Oil and gas companies need to look beyond short-term issues such as tumbling oil prices and prepare for even greater uncertainty in the future, a new PwC report says.
The professional services firm adds the momentum to replace fossil fuels with cleaner energy sources is gathering pace.
PwC’s New Energy Futures report sets out a “framework” to help companies successfully navigate an increasingly complex and volatile global market over the next five to 15 years.
It also highlights four potential futures for the oil and gas industry, ranging from one of limited government intervention and ongoing price volatility to tighter regulation, supply constraints and significant private investment in low-carbon technologies.
Jan-Willem Velthuijsen, chief economist, PwC in Europe, says: “The oil and gas industry is facing a complex and difficult environment. The future will likely bring even greater uncertainty.”
But the industry has overcome major challenges before and can do so again, the report says, adding: “The oil and gas sector is no stranger to recurring upheaval, volatility and shifting geopolitical landscapes.
“Successful players have proven an ability to take a long-term view and manage through such challenges by innovating and adapting.”
Viren Doshi, strategy and oil and gas leader, PwC, adds: “While, for understandable reasons the current depressed oil price dominates the headlines, it’s also important to look beyond that to consider what forces are shaping the future of the industry.
“Global demand for affordable, reliable energy will continue to grow for the foreseeable future, but there is a new longer-term backdrop as the world transitions to a low-carbon system.
“Momentum to replace fossil fuels with cleaner energy sources is building, and oil and gas companies need to consider their futures in this context.”
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