OIL services companies can no longer delay making a choice on their future direction according a latest report.
Their options are to stick with their hydrocarbon heritage, becoming ultra-efficient and digitally enabled, or pivot towards low carbon growth opportunities such as offshore wind or carbon capture, using hydrocarbons as the cash generating engine to fund this transition.
This is the findings from professional services giant PwC’s latest report called Time to Choose.
It states that a perfect storm of COVID-19, increasing public scrutiny and the growing momentum of Environmental, Social and Governance (ESG) factors influencing investor and buying decisions, has accelerated the pace and impact of energy transition in many regions.
According to the report’s respondents, many oil services companies already recognise the need to transform in order to better align with their customers, with some helping to set the pace of decarbonisation alongside major players.
Noticeably, since the end of 2019, a number of oil and gas operators have announced their net zero ambitions with this momentum expected to grow throughout 2021.
Low carbon credentials could also become an area of significant competitive advantage.
The report highlights how oil services companies can increasingly showcase their decarbonisation credentials as a means of securing tenders.
Drew Stevenson, PwC’s Energy, Utilities and Resources leader, commented: “With a low carbon future rapidly taking shape, an increasing number of oil services companies are looking towards new energy and assessing whether there is an opportunity to diversify, if they have a right to win in that space or whether they need to double down on oil and gas and become ever more efficient.
“Oil services companies will need to reduce their carbon footprint, irrespective of the strategic pathway they choose – and this decision can no longer be kicked further and further down the road.
“We believe the oil services sector has a significant contribution to make in the UK’s energy transition journey.”