Oklahoma’s governor has called on US President Donald Trump to declare the coronavirus pandemic an “act of God,” a step to help oil-producing states contend with a crude glut that caused futures prices to close below $0 last week for the first time.
“Over-production of oil continues to threaten the economy,” Governor J Kevin Stitt said in a letter to Trump that Stitt posted on Twitter late on Saturday.
Declaring a “force majeure” or “act of God” would allow oil companies to halt operations without risking that land leases will be canceled for stopping production, Stitt said.
Today I sent a letter to President @realdonaldtrump to ask for him to declare the #COVID19 pandemic an “Act of God” to provide aid to our oil and gas industry and to protect the environment.— Governor Kevin Stitt (@GovStitt) April 25, 2020
Oklahoma, we are in this together and we will get through this. pic.twitter.com/JSnNCWhXfz
Oklahoma’s energy regulator said on Wednesday that producers could close money-losing wells without losing their leases, the first victory for struggling US oil companies seeking relief from states after the market crash.
US production reached a record-high of near 13 million barrels per day late last year, but the pandemic has cut global consumption by 20% to 30%, or up to 30 million bpd.
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