The drive towards a low-carbon future is leading many in the oil and gas industry to fundamentally reimagine what the energy company of the future looks like, according to a new paper from Deloitte.
The paper, Hydrocarbons to electrons – Crossing the chasm to the new energy future, examines how oil and gas companies are questioning what the energy transition will mean to their business, operations, customers, communities and their overall place in the global economy.
A Deloitte survey of 74 oil and gas executives has revealed an overwhelming positive view of renewables (68 per cent), while a further 27 per cent see the new energy era as a real business opportunity.
The energy transition is profoundly challenging the sustainability and resilience of traditional business models, according to Deloitte Australia oil and gas leader Bernadette Cullinane, who discussed the topic at APPEA 2018 this week alongside study co-author Michael Wood, a director in Deloitte’s Risk Advisory practice.
“As the energy sector faces this major transition to new energy, there is uncertainty over the trajectory and pace at which it will unfold,” Ms Cullinane said.
“Our survey results show more than 50 per cent of respondents expect renewables will be a significant source of energy in Australia by 2025, rising to nearly 90 per cent by 2030.
“To prepare for and embrace the new energy future, companies will need to reshape their business models and reassess the oil and gas competencies required to ensure success in future decades.”
Sixty-nine per cent of survey respondents said they were in the process of preparing for, or are already prepared for, renewables and are doing so through a number of avenues, including establishing new business models, upskilling workforces and creating new operating units.
While many oil and gas companies are already adjusting and preparing for the energy transition, Ms Cullinane said it was imperative leaders develop plans and strategies in the event changes take place more rapidly than expected.
“The smart oil and gas company of the future will leverage its core competencies, including financing, technical and engineering strength and the ability to manage larger scale and more technically complex projects, while incorporating new capabilities such as greater agility and stronger business to consumer engagement to cross the chasm from one form of energy to another,” Ms Cullinane said.