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How is the oil and gas economy sector recovering from the COVID 19 pandemic?

How is the oil and gas economy sector recovering from the COVID 19 pandemic?

According to GlobalData, the oil and gas industry is currently the poorest performer in the global economy, with sectoral activity remaining below pre-pandemic levels in the first quarter of 2021.

Activity levels in the industry were 5.1 percent lower in the first quarter of 2021 than they were at the end of 2019 before the epidemic ravaged industries throughout the world. This implies that of the 18 sectors examined, the oil and gas industry ranks 18th in terms of its most recent value for Covid 19 activity recovery.

Two industries – travel and tourism and oil and gas – are now experiencing lower-than-pre-pandemic activity levels and have yet to recover to pre-pandemic levels at any time in the last 15 months.

The number of open job advertising in oil and gas is now lower than in most other industries, compared to pre-pandemic standards. By the 15th of March 2021, the most recent date for which data are available, hiring levels were 19.9 percent lower than those reported before the impact of Covid 19. This implies that the oil and gas industry ranks 17th out of 18 industries in terms of hiring recovery.

Here are three methods the industry may use to rebuild better:

1. The ecosystem lens: Cross-industry collaboration to create systemic change.

In this environment, the oil and gas industry has a critical role in the clean energy transition, and it may explore public-private partnerships and cross-sector collaboration. Public-private partnerships to increase the scale and pace of investment in lower-carbon infrastructures, such as carbon capture and storage and hydrogen, and the development of clean industrial clusters in collaboration with hard-to-abate sectors like cement, steel, plastics, chemicals, and heavy transportation, are examples of possible opportunities. These industries currently account for 30% of total emissions, but this may rise to 60% by 2050 as other sectors reduce emissions.

2. The portfolio lens: Take advantage of new value pools that have emerged as a result of the clean energy revolution.

The oil and gas sector has made clean energy investments, including generating assets, electric vehicle charging networks, battery charging technologies, biofuels, and carbon capture and storage technology. Non-core business investments, on the other hand, account for less than 1% of overall capital expenditure in the sector. While the industry's experience might help with the energy transition, oil and gas companies have failed to stand apart and create superior returns. The sector has also struggled to strike a balance between diversity, risk, and shareholder returns.

3. The operations lens: To attain net-zero objectives, collaborative solutions are needed.

While several oil and gas companies have said that they would achieve net-zero emissions by 2050, numerous technological and operational obstacles must be addressed to gradually reduce the carbon intensity of operations (such as methane leaks, flaring, and energy extraction processes). Oil and gas companies may benefit from collaborative innovations and information sharing to effectively manage these difficulties while also increasing cost competitiveness and operational resilience for the whole sector. Digitization and automation technologies like blockchain for supply chain traceability can help firms and regions work more efficiently.