Oil and Gas sector in UAE holds the biggest share in the economy and without a doubt this sector has been majorly impacted by the global pandemic. The activities in oil and gas sector were somewhat curtailed by the government which has caused severe financial losses to companies working in oil and gas sectors within the country.
Nonetheless, the Commercial Lawyers of Dubai has witnessed several measures taken by the government and thoughts shared by Best lawyers of Dubai for companies in oil and gas industry to face the global pandemic. The current time of uncertainty in the pandemic, the government has restricted some activities such as international borders and suspension of labor visas which has a direct impact on the sector.
Having said that, closure of international borders for export and import has certainly caused trouble for many countries, however, restarting the borders again certainly sounds a good action taken by the government, yet the employees shall follow proper rules and regulations of health and hygiene to prevent the virus to spread further.
In addition, the suspension of labor visa or restrictions of employees stranded in other countries will have an impact as some part of construction or oil and gas industry cannot be done by working from home. Therefore, shortage of employees at work is causing ruckus amongst employers.
In line with the above, it is more likely that oil and gas sector will struggle from the creditors and the investors in this market. Considering the current situation, many investors will rethink before investing in oil and gas or construction sector due to its volatile nature in the present economy and also bearing in mind the recent decrease in the oil prices. In addition, the restrictions in the labor and supply chain industry will certainly increase the delays in meeting the deadlines or finishing up the projects. This is indeed will prevent the investors to invest in this market as it tends to increase the risk in market.
Another significant aspect to be considered is the review of special provisions of the commercial contracts such as force majeure clauses allowing the parties to consider impact of corona virus as an excuse to terminate the contract partially or completely. However, the usage of force majeure clause majorly depends on its draft and the circumstances of each case. Additionally, the law governing the contract will significantly impact the utilization of force majeure clause.
The downfall of oil and gas sector during the COVID-19 situation has caused delay in government agendas and plans which were supposed to be cleared in 2020. The pandemic has caused serious financial losses to uncountable industries and subsequently forced the government to intervene in the commercial market to save such businesses by issuing relevant measures.
It is significant for all companies to regularly review the shift of virus and its impact, more importantly the government measures for proper functioning in the economy or you may approach Best Lawyers in Abu Dhabi to assist you in all commercial matters.