2022 oil and gas outlook
Quick adaption to market fundamentals has been identified as the key to the success of oil and gas companies into the future.
Covid-19 has caused the sector to suffer as economic activity slowed and the overall demand for petrol and petroleum products significantly decreased.
Greater energy penetration prospects were renewed when Dow Jones US Oil and Gas Index rose 46 per cent in 2021.
The global acceleration for energy transitions has increases, leaving numerous questions around the role of both oil and gas will play as governments globally attempt to move towards net zero emissions.
Australia is one of the main producers and exporters of both natural gas and coal, leading to major implications on the economy and way of living with the commitment to net zero emissions.
While shareholders and policymakers continue to place pressure on companies to transition, the price of technologies such as carbon capture and storage remains very expensive to deploy on large scale.
The investment in tree plantations to offset footprints or purchasing carbon credits on the market have been employed by companies such as Woodside, Shell, bp and BHP.
Recent research from firm Bernstein Research claims it still sees an apparent intrinsic value in the oil and gas sector, even though it is growing to become a “sunset industry”.
The Australian Petroleum Production and Exploration Association has the view that the solution to reducing emissions is the introduction of new technologies and natural gas.
According to Professor Claus Otto, the director of the Curtin University Oil and Gas Innovation Centre, natural gas can be compatible with a low carbon future as it replaces dirtier coal in electricity generation.
Natural gas is the cleanest of the fossil fuels and is seen as the logical backup for the current intermittency. Oil and gas will remain necessary resources for the immediate future ad the transition in the short term is difficult.