More oil and gas companies than ever are taking action to decarbonize, with an anticipated sharp rise to either maintain or increase decarbonization investment from 54% in 2019 to 71% in 2020, according to the DNV GL's new survey published on Tuesday.
The report entitled New Directions, Complex Choices: The Outlook For the Oil and Gas Industry in 2020 is published by Norwegian international consulting firm, and is based on a survey of more than 1,000 senior oil and gas professionals and in-depth interviews with industry executives.
The survey revealed that oil and gas companies intend to increase investment in renewable energy sources from 34% in 2019 to 44% in 2020. Offshore wind leads this effort, with 63% of the sectorial organizations expecting to increase their investments this year by 40% compared to last year.
The survey results showed that oil and gas companies are pursuing multiple routes, including diversifying renewable energy, decarbonizing oil and gas production, and increasing investment in decarbonized gas such as hydrogen produced from electrolysis and renewables, or natural gas combined with carbon capture and storage.
The industry’s aim to increase investment in the hydrogen economy has more than doubled in a year, with 42% of respondents saying that they would boost spending in this area for 2020, up from 20% for 2019, according to the survey.
Additionally, the report noted that capital may not flow as freely into large oil and gas projects in 2020, but companies operating across the industry’s value chain expect to boost investment this year in areas that will allow them to forge a long-term position in the energy transition.
Those reporting that their organizations are actively adapting to a less carbon-intensive energy mix jumped to 60% in 2020 from 44% two years ago, according to the survey.
“Our research shows that the oil and gas industry has placed decarbonization at the center of its agenda, and it will remain a priority despite uncertainty from volatile market conditions and stalling expectations for industry growth in 2020,” DNV GL - Oil & Gas CEO Liv A. Hovem was quoted as saying.
“More and more people in our sector are realizing that we cannot sit and wait for the perfect solution to jump to a completely decarbonized energy system. The industry will emit too much CO2 in the meantime, so we have to start working on decarbonizing the oil and gas sector with the technologies we have already in order to meet national and international climate goals,” she noted.
By Ebru Sengul Cevrioglu