The energy transition: challenges and opportunities for oil and gas companies
As governments and companies alike make further commitments towards Net Zero and the energy transition, the landscape is changing rapidly. Traditional oil and gas companies are finding themselves in a challenging position as they seek to defend the importance of their operations – the world will still rely on fossil fuel for some time to come – while adapting their business models to the new realities of the energy sector. Although some are struggling to find the best way forward, others are investing heavily in innovative approaches that will help them to thrive in the new era.
Oil industry under pressure
Traditional energy businesses are not only under pressure from governments and consumers concerned about climate change but also from their own shareholders, with many large funds threatening to divest if change doesn’t seem to be coming quickly enough. They are also facing reduced profits as oil and gas demand looks likely to decline.
Threats and opportunities
The reality is that the energy transition presents both a threat and an opportunity to traditional oil and gas companies. Those that see the transition as an opportunity are likely to fare better in a post-fossil fuel world. Business history contains many examples of companies that have failed to understand the zeitgeist and move with the times. Only recently Netflix founder Marc Randolph has spoken about how mammoth video store chain Blockbuster laughed him and his co-founder, Reed Hastings, out of the office when they offered to sell Netflix for $50m in 2000. CEO John Antioco thought the dot.com boom was overblown hysteria. In 2024, Netflix is one of the world’s most influential media companies with a market cap of $150bn. Having been a household name with a store on every town high street, Blockbuster stuck its head in the sand and went bust in 2010.
Oil and gas companies have a lot to offer the energy transition process. Their knowledge and expertise in the vast array of disciplines involved in energy extraction are easily transferable to renewable methods. Decades of experience in developing and deploying complex energy infrastructure can be applied to renewable energy projects, helping to accelerate growth and make the new industry more efficient and cost-effective. Many companies are already investing heavily in wind, solar and wave power, building bridges with governments and supply chains while sometimes spinning off their own dedicated renewable businesses.
Innovation has always been highly valued within the oil and gas industry as businesses seek to improve their productivity in the light of oil price fluctuations and ever-increasing regulation. This approach will be equally valued in the renewable energy industry, where it can be used to develop new technologies and business models that can help drive growth.
Highly skilled industry professionals
Professionals working in oil and gas also have much to offer the energy transition. As a heavily regulated industry, oil and gas workers are highly trained, used to working in challenging environments and constantly focused on quality. Their skills will be valued by renewable energy employers.
Innovation at OMS
As a business, innovation is at the heart of everything OMS does, demonstrated by the three prestigious Queen’s Awards for Innovation we have won since 2007. Our dedicated R&D team is constantly working on new ideas or improvements to current technology that will benefit current and new clients. Although our work up until recently has been concentrated within the oil and gas industry we are working increasingly on nuclear and renewable energy projects. We have recently completed work on a major offshore wind installation off the coast of Europe where we inspected welds within J-tubes and used our new SmartGrind system to repair any that were found to be out-of-specification. This allowed our client to streamline their installation process, reduce the requirement for expensive weld cut-outs and save money, while ensuring the quality of their assets.
If you have a challenging project you need help with, our team are always available to discuss. Contact them on info@omsmeasure.com or +44 1279 656038
Success in the new environment
To thrive in a new environment, oil and gas companies must be willing to adapt their business models, invest in new technologies and infrastructure, and embrace the opportunities presented by the growth of renewable energy. The key to success will be to use their existing skills and innovative approach to embrace change as the world moves forward.
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Published: 24.11.2023
[5 minute read]
By Paul Eagle, Sales Director