Oil and gas companies must transform in order to remain relevant: Accenture

A lack of confidence in the ability of the oil and gas industry to play a meaningful role in the energy transition could be costly, warns Accenture in their report Oil and gas: Secure trust to secure growth. Large oil and gas companies could lose as much as nine billion US dollars in future revenue unless they are willing and able to embrace sustainable business models.

The energy industry will need nearly US$40 trillion in investment capital by 2040. However, investors are increasingly divesting their assets from fossil fuel companies. In the coal industry, for example, several lenders have stopped issuing funding for new projects and market capitalisation of the top 4 coal producers in the United States has dropped by nearly 90 per cent.

Despite greater investment in the industry today, oil and gas companies cannot rest on their laurels. In order to remain relevant to investors, oil and gas companies need to start taking sustainable and socially responsible measures. Accenture recommends several broad transformations that companies can take, including:

1. Winning over consumers. As some of the most recognised brands in the world, oil and gas companies are uniquely positioned to take a stand on sustainability. Through initiatives like developing new low-carbon, recyclable or renewable services and products, companies can demonstrate the beneficial role the industry will play in the future.
2. Being irresistible. As part of one of the most tech-intensive industries today, energy companies should leverage on their computing power, operational data and commitment to digitisation to attract fresh talent. Younger employees need to be assured that companies in the industry are at the leading edge of technology.
3. Becoming a partner of choice. Oil and gas companies must become allies in the energy transition, by forging partnerships with government agencies, academia and NGOs. Such collaborations can speed up the development of new sustainable energy ecosystems, which can benefit from the unique expertise of oil and gas companies in managing capital-intensive projects.

For more about how oil and gas companies can stay competitive, please read Oil & gas: Secure trust to secure growth.