Diversification and Agility Key to Ensuring Sustainability in the O&G Services Segment
September 16th, 2020
In the O&G services segment, momentum is building towards supporting low-carbon energy projects. Technology advancements in energy generation, storage, and distribution, and growing awareness of climate change is compelling engineering and consultancy firms to diversify their offerings by including a larger proportion of renewable energy contracts. In 2019, revenues of the 50 largest global oilfield services firms were estimated at US $220 bn, of which US$55 bn was dedicated to engineering, procurement, construction, and installation services. This means that oilfield services firms are in a good position to repurpose their expertise in energy transition projects where ROI are favorable compared to traditional well services, drilling tools, fracking, and related O&G segments.
One market where services firms and equipment manufacturers see opportunity is providing development and operational support to the emerging blue hydrogen market. While solar power plants, wind farms, and geothermal energy offer compelling opportunities, only the most agile firms will be able to navigate the fluid regulatory environments and competitive landscapes of the emerging renewable energy markets.