DNV GL published a new research revealing that the oil and gas industry expects to boost investment in the energy systems of the future this year, as companies seek to transform for the long term.
#1 A record two-thirds (66%) of senior oil and gas professionals report that their organization is actively adapting to a less carbon-intensive energy mix in 2021, up from just 44% in 2018. #2 Some 57% plan to increase investment in renewables, compared to 44% last year. Almost half (48%) expect to increase investment in green or decarbonized gas. Only a fifth (21%) expect to increase investment in oil projects in 2021. #3 Eight-in-ten (78%) believe there will be increased industry consolidation in the year ahead, with 63% expecting more demergers, divestments and spin-offs. #4 Transformational investments are expected this year despite a crash in industry confidence. Only 39% are confident for industry growth in 2021, down from 66% last year and 76% in 2019. Αccordingly, a record two-thirds (66%) of senior oil and gas professionals report that their organization is actively adapting to a less carbon-intensive energy mix in 2021, up from just 44% in 2018. Some 57% plan to increase investment in renewables, up from 44% last year, half (48%) expect to increase investment in green or decarbonized gas. Just a fifth (21%) say they will increase investment in oil projects in 2021, as the sector increasingly comes to terms with the notion that the world’s demand for oil has peaked or will peak in the short to medium term. Expectations for an increase in natural gas investment remain steady at 37%. Moreover, the majority of senior oil and gas professionals expect that these changes will lead to a bigger reshaping of the industry. Specifically, eight-in-ten (78%) believe there will be increased consolidation in the year ahead, up from 64% one year ago. Strategic reorientation may also involve asset and business sales, with 63% expecting more demergers, divestments and spin-offs, up from 46% last year. Overall, transformational investments will come despite a crash in confidence for industry growth following the Covid-19 pandemic and subsequent oil and gas market crash. Only 39% of senior oil and gas professionals are confident about industry growth in 2021, down from 66% last year. Hans Kristian Danielsen, Vice President, DNV GL, commented that The trouble with the industry’s available cost efficiency levers is that most of them have been pulled quite hard already. Cost efficiency has been an uninterrupted priority in each of the past seven years. For some, it is getting harder to squeeze any more water from the sponge. Concluding, learn more about the report by clicking here.