New research published by DNV GL has shown that this year’s optimism for growth in the oil and gas sector has weakened
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. It also provides regional insights with survey data from 83 senior oil and gas professionals based in the Middle East and North Africa (MENA).
While 71 per cent of senior oil and gas professionals are confident of MENA’s industrial growth in 2020, this is down 12 percentage points from 83 per cent in 2019. More than half (54 per cent) of MENA respondents think that if the oil price averaged less than US$50 per barrel in 2020, many organisation will still make acceptable profits.
The survey found that investment expectations for renewable energy projects in MENA doubled, while decarbonisation spending increased by 10 points. Those who report that their organisation is actively adapting to a less carbon-intensive energy mix fell to 55 per cent in 2020 from 57 per cent a year ago.
Oil and gas companies plan to increase their investment in cybersecurity in MENA from 38 per cent in 2019 to 63 per cent in 2020. Offshore wind is also leading this effort, with 54 per cent of organisations expecting to increase their investment, up from 22 per cent last year.
Cost efficiency will be the top priority in the region for oil and gas professionals’ organisations (40 per cent), up from 26 per cent a year ago. Half of the respondents (54 per cent) expect their organisation to increase or maintain spending on digitalisation in 2020.
Liv A. Hovem, CEO, DNV GL - Oil & Gas, said, “While the industry is experiencing persistent uncertainty, growing complexity, and new risks, we also see industry taking bold decisions, building greater efficiencies and rising to long-term challenges as the world pivots towards a lower-carbon energy future.
“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.”