Prospects for renewable energy diversification are providing reasons to be cheerful for senior oil and gas leaders, amid waning overall confidence about the industry.

That’s according to a new survey of professionals in the sector, revealing overall confidence levels for growth in the year ahead are lower than at this point in 2018 – down from 76% to 66%.

The poll, conducted by Norwegian consultancy DNV GL, shows less than half (46%) of oil and gas decision-makers expect upcoming large capital-intensive projects to be approved, compared to 67% in the previous year.

However, the proportion of people expecting greater investment in decarbonisation projects grew from 54% to 71% over the same period.

DNV GL oil and gas CEO Liv Hovem said: “While the industry is experiencing persistent uncertainty, growing complexity and new risks, we also see an industry taking bold decisions, building greater efficiencies and rising to long-term challenges as the world pivots towards a lower-carbon energy future.

“Our research shows that the oil and gas industry has placed decarbonisation at the centre of its agenda, and it will remain a priority despite uncertainty from volatile market conditions and stalling expectations for industry growth in 2020.”


Offshore wind and hydrogen proving popular routes to energy diversification

The traditional focus of these extractive firms has been increasingly thrust under the spotlight as the global climate debate grows more vociferous, causing uncertainty within the industry about the sustainability of long-term fossil-fuel projects.

Many firms are facing pressure from investors to reduce their carbon-intensive activities, as are the banking institutions that provide financial services and support.

But amid this process of energy transition, those oil and gas firms hatching plans to diversify their portfolios to include more low-carbon, renewable projects are hopeful of positive returns.

Hovem added: “More and more people in our sector are realising that we cannot sit and wait for the perfect solution to jump to a completely decarbonised energy system.

“The industry will emit too much carbon dioxide in the meantime, so we have to start working on decarbonising the oil and gas sector with the technologies we have already in order to meet national and international climate goals.”

The DNV GL report notes that oil and gas firms are pursuing multiple routes to diversification, with offshore wind and hydrogen proving key strategies.

The number of organisations planning to increase investments in offshore wind grew from 40% to 63% a year earlier, while those eyeing investments in the hydrogen economy more than doubling over the period from 20% to 42%.