Of course, it is evident that if oil prices fall we will get less revenue. It doesn’t take rocket science to figure this out. What’s important is that we are gaining revenue from gas prices above the budgeted prices plus oil revenues. Our main source of income comes from gas sales.
What I have observed the current Minister of Energy did is ensure that there are actually oil and gas to be sold in the future. Prior to this, no one in recent times created an environment to encourage investment. This led to a frightening stage in 2010 and a high level of volatility on our economy’s future.
With the introduction of a suite of fiscal incentives for companies operating in the oil and gas industry, we can now feel a new reassurance that there is a measure of hope.
I like to put a simple analogy to this. If we had 10 cars for sale, and we sold one per year, then after 10 years we would have none to sell if we didn’t replace any. The recent developments in exploration for new reserves may see us having an additional “10 cars” for sale bringing the total to 20. No matter the price, atleast we will have the commodity for sale for a much longer period. This is far better than any energy minister has done for the past two decades.