Oil and gas sector less likely to witness disruption in short term - GulfToday

Oil and gas sector less likely to witness disruption in short term

Abu Dhabi

The oil and gas sector is recovering quickly from the impact of the COVID-19 pandemic, where demand is already growing back.WAM

Although the COVID-19 pandemic is causing disruptions across almost all industries, the oil and gas sector is less likely to witness significant disruption in the short term, according to Dr Angela Wilkinson, Secretary General of the World Energy Council (WEC).

“While the energy transition progresses, we now see that significant disruption in the short term is less likely for the oil and gas sector, where demand is already growing back,” she told Emirates News Agency (WAM) from London by email.

“It is worth remembering, however, that human behaviours change constantly and impact the economy in unforeseeable ways. This is crucial for the Middle East, whose nations have played a pioneering role in the development of the world’s energy infrastructure and will keep being an essential pillar of expertise in the industry for the years to come,” Wilkinson added.

WEC is a leading member-based global energy network of over 3,000 member organisations in around 90 countries.

Wilkinson added that WEC’s latest COVID-19 survey of world energy leaders will be published soon.

US agency expects rising oil demand Meanwhile, a report titled Short-Term Energy Outlook March 2021, published by US Energy Information Administration (EIA), the statistical and analytical agency within the US Department of Energy, said rising Brent prices in February continued to reflect expectations of rising oil demand as both COVID-19 vaccination rates and global economic activity have increased.

The ongoing petroleum supply limitations by the Organisation of the Petroleum Exporting Countries (Opec) and partner countries (Opec+) have supported this trend, EIA added.

The Opec+ extension of existing supply cuts through April added significantly to near-term upward oil price pressures and EIA expects Brent prices will average between $65-$70/ barrel during March and April, more than $10/ barrel above EIA’s expectation last month.

 A preview of the World Energy Council’s COVID-19 survey report accessed by WAM said the pandemic is changing energy landscape with new players coming into the market.

The report was prepared based on 230 responses received during February 2021 from across 6 regions and 57 countries.

The preview report said traditional energy companies would struggle to hold its leading positions, with integrated energy companies gaining momentum (71 per cent).

Digital giants (51 per cent), with their capacity to know and interact directly with individual customers, rapidly expand their capabilities in energy system integration and grid management to capture an increasing share of electrified mobility and other energy-plus services.

Governments will play a leading role in recovering from crisis and progressing successful energy transition; almost a third (30 per cent) of respondents recognise the need of ecosystem approaches and engaging the whole energy system and adjacent sectors, said the preview of the survey report.

The WEC, established in 1923 to discuss the problems facing the global energy industry, has been non-governmental and non-commercial.

Today, it has almost 100 national member committees, with member list including governments, businesses and expert organisations. The World Energy Congress, held over 20 times since the organisation’s founding, is the world’s premier energy gathering.

Energy transition: The global crisis is a wake-up call to the energy sector to get its act together, according to Dr -Ing. Christian Bruch, President and Chief Executive Officer of Siemens Energy.

In conversation with John Defterios, CNN presenter and anchor, at the World Government Summit Dialogues recently, Bruch urged companies and governments to collaborate to urgently adapt learnings from the pandemic to rebuild a more equitable and collaborative energy infrastructure for the next decade.

The inequality we see in parts of the energy industry is a cause for concern, he said. With many states in disarray, and even plunged into darkness following the pandemic, the world has begun to realize that a dependency on fossil fuels to meet the needs of huge populations will spell trouble.

Citing an Organization of the Petroleum Exporting Countries (Opec) report, which states that $12.5 trillion is needed from 2021 to 2045 to get the global energy transition underway and tackle the last billion people without regular energy access, Dr Bruch said the world’s leading industry players are clearly divided on their priorities.

“You see a pretty divided world. On the one side there is sufficient capital in the world and it is a question on how to deploy it. There is a lot of uncertainty - this balance of investing somewhere, giving people access to electricity and energy - how is this working out? One thing is clear, the old mechanisms are not going to work,” he explained.

 

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