New research by DNV GL, technical advisor to the oil and gas industry, shows oil and gas companies seeking to rebalance business portfolios and reorganising for a new era
Short-term agility, long-term resilience, DNV GL’s seventh annual benchmark study on the outlook for the oil and gas industry, surveys senior oil and gas professionals worldwide.
In a period of drawn-out recovery, 49 per cent of senior oil and gas professionals surveyed expect their businesses to diversify into, or invest more in, opportunities outside of oil and gas. Still, almost eight out of ten see long-term opportunities for gas. 26 per cent of industry leaders expect their business to invest in renewable energy in 2017, with a majority seeing investments in renewables as a shift in long-term business strategy.
“The number of companies we now see pursuing opportunities beyond oil and gas signals a step change in the reshaping of the sector and demonstrates its ability to adapt and build a more robust, diverse and sustainable energy future,” says Elisabeth Tørstad, CEO, DNV GL – Oil & Gas.
Oil and gas professionals expect investments to continue across the value chain in 2017, though at a lower level than last year, as the percentage of respondents expecting to maintain or increase CAPEX has dropped from 43 per cent to 39 per cent.
A third of respondents say their organisations will be increasing M&A activity in the next 12 months, while more than three-quarters of respondents expect increased industry consolidation.
85 per cent see cost management as a top or high priority for 2017, and a majority see their current cost-efficiency measures as marking a permanent shift towards a leaner way of working. Organisational restructuring, reducing operating expenditure and improving efficiency from existing assets are the top three priorities for cost control.
Two-thirds say that the cost pressures are driving more industry collaboration, and 66 per cent of respondents say their organisation will seek greater standardisation of tools and processes, up from 59 per cent last year.
Digitalisation is also increasingly seen as a means to enhance operational and cost efficiencies.