Published on 01-Jul-2024

DNV Survey Reveals Optimism and Challenges in Oil and Gas Sector

DNV Survey Reveals Optimism and Challenges in Oil and Gas Sector

Sources - @arrowwingsacademy

What role will Nondestructive Testing (NDT) play in the evolving oil and gas landscape? Despite unprecedented energy challenges, 68% of oil and gas industry leaders express optimism for sector growth in the coming year. This confidence, revealed in a DNV survey, underscores the sector's resilience as it balances immediate demands with long-term environmental responsibilities.

The survey, titled “The Paradox of Petroleum - How the Oil and Gas Sector is Transforming Through Uncertainty,” gathered insights from nearly 450 senior professionals. It highlights the sector's recovery following the 2020 downturn and its heavy investment in alternative energy sources such as wind, solar, hydrogen, carbon capture, utilization and storage (CCUS), and biofuels. These investments are creating new revenue streams despite challenges like higher interest rates and supply chain disruptions. The sector's positive outlook is also driven by a renewed focus on energy security, partly due to geopolitical events like the conflict in Ukraine.

However, significant concerns remain. Fifty-one per cent of executives believe global investment in new oil and gas capacity is insufficient, with 70% of North American executives particularly concerned compared to 40% in Europe. Operational performance is a priority, with 62% of organizations planning to increase investments in energy efficiency, and 78% aiming to standardize tools and processes to cut costs. Furthermore, 82% of respondents recognize the need for new operating models to achieve these efficiencies. Profitability continues to be a challenge due to the high-risk nature of oil and gas investments. Companies like Equinor are adjusting capital strategies to balance profitability with strategic goals, especially in renewable energy sectors.

The survey also identified barriers to prioritizing renewable and cleaner energy sources. The leading challenge, cited by 49% of respondents, is the low financial return or profitability of these initiatives. Additionally, 33% point to constraints from existing business models and unclear energy or emissions policies. Required capital investment is a significant obstacle for 30%, while 26% highlight limitations in organizational capabilities, infrastructure, and technology. Operational costs are a concern for 21%, followed by organizational culture (19%) and the difficulty in scaling up or growing revenue (18%).

Attracting young, skilled workers is critical, with 66% of executives prioritizing it to support expansion, decarbonization, and modernization efforts. Innovative workforce development strategies, such as technology-driven training and leveraging global talent pools, are essential to attract and retain talent. The sector is also committed to reducing environmental impact, with 61% of executives planning increased investment in decarbonization. Balancing these efforts with ongoing oil and gas needs is crucial to effectively support the energy transition.

This evolving landscape raises pertinent questions for the Nondestructive Testing (NDT) industry. As the oil and gas sector invests in new technologies and infrastructure, the demand for advanced NDT methods will likely increase to ensure the safety, reliability, and integrity of both traditional and renewable energy systems. The industry's transition underscores the critical role of NDT in facilitating safe and efficient operations, highlighting the need for continuous innovation and adaptation within the NDT sector to meet these emerging challenges.

Ditlev Engel, CEO of Energy Systems at DNV, remarked, "The oil and gas sector is at a critical juncture. Their dual task to invest in low-carbon and renewable energy sources to meet climate targets while maintaining global demand and operational efficiency is complex. Our survey shows that industry leaders are confident about their role in the energy transition and are actively seeking solutions to navigate this transformation. More profitable business models and clear policies are needed to accelerate change. At DNV, we will continue to support the oil and gas sector in decarbonizing while keeping current operations safe, sustainable, and efficient."

https://www.worldpipelines.com/business-news/25062024/new-dnv-survey-highlights-oil-and-gas-sector-paradox/

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