Oil and gas services firms may take aim at energy transition projects to make up for Covid-19 revenue shortfalls, Kallanish Energy learns from Rystad Energy.
The Norwegian consulting firm has found that oil and gas service suppliers can potentially realise as much as 40% of 2019 revenues, totalling approximately $90 billion, by switching service offerings to the renewable energy markets.
According to the analysis, the top 50 global oil and gas services suppliers recorded $220 billion of upstream revenue in 2019. Of this, $100 billion derived from well services and commodities.
In terms of relevance between oil and gas service suppliers and the emerging energy markets, Rystad found that firms that have a more agile service offering will most likely return to 2019 market levels by 2023. These include the subsea cables and pipelines, maintenance, construction and installation segments.
However, well-focused suppliers in particular may struggle to transition to the renewable energy markets, according to Rystad. These firms would be better suited to focusing on providing services related to emissions reductions through digitization, and developing automation and emissions control technologies.
Rystad identified three possible market transition opportunities, the most accessible of which is low carbon segments, where technologies or services for reducing emissions from oil and gas extraction and production can be implemented.
Clean energy infrastructure presents an opportunity for service firms to offer hydrogen infrastructure, carbon capture and storage, or energy storage-related services, especially for equipment manufacturers and engineering firms.
Supplying the end-to-end development and operations of renewable power generation, particularly in wind development projects, would represent another new market opportunity for offshore contractors.
This post appeared first on Kallanish Energy News.