Four trends shaping the future of the Oil and Gas industry: Accenture

It is a challenging time for the Oil and Gas (O&G) industry in view of the economic slowdown due to the ongoing global COVID-19 pandemic. The lack of industrial activities is reducing electricity demand, an area where the O&G industry plays an integral role.

Besides these rapidly evolving market conditions, operators within the sector also find themselves confronted by disruptive trendson multiple fronts, brought on by largescale transformations in the sector.

Accenture’s report, Fueling The Energy Future: Reinventing Oil And Gas For A New Purpose, has uncovered four transformative trends:

1. Decarbonised energy systems. As the cost of renewables continue to fall, O&G companies must take steps to prepare themselves for the impending pivot to cleaner energy sources. This includes accelerating the transition of their systems to greener ones in order to meet investors and consumers’ expectations, as they believe change is not occurring fast enough.
2. Energy Efficiency. This area has been identified as possibly one of the biggest contributors to helping the O&G sector meet the goals of the Paris Agreement by containing emissions and energy demand. However, to maximise the benefits of energy efficiency measures, annual spending in this area would need to rise to around US$1,284 billion between 2025 and 2040.
3. The New Energy Consumer. Energy market transitions combined with digitally enabled lifestyles are driving different consumer behaviours, attitudes and values. In order to thrive under such everchanging conditions, O&G operators must find a way to reposition consumers at the heart of their operations without falling into the trap of becoming a power provider.
4. Post-Digital Reality With increased connectivity brought about by technological advancements, a new digital reality is changing the way stakeholders in the O&G sector operate – necessitating more multi-partner collaboration. Yet, only a third (33%) of O&G companies are using partnerships to support their new business models, which is far fewer than in other industries. O&G businesses must find new ways to leverage the new digital and start-up ecosystems to remain future-ready.

These complex changes are also mandating operators to reimagine their business purpose and reposition themselves to be prepared for these impending changes. In order to remain relevant in this new energy era, Accenture’s report notes that there are two critical outcomesthat O&G businesses can achieve:

• Reassess their role in the value chain and if need be, decide what value can be derived from their core resources to invest in new assets and reach existing untapped value pools.
• Rethink their operating models to decide how to embrace new technologies and workforce strategies to support changing portfolios in the ongoing energy transition.

Read Accenture’s report, Fueling The Energy Future: Reinventing Oil And Gas For A New Purpose to discover what other measures O&G companies can take to ride this next wave of game changing developments.