and karen so were really seeing the brunt around here and we hope that this would ease is really going to change and when this happens the african street just go into a depression and get out get everybody africans started was in jobs and it creates a lot of so shocking shoes. We the area around the continents of the deep brain can expect asians when it got better saudi arabia or russia or god did it got the gulf states in the United States and one just back on something that alex said before do you think saudi arabia russia work caught out slightly by the scale of the drop in oil prices they werent quite prepared for it they practice a policy of sucking on the trying to relieve some of the market use in the face of the downturn but theres limits to what they could do and actually i think there were marketing and physical limits saudi arabia has been shipping out a lot of thank you is full of oil that has had trouble finding customers for them i think both countries faced problems challengers that were not just financial challenges i think they could withstand 2 of those challenges thanks to their financial buffers but they just had trouble pushing more oil in the system saudi arabia has increased production for manatee we saw the response to the supply response immediately after the breakdown of the opec meeting on march 6th so they were prepared to go into production but the market could only absorb so much more production so then i think that the time was right to trip through the mover played out the rest of the word came together and agreed to cut production and then were going to see another meeting today at the g. 20 to discuss further Production Cuts so the objectives i think was achieved but now its time to do. A better back of the its and and adjust to the reality that the market is getting saturated and the capacity Storage Capacity there were the getting stretched as well and ill add to the temperature and 10 percent Production Cut enough for us shale produces well i think youre going to see i mean next week well see how the u. S. Shell produces react to it weve got the g. 20 meeting today where you know it but were going have a lot of discussions around cunt. Is that are not part of the 0 plus alliance to see how much actually theyre going to be participating that were hearing anything up to 5000000. 00 barrels theyre more with the next week is the kind of he he week to watch for sort of us shell producers and what exactly are u. S. Production in general or what thats going to what theyre going to be able to deliver and whether theyre going to deliver just the Market Forces impact of Lower Oil Prices than the shut in that will have to show because prices are in the 30. 00 range or whether theres going to be more active management the market is the Texas Railroad commission and other states that are talking about doing something but this is going to take as we understand about oh a week to sort of play out because its needing theyre going to happen and of the 14th next week with the Texas Railroad commission and then sort of a final decision by the end of next week to sort of see how much the u. S. Is really going to be able to commit actively or sort of just by Market Forces and n. J. The developing countries are almost side actors in this game between saudi arabia russia and the u. S. To they have any leverage a tall theyre the ones that are really going to feel most of the pain if they have any way to put pressure taught anyone i think the already putting pressure on them see them true membership in opec and will pick plus dont forget huge role in nigeria and who are likely to rugby if played or pick presidency right now is run managed by an african and i dont hear from jerry and did not share that when it comes to Market Forces of course that we really have done much with looking at how much we import and how much we use china still has to come out i think between here because their prices bed their head has been a continuous push among african states on how down how does this need to go about nordic people in countries with very happy we get cuts and what happened and will pick yesterday big deal united together im not talking. A lot many of them too accepted because they understand that if their we get points that belies market its really good for us a bit then what has happened is that they have the Lessons Learned from yesterday was in your 4 course on exploration and seen it got to increase young market share so that it can reasonably and thats it for all in shipping is image dialogue if you john doesnt get to listen when he concentrated on in there being environment so that you can be a player and so on do these developing countries have any leverage or is it all of a all out of the game and its all up to saudi arabia and russia and they do anything saudi arabia and russia are really exciting a lot of influencing and controlling the situation of course the primary driver is there a pandemic but you know that the the 2 countries that are the super powers are or the largest exporter so it really played their cards in my view quite well and have made the most of this these very difficult circumstances and to go back to the point you raised before in terms of the response of the show producers in the u. S. Were seeing a response to the company i was mentioning congress and work with money to succeed in the in the dont pass in the u. S. And money to serve the recount but also the fact whose whose are going through the fracking where its weve seen a dramatic drop in in fact whos in the number of. Transcribes are active in the in the basin settle the last month weve seen a decline of 105 cubes deep in the in the series thats a very dramatic climbs to keep the present month month a month decline 60 percent year on new news probably more the plan is coming and i like the u. S. Is going to be under some pressure to cut production itself it costs of cant officially do it through it because they want to trust laws how could the u. S. Play its role in cutting production the taxes Railroad Commission they do have the ability to sort of manage texas oil supply so i think if anyones looking for active market in the u. S. It looks like through Texas Railroad commission is the most likely way that could happen though this nagging isnt the commission has not been utilized for many decades we dont really know how we operate and the current sort of 2020 environment but we do know that the 3 commissioners are not texas for a commission at least one of them its very favor of some active Market Management you need 2 thirds of the members a vote for it for something actually happens so its a matter of convincing one of the other 2 to sort of go along with this but if youre looking for active Market Management this seems like this would be the most likely way it could turn out is it likely im not im not quite sure where youre Different Things i think this one commission is quite optimistic but again you know the issue i have to trust is that of resistance by the Oil Companies the sort of us resistance in general that i think isnt free market its a pretty tough its a pretty tough thing to sell to the u. S. But well see as we as we know were in extraordinary times and n. J. With oil prices at these current levels what are the risks the knock on effects to other production projects coming up particularly in Subsaharan Africa more saw them on the wrist the number of course my jurors are going up if you look at our resources just. Announce force by showing camry earlier today earlier this week b. P. Announced forced my show on a lot of projects and that is done already put a lot of projects id raise. A lot of exploration is not race and that is also something that you have to really look at i knew you were in your view or youre really have to doubt how are you going to solve by the troggs pyramid is going to be whole big because exploration is still going on and on some studies are still going on bed big big ticket items the big money projects its also a game also ive been very very strange and one of the things that we have to really worry about is you have to really look at what is going on in offshore platforms with the current of viruses because now companies not paying more attention to debt and the not really trying to invest in a lot of your more projects bed for africa i think as well we have to this is a great reports for us to really step it up im put some kind of a recent release that a Company Companies need to look at must be scott parents granted extensions on p. C. s weight you need because you really have to use these as in the what senior track you investment and not kill project i mean we have to take it we have to look good or im going to be an environment create that framework for more exploration but really short African Companies to use to use gas and to really look at it you shouldnt be able to abandon whole car content or not to do some of the policies that weve been putting in place to really drive up an incline and i really drive an exploration so you are going to see projects being delayed the doubts not we have to be really great get right back to lead and really drive it i think is probably the same for large american countries or small producers around the world and were going to have to have and opec an opec meeting again later in the air to agree further cuts. Thats quite possible but the whole system of governance is changing so you see the role that the i. E. E. E. Has been playing you know organizing helping organize a g. 20 meeting this is a very significant change. And theres going to be changes within the us as well so part of the issue in india us in terms of whether or not to agree to Production Cuts announced send managed by the new government at the state or federal level involves a conflict between the independent producers and the majors the independents support but the action cuts the majors oppose them and their public b. Would not mind seeing the he independence or down their operations or put some of the assets for syria with themselves up for sale so theres a theres a lot of restructuring going on in the potentially and there was some consideration that restructuring going on before the pandemic its likely that the recent developments we accelerate that trend and that we can see shaping of the of the a landscape in the us as well as in the world at large and i see you always do you also foresee another meeting as the industry reshapes of each meeting further in the air for further cuts. Well i think i mean opec is really good at dealing with the crisis right in front of them and i think that this was the way of dealing with the crisis right in front of them and i think if anyone would say they know what the situation looks like globally economically from the Oil Market Perspective in 6 months you know that its just impossible to tell given that were sort of at the heart of the chronic virus demick right now especially in the west so i mean i think theres always a chance of youve got to come back and reexamine Market Forces and see how things are going in you know are people hearing the 10000000 barrels a day this is going to be a really important thing to watch but you know they will opec is good kind of responding to a crisis and thats what weve seen this week you know a major crisis and they pulled off a pretty improbable deal and j. R. C. You know to go away there do you see a further meeting later this year for further cuts and can the developing countries sustain those. I think it is going to be a meeting and it is going to be for the cards that needs to be for the cut president from god bless him he has been not always been the biggest friend of opec better i think with some of his most recent tweets hes really encouraged to work and i think thats a sea change when we look at the perspective of washington and this president and how he had he has a huge opening and the thing now out of the presidency gives the United States now he started 0 pegged as a force for stability all big that hes going to do with you that said im one alexander how have mentioned there is going to be like the another maybe because you have to really see a Global Market this is not going to sit without a global cut this is not going to be successful but one other thing. Is going to be compliance how are we going to ensure and force compliance and the need to get together within the next 60 next 60 b. S. To 1st of all look at compliance how we think how weve managed that and also look at us in the bill and reduces the need to come to a game can be only asked the need to come in and we need to bleed young parts of those know we and canada because in canada right now a pint of beer is more important than a barrel of oil and we need to shop this industry ok world fortunately out of time gentleman but thank you to all our guests alex antoine health and j. Iraq and thank you too for watching you can see the program again any time by visiting our website algiers there a dot com and for further discussion go to our Facebook Page facebook dot com forward slash a. J. Inside story you can also join the conversation on twitter our handle is at a. J. The inside story from me and the whole team here in doha by phone. Rewind returns with a new series i can bring your people back to life im sorry im brian new updates on the best of aljazeera documentaries they has been a number of reforms put in price since the private graham film rewind begins with mohammed at the time when i was in the i was the global for a. And the other student i was very fortunate to be awarded a scholarship rewind on aljazeera when diplomacy fields and fear sweeps in our borders are wide open wide open to drugs terrorists weve proven the barriers are built to impose division and its not to sixtys instead of being an obstacle or to go east into became another opes to closer to peace in a 4 part series aljazeera revisits the reasons for divisions in different parts of the world and the impact they have on both sides walls of shame on aljazeera. The worst daily toll of any country in the u. S. Records more than 2100 coronavirus deaths the World Health Organization warns against easing restrictions. Lowered and i missed on the attack and this is al jazeera live from doha also coming up a cut if you imposed in 31 provinces across turkey including the biggest cities istanbul and ankara. South korea announced as plans to use