Page 5 - WEMO e-book
P. 5

 Oil & Gas Rethinking the future in the face of uncertainty Volatility has long been an accepted part of operating in the Oil & Gas (O&G) industry. But while prices have varied widely over the past several decades, demand has remained mostly steady— until now. In the current market, there is increasing uncertainty on future demand for oil and gas. In fact, one sustainable scenario provided by the International Energy Agency (IEA) shows that demand could fall by one- third over the next two decades. Our research shows a number of factors driving this forecast— from adoption of electric cars to electrification of the industrial heating sector to increased competition from other forms of energy, most notably renewables. Compounding matters, oil and gas companies face new pressure to reduce emissions from both operations and use of petroleum products, impacting profitability as well as license to operate. As a result, long-term price assumptions are being questioned. Lower demand will likely lead to a dip in prices. Perhaps more concerning, the growing use of renewables and other alternative energy sources will prevent high, sustained peaks in oil and gas prices over time. For O&G companies, the need to transition beyond a traditional business model is both clear and urgent. As cashflow tightens and volatility increases, these organizations will need to develop a long-term strategy to diversify their revenue from traditional production—or face an even more uncertain future.  Infographic Oil & Gas Insights View Now      A closer look: Exploring how rising uncertainties are accelerating strategic divergences in O&G Elfije Lemaitre, Tracey Gilliland, and Patrice Jaulneau, Read the article Energy and geopolitics are strongly intertwined Colette Lewiner Read the editorial   5 

   3   4   5   6   7