Oil and Gas Sector Looks Challenging, Transition To RE Imperative

The annual Petronas Activity Outlook for 2021-2023 painted a somber outlook for the oil and gas sector, the report gave an insight into industry trends, demand outlook and the upcoming activities at the national oil giants Upstream, Gas & New Energy and Downstream businesses.

Despite price for crude stabilising to US$51 per barrel of late, industry outlook for 2021 is anticipated to still remain challenging mostly due to the impact by the unprecedented demand destruction from the COVID-19 pandemic which had resulted in a profound impact both domestically and globally.

PETRONAS maintains a prudent view despite the collapse in oil prices and will continue to accelerate the transition towards a low-carbon economy, spurring policy intervention and global collaborations across industries. Although gas remains a crucial and cleaner source of fuel, diversification into renewable energy is imperative.

President & Group Chief Executive Officer, Tengku Muhammad Taufik said: “Petronas has taken measured steps that demonstrate our stronger commitment to Sustainability as we take cognizance of the acceleration of the global energy transition, heightened by stakeholder expectations and its vast opportunities. Built on desire to drive a fundamental shift in the way energy is produced, we announced our aspiration to achieve Net Zero Carbon Emissions by 2050 as part of our holistic approach to Sustainability that balances Environment, Social and Governance (ESG) considerations across our value chain.”

“The current crisis presents us with the need to remain resilient and agile, taking decisive measures in weathering the market volatility and energy transition added Vice President of Group Procurement, Freida Amat.

According to her, it is imperative for industry players to adapt and embrace the new normal, working with tighter margins require industry players to shift the norms and the need to embrace digitalisation using the technology advancement and forming creative partnership will be key to unlock opportunities.

Petronas foresees a steady outlook for production support, drilling, fabrication and installation of wellhead platforms and subsea facilities as well as decommissioning activities. However, a modest outlook is expected for fabrication and installation of central processing platforms as well as project support vessels.

In the report, it also shares insights that will have a positive impact on the industry, for instance the increase in use of natural gas as a cleaner source of fuel in the energy transition while building capabilities in renewable energy. Digital journey enhanced by collaboration with technology partners to mature digitally-enabled technologies for remote applications in its onshore and offshore operations.

These steps will enable Petronas to mature its technologies to support the sustainability aspirations of achieving net zero carbon emissions by 2050. 

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