This decision will allow oil companies to suspend production without fear of canceling land leases.
The Governor Of Oklahoma, J. Kevin Stitt called on President Donald Trump to declare the coronavirus pandemic a natural disaster (“an act of God”) to help oil-producing States cope with the fuel glut that caused oil futures prices to turn negative a few days ago.
“Oil overproduction continues to threaten the economy, “Stitt said in a letter to Trump that the Governor tweeted on Saturday.
The announcement of a “force majeure” or “act of God” will allow oil companies to suspend operations without fear of canceling land leases due to production stoppages, Stitt said.
The Oklahoma energy regulator said Wednesday that producers can close loss-making wells without fear of losing leases. This is the first victory for American oil companies in a difficult situation, which is seeking help from the States after the fall of the markets.