That’s according to newly published research by DNV GL. New Directions, Complex Choices: The outlook for the oil and gas industry in 2020, is based on a survey of more than 1,000 senior oil and gas professionals and in-depth interviews with industry executives.
The research suggests that significantly, more companies are pursuing multiple routes, including diversifying into renewable energy, decarbonising oil and gas production, and increasing investment in decarbonised gas such as hydrogen.
“While the industry is experiencing persistent uncertainty, growing complexity, and new risks, we also see an industry taking bold decisions, building greater efficiencies and rising to long-term challenges as the world pivots towards a lower carbon energy future,” said Liv Hovem, CEO of DNV GL – Oil & Gas.
“Our research shows that the oil and gas industry has placed decarbonisation at the centre of its agenda, and it will remain a priority despite uncertainty from volatile market conditions and stalling expectations for industry growth in 2020.”
Oil and gas companies’ plan to increase investment in renewable energy sources is up from 34% in 2019 to 44% in 2020, according to the research. Offshore wind leads this effort with 63% of organisations expecting to increase their investment, up from 40% last year.
The industry’s intention to increase investment in the hydrogen economy has more than doubled in a year. 42% of respondents said they would boost spending in this area for 2020, up from 20% for 2019.
“More and more people in our sector are realising that we cannot sit and wait for the perfect solution to jump to a completely decarbonised energy system. The industry will emit too much CO2 in the meantime, so we have to start on decarbonising the oil and gas sector with the technologies we have already in order to meet national and international climate goals.”
Cost efficiency will be the top priority for nearly one third of senior oil and gas professionals’ organisations (32%), up from 21% a year ago. Eight out of ten (81%) respondents believe the industry needs to develop new operating models to achieve further cost efficiencies, recognising the fact that much of the more obvious cost-cutting has already taken place following the 2014 oil price crash.
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