AVOIDING
‘HOLLOW OUT’ IN THE OIL AND GAS SUPPLY CHAIN
Barry Rust and Peter Bradshaw, Tata Steel, UK, consider the challenges facing the offshore supply chain industry, and the measures it can take, as the global transition to renewable sources of energy continues apace.
T
he offshore oil and gas industry is currently experiencing challenges and changes on two fronts. Firstly, the COVID-19 pandemic, which has forced reductions in global travel and restricted industrial output due to workplace closures, has, until recently, had a significant negative impact on oil prices. However, the short-term effects of the pandemic have merely exacerbated a long-term challenge for the offshore sector, which is the second issue facing the industry – an anticipated decline in demand as consumers look towards more renewable sources of energy and multi-modal transport options.
Driving greater decarbonisation Around the world, more and more countries and companies, led by societal demands for change, are setting goals to reduce carbon emissions. In 2019, the UN announced that over 60 countries, including the UK, had committed to carbon neutrality – or net zero – by 2050. However, a number of others are working towards an earlier deadline (in Scotland the target date is 2045; Microsoft plans to be carbon negative by 2030; and Apple has promised to become fully carbon neutral by the same time). This trend can be seen in the oil and gas industry too, where several major operators – including Equinor, BP, Shell, Total and Eni – have announced their commitment to net zero emissions strategies. Some have also signalled diversification from their core business into renewable energy sources.
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