2024 energy plays in review: Uptick in renewables and clean tech, but oil & gas still hold energy security keys

As another turbulent year for the energy markets, 2024 witnessed a further escalation in geopolitical tensions and conflicts, leading to a mixed bag of achievements, missed opportunities, and rough energy seas not only for the goal of tripling clean sources of supply but also for dominant fossil fuels, which showed their resilience in the face of multiple legal challenges aiming to shut oil, gas, and liquified natural gas (LNG) down. Each side got to experience the taste of victories and defeats over the year, but the lion’s share of players in both offshore energy clubs kept moving forward despite setbacks that got in their way.

Key takeaways:

• Riding the energy security wave in polarized world
• LNG moves on US energy chessboard
• Energy transition hits a snag but goes on albeit at slower pace
• UK’s oil & gas state of play in the spotlight
• Canada tightens the noose around greenwashing
• Africa’s oil & gas on digitalization quest
• Energy market’s pivot to Asia
• Out with Saudi Arabia’s jack-up market boom, in with rig suspensions
• Crackdown on methane menace
• Geopolitics and energy: Hormuz blockade, Ukraine and Gaza crises
• Energy transition’s net zero journey in need of tune-up
• COP29’s carbon markets and game of trillions
• Climate change framework may be on the cards
• Are energy players getting a bang for their buck?
• Stripping away emissions with greener energy moves

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During 2024, energy security still dominated the power sector’s discourse in many regions across the globe, managing to take the front-row seat in political duels and standoffs in nearly all elections that were held over the past 12 months. While the results of these elections brought drastic shifts in some regions, with the far-right political spectrum managing to make significant inroads, the left secured wins too, and the overall status quo was also maintained in many places, and the left secured wins too.

Oil, gas, and LNG persevered by powering through the obstacles placed in their path, reigniting the flame of market consolidation across all areas of business. Given the complexities evident within the global political state of affairs, energy security has become somewhat controversial, representing a double-edged sword, depending on the intentions of those wielding it.

On one hand, this topic is pushing energy diversification and driving the ramp-up in greener sources of supply, spearheading the shift away from fossil fuels. On the other hand, it is also propelling such projects forward, especially those in the oil, gas, and LNG arenas, by stripping bare the need for more sources of supply to meet the rising energy needs, exacerbated by population growth.

Since these sources of supply, particularly gas and LNG, are seen as less carbon intensive than coal, coal-to-gas switching is perceived by many around the world as a good way to curtail coal use and lower the greenhouse gas (GHG) emissions footprint. The prolonged use of any fossil fuels has strengthened the impasse among those wanting to burn oil, gas, and LNG longer and those who want to speed up the pivot to renewable and clean energy alternatives.

As the gap between those opposed to handing a lifeline to the fossil fuels industry and those calling for more of these and all energy sources widened, 2024 had something in store for all energy types. The current energy ecosystem is a complex puzzle of multiple pieces that enable all offshore energy sources to operate as powerfully and effectively as possible in the current circumstances. All sources of supply had run into certain obstacles in 2024 depending on the geographical region and would benefit from some changes in policy, among other things.

There is no doubt that the energy trilemma continued to run in the background in 2024 while the global players tried to strike a balance between energy security, affordability, and sustainability to shore up diverse energy supplies and push decarbonization to new levels. Against such a backdrop, hydrocarbon exploration went unabated, as oil and gas companies continued their planned drilling campaigns. However, some regions experienced more policy shifts and uncertainty than others.

One of the energy playgrounds where investors experienced a prolonged drop in confidence is the North Sea due to the political upheaval in the United Kingdom (UK), exacerbated by the Energy Profits Levy (EPL), which culminated in an increase and extension of the windfall tax on oil and gas producers’ profits, raising it to 78% and extending the levy to March 31, 2030.

Given the already high windfall tax, analysts warn that this move could stifle the industry further and lead to its downfall, as energy players turn to other offshore oil and gas regions, leaving behind their UK North Sea assets to pursue other hydrocarbon opportunities in more economically attractive environments. The UK’s oil and gas industry is seen as a meal ticket for the energy transition journey, thus, the government increased the windfall tax to bankroll its ambition to turn Britain into a renewable energy superpower.

The United Kingdom will kick off consultations to devise new environmental guidance for offshore oil and natural gas projects following a recent Supreme Court ruling, which included consideration of greenhouse gas emissions from the combustion of oil and gas into environmental impact assessments for hydrocarbon extraction projects for the first time in Britain’s history.

Meanwhile, the government has confirmed plans to further increase and extend the energy profits levy on oil and gas production to a headline rate of 78%, despite warnings that such a move could threaten energy investments, putting at risk not only energy security but also the energy transition to a more sustainable future, since the net zero shift is estimated to come with a price tag of over $1.29 trillion.

Some, like Greenpeace UK, see the changes in the fiscal rules as a way to open doors for long-needed investment, arguing that “funds for home insulation, public transport, and green jobs would boost the economy and help to tackle the climate and cost of living crises at the same time.”

Others, such as Terry Allan, CEO of nexos, warn of the pitfalls that come with the rise in energy profits levy to 38%, as underlined by Allan, who emphasized: “The government’s approach risks a double fault on our energy future, undercutting the very security and job protection it aims to support. Oil and gas, alongside emerging renewables […] form an essential partnership in our energy transition, not competitors.”

Andy Wood, CEO of Primeval Energy, went even further in his criticism of the UK government’s most recent move, labeling it “the assassination of North Sea oil,” which has been “taxed out of existence.”

While supporting Wood’s view, John Butler CEng FIMarEST, Global Maritime’s Global Lead – Energy Transition, urged mindfulness of “unintended consequences,” that would arise out of “strangling” Britain’s oil and gas sector as such a move would have the same effect on the UK’s supply chain which provides “the innovation, technology and most importantly the people to delivery offshore renewable energy projects.”

Seeing how the UK and Europe are pulling out all the stops to slash GHG emissions and usher in a more sustainable future, Offshore Energy decided to look more closely into one of the dominant decarbonization bets across the old continent.

Diving into the intricacies of tailwinds and headwinds of carbon capture, utilization, and storage, James McAreavey, Head of CCUS at Scotland-headquartered Xodus, provided further insight into this prominent decarbonization tool in Europe and the UK.

Another region that was in focus during the year was the United States of America (U.S.A.), which garnered global attention after the Biden administration decided to usher in a U.S. LNG permitting freeze. The dust over this decision has not settled yet, as reactions not only represent a straightforward choice between positive and negative views but are also made up of all shades in between.

The past year thrusts new drilling assignments into the limelight alongside the latest project undertakings, but the imposed pause on pending approvals of U.S. LNG exports to non-free trade agreement (FTA) countries is considered one of the most controversial moves, which brought the strife between Big Oil and climate campaigners to the fore. Three LNG export projects were expected to increase the natural gas trade once they come online by the end of 2025, according to the U.S. Energy Information Administration (EIA).

While some saw the decision as a step forward in climate change mitigation efforts, others were quick to pinpoint its alleged ability to hinder the development of U.S. LNG infrastructure, endangering not just energy security in the long run but also the efforts being made to transition away from coal and switch to lower carbon sources. Many, including the American Petroleum Institute (API), believe that U.S. LNG could accelerate global emission reductions by displacing higher-emitting fuels.

Due to this, the Natural Allies Leadership Council is among those that have urged President Biden to reject efforts to “reduce, delay or otherwise pause the export of American natural gas,” seen as one of the nation’s greatest and most valuable assets,” that can help pave the way for “lower global emissions and enhanced global security.”

Among those who strongly criticized the Biden administration’s pause of LNG export approvals is the National Hispanic Energy Council (NHEC), which claimed that the move was sending market signals that could slow natural gas production and lead to American LNG customers opting for less cleanly produced fuels to meet growing energy demand.

The LNG permit pause came after the Biden administration took credit for record LNG exports, which were instrumental in helping U.S. allies, primarily in Europe, stave off power outages when the Ukraine crisis started in 2022 and Russia cut off gas supplies to European nations.

On the other hand, environmental and climate groups, such as Sierra Club, hailed the LNG permit pause as a “bold” and “historic” step to phase out fossil fuels. This pause affects the controversial Calcasieu Pass 2 (CP2) project as well, which climate activists have been trying to stop from being built on the Gulf Coast of Louisiana.

Offshore Energy conducted an exclusive interview with two Bureau Veritas Group representatives, about the current and future energy landscape, trends, hopes, challenges, and predictions for the offshore energy industry both in the U.S. and throughout the world in the wake of the LNG permitting freeze, which was made to review the environmental and economic impacts of LNG export facilities to non-FTA countries.

At the time, Rajiv Sabharwal, Bureau Veritas’ Vice President of Business Development – Energy, highlighted that the LNG permitting pause could have “a positive impact” on the renewable energy ramp-up, spotlighting solar, wind, and hydrogen as likely candidates that might take advantage of the situation

He also noted that the extent to which these greener energy options could reap the benefits from the LNG permitting saga would be driven by the duration and outcome of the freeze, with the regional and global energy dynamics contributing to the mix as well.

While anticipating further ups and downs, Hiram K. Mechling III, P.E., PMP, Vice President of Offshore Wind at Bureau Veritas North America, pointed out the considerable amount of investment in the offshore wind industry not only from U.S. finance institutions but also oil giants, such as BP, Shell, and TotalEnergies, concluding that the sector had come to “a tipping point.”

The fight over the future of the LNG industry went on with another lawsuit aside from the one disclosed by API. The new one was brought by Pelican Institute for Public Policy and Liberty Justice Center, representing Oil & Gas Workers Association, to challenge the Biden administration’s pause on pending approvals of liquefied natural gas exports to non-free trade agreement countries.

The 16 states that joined hands in a court battle claimed that the so-called ban was detrimental to their economies, jobs, and energy security, even though the pause was only impacting LNG projects that had not been approved and had nothing to do with the ones that were already up and running.

While the court’s preliminary injunction, since the judge sided with the countries that sued the Biden administration, restored the status quo, requiring the resumption of pending LNG applications evaluation on a case-by-case basis, it does not order the Department of Energy to issue any specific decisions or stop the DOE from being able to rigorously update studies that evaluate the economic and environmental effects of LNG exports to inform its public interest determination.

Unlike the current U.S. administration, which will be replaced by a new one later this month, Russia has no calms about expanding its gas and LNG footprint, as hammered home by its energy giant Gazprom and its projected investment program and budget for 2025, set at RUB 1.52 trillion (almost $15.22 billion.

Gazprom’s board of directors underlined that the main outcome of 2024 was a continuing growth in demand for conventional energy sources against the background of the unstable geopolitical situation and an increased attention to the matters of energy security, emphasizing the surge in oil, gas, and coal consumption, with the first preliminary estimates indicating that global gas consumption went up by over 100 billion cubic meters last year, mostly driven by Russia, China, and India.

While deeming LNG “anything but natural” in its report, Sacramento-based Earth Insight dived into examples spanning multiple geographies to emphasize the $1 trillion proposed global LNG infrastructure expansion would hamper the net zero journey. According to the American Bureau of Shipping (ABS), LNG is still a cost-effective option, as illustrated by the establishment of LNG bunkering facilities, which continue to pop up at ports around the globe.

The prevailing oil and gas market trends seem to indicate that energy security is still in the driving seat in most regions of the world. With headwinds buffeting the global energy transition movement, some are concerned about the decarbonization ship’s ability to reach its net zero destination on time to meet the Paris Agreement deadline. This puts more pressure on the oil and gas industry to rise to the challenge and deliver on its low-carbon and low-emission pledges.

Many energy experts and players, including Equinor, believe that last year’s elections have the potential to change the pace of the energy transition and affect the future developments of the global energy markets. As time flies by, the Norwegian giant is adamant that the world needs to step up on the gas to propel decarbonization forward and meet the Paris Agreement targets.

With the rise in net zero moves, subsea cables’ role is getting even more prominent in oil and gas electrification, decarbonization, offshore wind, other renewable energy areas, and even carbon capture and storage (CCS). Offshore Energy’s interview with JDR Cable Systems hammers home the belief that subsea cables will continue to be an essential piece of the energy transition puzzle.

The UK, which wants to become a clean energy superpower by 2030 under the new government, made headlines multiple times last year due to its energy policy changes. Labour’s decision to extend the windfall tax on UK oil and gas producers was not well received by the industry at first, as the data from the Offshore Energies UK (OEUK) showed that it could put 42,000 jobs and £26 billion of economic value in jeopardy.

This is not the first time that Labour’s proposals have come under heavy fire from Britain’s oil and gas industry, as the party faced a barrage of criticism in 2023 over its plans to ban all new oil and gas developments in the North Sea. While the political party appeared to change and soften its tune somewhat during its election campaign, the windfall tax hike and extension were implemented, once it won the elections.

Labour’s U-turn on its green pledge, by deciding to scrap its policy of spending £28 billion a year on green investments, was described as a letdown in the fight against the climate crisis by Global Witness, an international non-government organization (NGO).

To find out more about the future of the North Sea mobile offshore drilling unit (MODU) market, Offshore Energy had an interview with Todd Jensen, Senior Offshore Energy Market Analyst at Maritime Strategies International (MSI), who told us that emission reduction quests would continue to be part of the long-term energy transition agenda. However, he did not expect to see a wave of rig upgrades to slash the carbon footprint in the short term because of the market fundamentals that were in place.

Despite the energy transition gains, the current progress is not up to par to reach the UK’s decarbonization targets. Therefore, DNV’s report warned that Britain was at risk of missing its Nationally Determined Contribution (NDC) commitment and legally binding mid-century net-zero targets. As a result, the government was advised to boost policy support for a low-carbon and clean energy future.

Sunda Energy claimed that wind construction activities interfered with the completion of a license requirement, forcing it to relinquish an offshore license in UK waters. The country’s offshore energy industry facing increasing co-location conflicts between oil and gas, offshore wind farms, and carbon capture and storage projects.

This is driven by Britain’s ramp-up of activity to shore up different energy supplies to strengthen its energy security while also seeking to develop low-carbon and green sources of supply to meet its energy transition aspirations.

New European Offshore (NEO Energy) intends to start cutting down on investments across its portfolio against the backdrop of regulatory and fiscal woes in the UK, thus, the current schedule for bringing its oil redevelopment project in the North Sea on stream will likely be pushed back.

However, the exact effects and impact on the first oil timeline will only be known once the government publishes its updated environmental guidance for oil and gas projects and the firm completes reviews to check what needs to be adjusted to comply with the changes.

The United Kingdom will kick off consultations to devise new environmental guidance for offshore oil and natural gas projects following a recent Supreme Court ruling, which included consideration of greenhouse gas emissions from the combustion of oil and gas into environmental impact assessments for hydrocarbon extraction projects for the first time in Britain’s history.

With energy transition and environmental concerns at the forefront, Canada took control of all 227 offshore oil and gas exploration and production permits off its Pacific coast, ending further hydrocarbon extraction activities in the area. Is there a place for fossil fuels during the energy transition journey, which Canada recently boosted with the Cleantech investment tax credit (ITC) tools to spur greater investments in wind energy, solar power, and energy storage industries?

The country still intends to pursue CCUS and CCS, but it is unclear what kind of impact the strengthening of greenwashing laws will have on these low-carbon pursuits. Where does oil and gas stand in this new energy world order? Navigating the fast-evolving energy landscape interspersed with sustainability and climate-related reporting pitfalls will be a tall order and a nearly Sisyphean task for Canadian producers and developers unless clear guidelines and regulations are in place.

Once ambiguity has been removed, Canada’s businesses will be able to speed up their sustainability journey to hit climate and decarbonization milestones in time to reach net zero aspirations. In the meantime, companies need to tackle greenwashing and greenhushing risks to set the ball rolling on the build-out of green trust and avoid litigation and scenarios that would lead to monetary penalties of up to $10 million and even $15 million for subsequent orders, or three times the benefit derived from the misrepresentation, failing that these fines can go up to 3% of the corporation’s annual global gross revenues.

Canada’s proposed onshore and offshore oil, gas, and LNG greenhouse gas pollution cap is forecasted to prompt the oil and gas sector to invest in technically achievable decarbonization to achieve significant emission reductions by 2030-2032, putting the sector on a pathway to carbon neutrality by 2050 while enabling it to continue to respond to global energy demand.

Reinvesting in cleaner production is said to ensure the sector contributes its fair share to GHG reductions and positions Canada for a stronger future for its workers and economy, since oil and gas represent a major contributor to the country’s economy, generating billions in gross domestic product (GDP) last year and accounting for 25% of its exports valued at billions. The sector is also seen as a major employer across the country, directly employing 181,800 people in 2023.

However, some have pointed out that the proposed cap and associated regulations might not be within the constitutional competency of the federal government. Despite the government’s assurance that this is an emissions cap and not a production cap, the proposed regulation’s potential to curtail oil and gas investment and production was also highlighted in more than one report. British Columbia, Alberta, Saskatchewan, and Newfoundland and Labrador have expressed their opposition, as the emissions cap effectively functions as a production cap in their eyes.

The analysis from the Conference Board of Canada sounded the alarm over the implementation of the proposed cap, indicating a staggering drop in the country’s GDP by up to $1 trillion between 2030 and 2040 and a loss of up to 151,000 jobs across the country by 2030. In light of this, one province warned about the potential curtailment in oil and gas production, which would lead to tens of thousands being out of work, with the economic impact felt from coast to coast.

Offshore Energy also looked into the role of digital solutions in pushing Africa’s energy industry to new heights with Adeshina Adebusuyi, Business Development Manager for Africa and Middle East at James Fisher AIS, who pinpointed the whys and hows behind digital technologies’ potential to transform NOCs into the continental leaders in oil and gas production through the optimization of unused capacities, setting sail from production potential to progress on digitalization voyage and overcoming digitalization barriers.

He pointed out that the transformation to digitalized operations could curb costs, bolster safety, and sustainability, as it holds “substantial promise for unlocking Africa’s untapped oil and gas potential and boosting the overall economy, provided that the necessary infrastructure, skills, and regulatory frameworks are put in place.” Adebusuyi believes Africa can reach its decarbonization goals through digital adoption with a set of energy and regulatory moves based on individual countries’ needs.

Seascape Energy Asia, former Longboat Energy, decided to leave Europe to focus on establishing a full-cycle E&P business in Southeast Asia, as it believes that this region offers a wider range of opportunities for smaller companies engaged in the oil and gas game, thanks to “positive and supportive attitude of the host governments.”

Shell forecasted a rise in LNG demand of over 50% by 2040, primarily because of industrial coal-to-gas switching in China and the increased use of LNG in South Asian and Southeast Asian countries to support economic growth. With gas complementing wind and solar power in countries with high levels of renewables in their power generation mix, this enables “short-term flexibility and long-term security of supply,” according to the UK-based energy giant.

Before the LNG permitting saga, predictions indicated the U.S. was well positioned to spearhead the wave of LNG and FLNG projects in Africa as the continent rolled up its sleeves to lay the groundwork to drive the floating LNG market growth up to 2027.

After OPEC and participating non-OPEC oil-producing countries (OPEC+) agreed to extend their production cuts into 2025 to prop up oil markets, Goldman Sachs deemed it as bearish because eight of these countries already indicated plans to gradually phase out the 2.2 mb/d of extra voluntary oil curbs over Q4 2024-Q3 2025.

Based on a recent report, coal, oil, and gas continued their expansion quest, with over 60 international banks lending a helping hand over the past eight years to keep fossil fuel firms’ businesses afloat by shelling out $6.9 trillion for such projects. The three main banks providing such financing since 2016 have been pinpointed as JPMorgan Chase, Citigroup, and Bank of America.

New Zealand’s offshore acreage has not been on the market for the past six years, thus, no new exploration permits were issued. However, the country’s government put the wheels in motion to reverse the ban on offshore oil and gas exploration by proposing amendments to an energy bill, which serve to lend a helping hand in coming to grips with energy security challenges and potential natural gas supply shortages.

Multiple offshore drilling players were hit with rig suspensions in the Middle East, including Valaris, Borr Drilling, COSL, Arabian Drilling, Shelf Drilling, and ADES – Advanced Energy Systems. All rig suspensions in the region are said to have been received from Saudi Arabia’s Aramco, with more on the cards in the future. Some of these rigs ended up securing work in Asia and Africa.

The Brent crude oil prices, seen as the key driver in the demand for shallow water drilling activity, averaged $81 per barrel during the first ten months of 2024, trading around $75 per barrel when the next batch of rig suspensions started trickling in from the Saudi giant. However, incremental jack-up demand is still forecast to be on the cards in certain regions, particularly in West Africa, with jack-up fleet utilization anticipated to stabilize and improve in 2025.

The OPEC+ cartel’s willingness to support oil markets with further extensions of production cuts is believed to be among the factors that impact drilling activity alongside any escalation in geopolitical tensions in the Middle East and global playgrounds, as this could create upward pressure on crude oil prices in the coming quarters. This is the reason why global oil demand for 2025 is expected to grow at a lower rate than previously anticipated given a downgrade in forecasts for consumption in OECD-developed economies.

Multiple hydrocarbon discoveries came to light last year, making it obvious that the oil and gas era is far from over, casting doubt over predictions of peak oil and gas demand. Three oil discoveries in mid-March 2024, made in Guyana, Namibia, and China, serve to illustrate the zest for further offshore drilling activities. ExxonMobil made its first oil discovery at the Stabroek block in 2024 using a drillship owned by Stena Drilling.

The latest black gold find expands on more than 30 discoveries made by ExxonMobil since 2015 at this block offshore Guyana. Guyana is not the only country where the oil boom continues, since Namibia also became another discovery richer, thanks to the exploration campaign undertaken in the heart of the Orange Basin, which is emerging as one of the world’s most prospective oil and gas regions.

These offshore drilling operations, done with an Odfjell Drilling-managed semi-submersible rig, enabled Galp to make a new oil discovery offshore Namibia, close to recent discoveries announced by Shell and TotalEnergies. One of the countries interested in amassing different energy sources to bolster its domestic production and diminish and eventually cut off its reliance on imported energy is Türkiye.

To this end, the country scaled up its exploration efforts to find more oil and gas resources. In line with this, further drilling activities in the Black Sea were on the agenda in 2024, while the country continued to make use of coal and enrich its energy mix with renewable energy and nuclear power.

As the energy transition picks up its pace, Serica Energy and SeaTwirl will pool resources to pinpoint and explore potential decarbonization opportunities for offshore oil and gas production and electrification options with the employment of renewables and underwater energy storage.

Jean Paul Prates, Petrobras’ former CEO, portrayed domestic energy sources in Brazil as the path to “a fair energy transition” while emphasizing the oil and gas sector’s “fundamental part” in structuring the energy transition and leveraging it on a large scale.

Prates was adamant that everyone’s goal should be emissions reduction, without competition between technologies, thus, the world needed to seek ways to combine the best technologies and energy sources based on each location.

Many global energy players also diligently worked on curbing their emissions in 2024 to bring a low-carbon world to life. A new satellite, launched by the Environmental Defense Fund’s MethaneSAT, is expected to provide insight into methane emissions that other tools cannot detect. This is anticipated to usher in an era of heightened accountability and faster reductions, with an initial focus on oil and gas operators as the largest industrial source of the methane menace.

The International Energy Agency also emphasized the need for more action in slashing methane emissions by 75% this decade, which is expected to cost about $170 billion to comply with the Paris Agreement aspirations. All countries around the globe are working on curbing their emissions, albeit in different ways. While commenting on Europe’s efforts, President of ExxonMobil’s European branch highlighted that Europe required decarbonization solutions from the energy industry to unleash the energy transition.

Eni has expressed its determination to slash its methane slip and strengthen reporting in its first-ever report about the firm’s methane footprint. The Italian player’s direct methane emissions were cut by more than half in the 2018–2023 period. The oil major also hit a 95% cut in fugitive methane emissions and an 86% reduction in methane intensity across upstream operations in 2023 based on its 2014 levels.

The icing on the cake of methane menace curbs is a 20% cut in the upstream business’ methane emissions from 2022 to 2023. The firm is working toward zero methane emissions by 2030.
For its part, ExxonMobil, which expects to deliver a growth potential of $20 billion in earnings and $30 billion in cash flow up to 2030, is determined to step up its upstream production game from its advantaged assets in the Permian, Guyana, and LNG arenas while pursuing up to $30 billion in lower emissions investment opportunities.

The European Union made a concrete move to come to grips with the methane menace in the energy sector by ensuring that its first-ever regulation targeting methane emissions will enter into force, enabling its 27 member states to embark on its implementation next year.

North Sea Transition Authority brought up to £3 billion ($3.76 billion) of emissions reduction schemes into the limelight last year, which North Sea companies proposed to slash up to 32 million tons of lifetime CO2 emissions from their production activities.

On a mission to push six countries to align their energy policy with the 1.5°C climate target, environmental activists from the UK, Norway, Sweden, Denmark, Germany, and the Netherlands turned to blockades of certain fossil fuels infrastructure as means of persuading these countries to put an end to new oil and gas infrastructure in the North Sea, stop all plans to license and financially support such projects, and align drilling plans with the Paris Agreement.

The upheaval on the global energy scene was further exacerbated by geopolitical tensions and regulatory shifts in policy, leaving many to flounder about in the background while trying to come to grips with the new realities to dodge the pitfalls that would endanger the security of supply. Global oil and gas taps were flowing at full capacity to ensure enough supply was being shored up to meet the rising demand for more energy.

The Middle East is still in the throes of high tension levels, as the potential Iran-Israel escalation continues to put the region in a precarious position, threatening to open the floodgates of a wider conflict, which would endanger more human lives along with global trade flows, oil, gas, and LNG exports. A region-wide war would, most likely, return energy prices to higher levels witnessed during 2022.

Given the complexities and implications of the threat presented by the potential Strait of Hormuz closure on the oil, gas, LNG, and shipping markets, global trade flows, and the energy transition journey to a low-emission world, James Hill, CEO of MCF Energy, highlighted: “A conflict-turned opportunity is what many are calling the potential blockage of Hormuz. It is a delicate dance between investor opportunity and world crisis for the second time in two years.”

Is the development of OMV Petrom‘s $4.4 billion deepwater gas project in the Black Sea, facing safety issues, given its location and proximity to the battle that rages on unabated in Ukraine? Greenpeace Austria seems to think so, as its report underlines that this European Union project is located in waters that are a part of the war zone filled with sea mines, which pose a threat to shipping, drilling, and other activities in the area, as confirmed by recorded incidents.

Greenpeace outlines that new gas projects like Neptun Deep are not only dangerous undertakings but also incompatible with the 1.5-degree threshold, despite fossil fuel players putting many such infrastructure projects under development in Europe with the excuse of securing the continent’s energy supply to push their gas agenda. The first gas from the 7,500 square km Neptune Deep block in the Black Sea, approximately 160 kilometers from the shore, is expected in 2027.

Ever since the Russia-Ukraine crisis reignited into relentless hostilities in February 2022, after a respite of sorts was put in place in 2014, many different global players have tried to play the role of peacemaker, however, such attempts have not borne fruit so far. This is mostly due to skepticism about Russia’s intentions, as analysts warn that such negotiations would not lead to a lasting peace, instead, the conflict would be frozen once again until Russia decides to rekindle it.

Proponents of sanctions as a way to put pressure on the country to agree to a peace agreement with Ukraine argue that their effects grow over time, eroding the former’s economy, industry, and tech base. They use Gazprom’s first annual loss in over two decades, which was calculated at a staggering 629 billion roubles (around $7 billion) for 2023, as an example of the effectiveness of such sanctions.

The EU greenlighted its 14th package of sanctions against Russia, which among other things, entailed energy-related measures such as prohibition on providing goods, technology, or services to LNG projects under construction in Russia to limit the future expansion of the country’s LNG capacities; prohibition on the transshipment of Russian LNG through EU ports, which comes with a nine-month wind-down; and prohibition on the import of Russian LNG into specific terminals not connected to the EU gas pipeline network.

Within the maritime arena, the EU has included a prohibition on port access and services for listed vessels, placing 27 ships on the list for their contribution to Russian warfare in various sectors such as the transport of military equipment for Russia and the transport of stolen Ukrainian grain, participation in the dark fleet transporting Russian oil while conducting so-called deceptive shipping practices, and support in the development of the country’s energy sector, through the transport of LNG infrastructure components or LNG transshipment.

There were also anti-circumvention measures, expected to curb Russia’s ability to evade sanctions, putting pressure on EU companies to undertake their best efforts to ensure that their subsidiaries in third countries do not participate in any activities undermining EU sanctions. The 15th package of sanctions came a few months later and a dozen European countries joined hands to take action against Russia’s shadow fleet.

The nuts and bolts of picking low-hanging decarbonization fruits first within the offshore energy’s oil and gas arena do not present a problem for the fossil fuels engine, which has been enlarging its arsenal with such tools for some time. However, the constant shifts in energy policy, political upheavals, global security concerns, geopolitical tensions, and rising costs hamper the industry’s ability to respond to energy transition challenges.

The two pillars of a political compromise, known as the Belgian roadmap, broke the stalemate over the Energy Charter Treaty (ECT) within the European Union, giving the Council the final go-ahead for the EU and Euratom to leave the ECT and simultaneously left the door wide open for the remaining member states to revamp the treaty with decarbonization, energy transition, and net zero tools in line with the Paris Agreement goals.

The ECT’s sunset clause presents a potential catch, as it provides a 20-year protection of existing energy investments, thus, if not neutralized, it could hamper the EU’s climate action. According to the Belgian Presidency of the Council of the European Union 2024, an inter se agreement was reached to tackle the issue.

Securing LNG in the future may become a problem for the EU as outlined by QatarEnergy’s CEO, who recently highlighted the potential detriments the EU’s new sustainability rules may bring, including energy security woes for the top global liquefied natural gas import market, given the high penalties gas and LNG importing club members, like Qatar, would need to contend with to keep doing business in the region.

Given the growing divide in public opinion over net zero targets on top of other complexities surrounding the energy landscape, the road ahead appears fraught with difficulties and uncertainties. While a significant portion of energy experts keep claiming that oil and gas exploration and production go hand in hand with decarbonization, the pace of the transition to a low-carbon economy is believed to require some fine-tuning to speed things up.

The cards offshore energy firms have been dealt now are different not only for those fossil fuel giants that are dipping their toes into renewables and other low-carbon and green pursuits but also for their pure-play brethren in the hydrocarbon arena, depending on the global areas in which they operate.

This has become increasingly obvious in some countries like the UK, where the windfall tax coupled with political uncertainty led many countries to come up with plans to downsize their portfolios, change their course, and rebrand by pivoting to cleaner alternatives or close up shop and move away to greener pastures elsewhere, usually in Asia and Africa where the oil and gas fiscal environment is deemed to be more profitable.

The oil and gas sector, alongside the offshore energy industry, has embraced innovation and technological advances as the North Star that will light up the way forward to explore unchartered hydrocarbon deepwater opportunities alongside shallow-water ones to boost production levels and meet the ever-growing hunger for more energy.

While some are already on a green and clean energy diet, most will still devour any power dish put on their table against the backdrop of rising energy costs, escalating geopolitical tensions, increasing population growth, and many other challenges the world is forced to contend with in this day and age.
This does not downplay the need to cut the greenhouse gas footprint, as the climate woes are too persistent and strong-willed to be ignored.

Given the heatwaves, fires, and floods, among other hurdles brought on by climate change complexities, that have engulfed the world even more alarmingly over the past few years, all major oil and gas players have taken steps to pursue decarbonization tools, albeit with varying degrees of success and vigor.
Among the most promising tools in the worldwide emission reduction toolbox are technology, digitalization, artificial intelligence (AI), electrification, and innovation in all its glory and forms.

Even though the Norwegian Offshore Directorate expects oil and gas production to diminish by 2050, it still calls for further exploration activity in Norwegian waters and the deployment of new technologies to avoid putting more than $1.42 trillion in jeopardy because of low hydrocarbon output levels.

On the other hand, the decarbonization steps toward the net-zero agenda enabled Equinor to find a way to cut carbon emissions from the Norwegian Continental Shelf (NCS) by 160,000 tons of CO2 per year with electrification.

With Azerbaijan as the home to the COP29 edition, the high-stakes climate action game in Baku continued to run its course, as global leaders tried to secure the trillions needed to power the energy transition to pave the way for a net zero future. The UN climate negotiations kicked off at COP29 in Azerbaijan to obtain the funds required to foot the climate bill to help vulnerable countries cope with climate challenges, garnering the label of “climate finance COP.”

While it is still too early to speculate on how much will be achieved concerning agreement made at COP29, one of the highlights of the progress made so far came with the breakthrough in adopting Article 6 of the Paris Agreement, which was announced on the very first day of COP29, kicking the preparations for a UN-backed global carbon market into high gear to enable the trading of carbon credits, as an incentive for countries around the globe to curtail their greenhouse gas emissions and spend money on net zero projects.

With $1.3 trillion said to be needed annually by 2035 for developing nations to meet Paris Agreement goals, climate finance seemed to be under the limelight at COP29. In the meantime, an undercover operation, conducted by Global Witness, dives into COPs, including the latest one in Baku, and their link to what the NGO has labeled as a ‘sinister’ petrostate playbook. Based on the organization’s findings, 1,773 fossil fuel lobbyists have been identified at COP29, mostly as part of individual countries and trade associations’ delegations.

The offshore energy industry, especially its oil and gas sector, is constantly under scrutiny, as sustainability and its net-zero quest continue to make inroads. COP29, otherwise known as the ‘finance COP,’ ended up bringing a mixed bag of reactions.

With a trillion-dollar gap between the new climate finance target amount of $1.3 trillion the Global South demanded and the proposed $250 billion, the Global North was willing to pay, the COP agreement, which nearly 200 nations needed to back, appeared to be in dire straits.

The situation changed after COP29 Azerbaijan’s last-ditch effort to turn things around bore fruit during the overtime session over the weekend, just when the divide gave the impression of being insurmountable, as no one seemed willing to budge while the calls for the Global North to pay up for climate damages came to a head.

This COP, which has unlocked carbon markets while the Loss and Damage Fund’s total pledged financial support surpassed $730 million, has tripled climate finance from $100 billion to $300 billion and put a new global climate finance target of $1.3 trillion on the table to be directed toward developing countries by 2030.

However, climate activists expressed dissatisfaction with the deal after the consensus was reached, as they had advocated for more aggressive climate change mitigation efforts. The developing nations’ representatives and civil society alongside non-governmental organizations also see the financial commitments from developed countries as insufficient to enable them to come to grips with climate change.

As the global pursuit of a carbon-free world heats up, environmental sustainability is making inroads, but a low-emission future still has many obstacles to overcome, including perception bias. The tools that found their way to the list of tools needed for a zero-carbon and zero-emission world, such as so-called green gas and carbon units, face doubts and opposition almost in equal parts as acceptance worldwide.

The International Energy Agency’s report shows that the geographical concentrations within clean energy supply chains seem higher than fossil fuel supply. As government incentives for clean energy tripled compared to the amount allocated in response to the 2007–08 financial crisis, reaching $2 trillion since 2020 with around 80% concentrated in China, the European Union, and the United States, new spending measures keep being greenlighted, with more than 40 countries earmarking $290 billion for clean energy in the first half of 2024.

On one side, the world is facing the possibility of running out of fossil fuels while on another it is confronted by climate change woes, thus, diversifying energy sources seems to offer the answer to both the prevention of energy supply shortages and the need to decarbonize the global energy mix.

However, the process has come under fire not just from those advocating stronger climate action but also the ones that see the net zero by 2050 goal as a threat to global energy security, given the insistence on leaving oil and gas in the ground even though these still provide the lion’s share of the world’s energy.

The oil and gas decarbonization array of options within the energy transition ecosystem is not by any means limited to electrification, however, Rystad Energy’s research pinpoints offshore oil and gas electrification as a key tool that could curb more than 80% of oil and gas production emissions.

Global shocks likely put 2030 emission cuts out of reach based on a recent report from Wood Mackenzie, which looks into four energy pathways: base case (2.5 degrees), country pledges scenario (2 degrees), net zero 2050 scenario (1.5 degrees), and delayed transition scenario.

This report forecasts that a $78 trillion investment will be needed across the power supply, grid infrastructure, critical minerals, and emerging technologies to meet the goals of the Paris Agreement. WoodMac underlines that global energy demand is on the rise, driven by upticks in incomes, population, and the emergence of new demand sources such as data centers and electric vehicles.

The report emphasizes that strong solar and wind power growth is given in the energy transition journey, thus, it continues under all scenarios, supplying 25% and 36% of total power output by 2030, and between 53% and 61% by 2050. However, Wood Mackenzie is adamant that renewables alone will not be able to meet future energy needs in most markets. As a result, oil and gas are projected to keep playing a role in the global energy system up to 2050.

A potential legal framework may arise out of a series of climate change hearings at the International Court of Justice (ICJ), which were conducted to aid the court in shedding light on countries’ legal obligations under international law and the consequences for breaching them.

While the court’s advisory opinion is not binding, it will still carry weight, likely influencing the future course of climate action. What this will mean for the global energy industry, particularly its oil and gas segment, remains to be seen.

Meanwhile, New York’s climate action move aims to ensure that major oil and gas players will pick up the $75 billion tab, which will enable the state to create a new climate fund to boost environmental protection laws.

“The Climate Change Superfund Act is now law, and New York has fired a shot that will be heard round the world: the companies most responsible for the climate crisis will be held accountable. Too often over the last decade, courts have dismissed lawsuits against the oil and gas industry by saying that the issue of climate culpability should be decided by legislatures,” highlighted New York State Senator Liz Krueger.

“Well, the Legislature of the State of New York – the 10th largest economy in the world – has accepted the invitation, and I hope we have made ourselves very clear: the planet’s largest climate polluters bear a unique responsibility for creating the climate crisis, and they must pay their fair share to help regular New Yorkers deal with the consequences. And there’s no question that those consequences are here, and they are serious.“

The answer to this question is not as straightforward as some may think, and certainly not a resounding yes that would have been fired off immediately in response two years ago when the oil and gas industry enjoyed a profit bonanza. With the payday from renewable projects being slow in coming, the rising interest rates and costs are increasingly putting the financial stability of such projects at risk, especially since they take years to develop and put into operation before any money starts to trickle in.

The oil and gas industry was enthusiastic about its foray into emerging low-carbon and renewable technologies, embracing strategic diversification with gusto to come to grips with the energy trilemma and reach its decarbonization and net zero goals. However, time chipped away at the initial fervor as these new energies and green solutions did not magically bring pots of gold.

These types of projects, especially the more innovative ones that combine multiple clean energy sources, require a lot of spending to get off the ground but have not been able to rake in substantial profits, or even be profitable in some cases. Those that did make a profit were not able to reach the same or even similar level that the energy industry’s fossil fuel darlings, black gold and the bridge fuel or transition fuel as gas is often called, have been doing all along.

The lack of substantial profit, rising costs, regulatory delays, and grid bottlenecks, combined with other specific sets of challenges such projects need to overcome, have made things difficult for developers with investors’ confidence taking a hit. In light of such woes, some energy players are putting their renewable and clean energy projects on ice until circumstances change to make the pursuit of such developments more financially rewarding for investors.

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These green projects are not likely to bring returns anytime soon due to the amount of time it takes to bring them online and the financial hardships developers are facing. Navigating the new normal buffeted by tectonic shifts in energy and regulatory policies, economic challenges, geopolitical tensions, supply constraints, and growing energy demand will require closer collaboration bonds across all sectors, along with support from governments.

While global energy spending was anticipated to surpass $3 trillion in 2024 for the first time, clean technologies were forecast to contribute about $2 trillion to the overall investment, with fossil fuels bringing up the rear with nearly two times lower sum, which still exceeded $1 trillion. According to the International Energy Agency, worldwide clean power investments will have to grow from $1.8 trillion in 2023 to $4.5 trillion annually by the early 2030s to reach net zero.

Based on the data from the International Energy Agency, global renewable electricity generation is forecast to climb to over 17,000 TWh (60 EJ) by 2030, a spike of almost 90% from 2023 and enough to meet the combined power demand of China and the United States in 2030.

The IEA anticipates several renewable energy milestones to be reached, including solar PV and wind generation together surpassing hydropower generation in 2024, renewables-based electricity generation overtaking coal-fired in 2025, wind and solar power generation both surpassing nuclear in 2026, solar PV electricity generation passing wind in 2027, solar PV electricity generation exceeding hydropower and becoming largest renewable power source in 2029, and wind-based generation overtaking hydropower in 2030.

The U.S. and Europe are eyeing new subsea energy ties across the Atlantic through the development of a green electricity network to connect America to Europe via Eastern Canada and the UK and Ireland to foster energy independence with a 6 GW high-voltage direct current (HVDC) set of subsea cables.
These are envisioned to stretch across the Atlantic to link North America and Western Europe, forging clean energy bonds between allied nations to ensure “a secure and cost-effective source of carbon-free power,” according to the founding fathers.

Is this and similar projects the future of the global energy mix? Will green energy interconnectors replace oil, gas, and LNG or is it too early to speculate on this? These types of projects have to tackle their own set of issues. The ongoing increase in threats to offshore energy infrastructure, regardless of whether it is related to oil and gas or renewables, is pushing countries to step up their security levels to eliminate the possibility of future attacks.

The need to take steps to mitigate the danger to critical underwater infrastructure, especially subsea installations, pipelines, and cables that are located underwater, was spotlighted by the damage the Nord Stream pipelines suffered in 2022.

TotalEnergies is set on seeing through a floating offshore wind pilot project, which will supply around 20% of the power requirement to enable emission cuts by bringing renewable energy to the firm’s offshore platform producing from a high-pressure, high-temperature (HPHT) gas condensate field in the East Central Graben area of the central North Sea.

This giant natural gas field has three bridge-linked offshore platforms for drilling and hydrocarbon production, processing, and export of produced gas and condensate, and the crew’s living quarters. There is also a floating storage and offloading (FSO) vessel, which can store up to 430,000 barrels of oil equivalent of condensate.

Saipem has joined forces with newcleo to bring nuclear technology plays in the offshore oil and gas arena while checking out the feasibility of floating nuclear-powered unit developments to usher in zero-emission energy, propelling the energy transition journey forward and paving the way for a sustainable future.

Alessandro Puliti, CEO of Saipem, underlined: “The production of zero-emission energy through floating offshore plants equipped with new generation compact reactors could represent a new frontier in the energy transition.

“With this collaboration agreement, we leverage Saipem’s distinct skills in the offshore sector as well as our ability to bring innovation to the world of energy infrastructure, to explore new solutions that can accelerate the path towards decarbonisation.”

Equinor has stepped up its carbon reduction by enabling the partial electrification of two offshore platforms at one of its fields in the North Sea offshore Norway. The Norwegian player also continues to move forward with the full electrification of one of these platforms to slash almost 4% of the total emissions from oil and gas production, representing about 1% of total emissions in Norway.

Kjetil Hove, Equinor’s Executive Vice President for Exploration & Production Norway, underlined: “We have made several new discoveries in the Troll and Fram area in recent years. Thanks to Troll B and C electrification we can develop and produce these resources with very low emissions. The Troll area will continue to deliver large volumes of low-carbon, high-value energy for many years to come.”

Many factors play a role in the race to net zero, including trust in the technologies being used to achieve this goal such as carbon capture and storage. Worley has looked into the impact trust in CCS or lack of it has in the deployment of this decarbonization tool in the United States. The findings indicate that distrust is among the main reasons preventing the industry from reaching its full potential.

Closing the net zero gap is said to call for technology deployment, policy, and incentives across the entire energy system to accelerate climate action by deploying and adopting renewable energy sources (RES), electrification technologies, carbon capture, utilization, and storage, green and blue hydrogen, and other sustainable fuels.

McKinsey & Company’s energy scenarios point out that these decarbonization tools alongside nuclear, long-term duration energy storage, battery energy storage systems, and energy efficiency investments, among others, are the cornerstone of endeavors to curb the GHG emissions footprint.

“Transforming the energy system hinges on the coordinated deployment of interlinked and interdependent technologies. A slowdown in deployment in one area of the energy system can cause cascading delays and hamper the growth of other technologies,” stated Humayun Tai, Senior Partner at McKinsey.

Regarding projects with longer lead times in specific technologies, such as offshore wind, the research notes the industry’s ongoing trend of reaching the stage at which FID status projects will become operational after 2030, which affects the countries’ abilities to meet the 2030 Paris Agreement goals.

“This data confirms the reality gap that we believe the industry is experiencing, especially through inflation and system shocks alongside geopolitical uncertainty, which is seeing international supply chain tensions and trade disruptions. It further underscores the need for companies to reassess the current strategies to further drive the transition,” underlined Tai.

The UK, which has its heart set on decarbonized oil and gas production, has made inroads in slashing its greenhouse gas emissions by approaching its methane reduction target seven years before 2030 and going beyond the 25% production emissions drop four years ahead of its deadline, based on Offshore Energies UK’s report.

Mark Wilson, HSE & Operations Director at OEUK, commented: “Oil and gas will remain essential for decades to come. It is better from all points of view – financial, environmental and social that energy comes from our own homegrown North Sea supplies.

“The alternative is importing more of the oil and gas we still need. This can increase the carbon footprint by up to four times and lead to loss of UK revenue, endangering jobs as well as impacting our security of supply.”

After taking into consideration nearly 5 billion barrels of oil and gas, a 60 GW target for offshore wind, and up to 78 GT of carbon storage potential, Stuart Payne, Chief Executive of North Sea Transition Authority, appears in agreement with Wilson, since he is adamant that the UK’s oil and gas industry has what it takes to complete the energy transition quest with safety, emissions cuts, timely well decommissioning, and greater diversity at the core of its North Sea strategy.

Wood Mackenzie has outlined that the United Kingdom could make use of an additional £10 billion of North Sea oil and natural gas value from existing assets as it is at its fingertips if the lack of investment certainty and confidence is addressed and the negative trend reversed to encourage more investments by selecting the right fiscal and regulatory policies and implementing them.

“Operators are fatigued by an ever changing and overly onerous tax burden and are accordingly adjusting the risked value associated with investing in the UK. The best-case scenario we have developed is improbably optimistic, but very important to recognise, as it highlights the substantial potential value at risk in the North Sea oil and gas industry, due to the UK government’s fiscal decisions,” highlighted Fraser McKay, Senior Vice President of Upstream Research at Wood Mackenzie, whose view is shared by Offshore Energies UK.

“There is still a chance for the UK to realise some or all of this additional value, to reduce its scope 1 and 2 impact, and for stakeholders to channel this cash flow into funding the UK’s energy transition. But the longer the government waits, the fewer growth opportunities there will be, due to decommissioning and the maturity of the UKCS.”

Oil and gas, renewables, and other clean and green energy plays are perceived not to be all that different, as the UK’s energy game will still be played to the same energy security, affordability, and sustainability drum with similar and even the same players that feature prominently in the fossil energy landscape.

This is illustrated in Offshore Energy‘s most recent op-ed piece, in which 𝐓𝐞𝐫𝐫𝐲 𝐀𝐥𝐥𝐚𝐧, CEO of Aberdeen-headquartered nexos, dives into the United Kingdom’s winner-take-all stance on the future of crude oil, natural gas, LNG, and clean energy acceleration – often portrayed as mutually exclusive in the energy transition era.

Allan highlighted: “Oil and gas, like tennis, is no longer the only game in town. Fixed-base offshore wind is maturing, floating turbines are on their way, and offshore wave, tidal, hydrogen, and carbon capture and storage (CCS) projects are emerging just beyond the horizon. This is just offshore – a whole new generation of wind, hydrogen, and transmission and distribution projects are in the works onshore.”

These views seem to threaten the survival of domestic oil and gas production, as the industry grapples with grueling legal challenges, while energy security concerns, spurred by geopolitical tensions, and net zero transition outcries, sparked by climate change woes, enable certain currents to push the narrative of win-or-lose ideology forward rather than promoting coexistence of all energy plays and emerging low-emission technologies for a balanced transformation of Britain’s energy industry.

nexos’ CEO also emphasized: “In the UK, we have a strong hydrocarbon-based energy system that ranks among the cleanest in the world. Very soon, we will have a multi-faceted, interconnected energy system that is even cleaner. We need to champion and protect both. After all, many of those determining our future energy policy will probably play padel – and I am guessing they still play tennis too.”

The modernization steps to streamline and enhance operations by deploying digital technologies have successfully boosted efficiency, safety, and sustainability. The need to tackle complex challenges on many fronts is pushing not just the oil and gas industry, but also the overall energy, maritime, offshore, and other global sectors into the arms of digital transformations.

It has lent a helping hand in tackling and downsizing existing inefficiencies and costs while working to prevent the insurgence of new ones, achieve greenhouse gas emissions cuts, ensure employees’ health and safety by replacing more and more dangerous offshore activities and inspections with unmanned operations performed with drones, ROVs, robots, and the like, to make working environments safer for the energy workforce by curbing existing health and safety concerns with adequate measures in place to mitigate them and protect the lives of oil and gas workers.

While some battles the energy industry, primarily oil, gas, and LNG are facing, have pilled up throughout a lifetime without ever fully being extinguished, flaring to life now and then, other fights may be more recent and short-lasting as long as the issue is tackled right away.

One of the main challenges the energy sector is grappling with is related to the energy transition domain’s developments within the oil and gas industry, which is increasingly promoting and advocating for a more integrated approach to explore and mix various strategies and opportunities available to come up with more efficient and effective ways to embrace and implement decarbonization initiatives.

With climate change on the warpath, calls to curtail GHG emissions have grown in size, with decarbonization routes for the oil and gas industry entailing CCS, hydrogen production, renewable power generation, electric vehicles (EV), energy storage, and other low-carbon fuels.

While 2020 and even 2021 saw several oil and gas companies pledge ambitious net zero targets, the zest surrounding the energy transition momentum seems to have tapered off in 2024. OPEC’s ‘2024 World Oil Outlook 2050’ estimates that cumulative oil-related investment requirements amount to $17.4 trillion over the entire 2024–2050 period, or around $669 billion a year.

“Demand for all major fuel types increase over the outlook period. Oil maintains the largest share in the energy mix to 2050. The share of other renewables (mainly solar, wind and geothermal) in the global energy mix is expected to increase from 3.2% in 2023 to 14% in 2050,” underscored OPEC.

While preparing to launch its eighth ‘Energy Transition Outlook (ETO),’ a comprehensive report unlocking science-based projections of the most likely direction the global energy mix will take, alongside the supply, and demand side of things over the next 25 years, DNV pointed out that its research indicates this could be the year of peak global energy emissions, with coal and oil being squeezed from the energy mix as a result of decreasing costs of solar and batteries.

In addition, DNV predicts a downturn in hydrogen production as market forces and policy fail to secure progress in hard-to-abate sectors. The offshore wind sector is forecast to experience much slower growth hampered by multiple challenges. Unlike the slowdown some energy sources are forecast to face, digitalization firmly has growth in its sights, with the internet of things (IoT) technologies, digital twins, data analytics, and blockchain technology set for further increase in demand.

According to GlobalData, which predicts that IoT revenue in the energy sector will hit $59 billion by 2025 from $34 billion in 2019, driven by the rise in demand for the provision of robots to assist in oil operations. Robots are increasingly replacing people in undertaking danger-ridden activities on platforms, and oil and gas giants have recognized the ongoing trend, with ExxonMobil, Baker Hughes, Chevron, Aramco, Equinor, TotalEnergies, Shell, and BP upping their robotics investments ante and helping boost the industry’s rapid growth spurt at a CAGR of 28% from now to 2030.

The upsurge in digitalization also spurred the deployment of ‘ghost rigs’ otherwise known as unmanned oil platforms being operated remotely, thereby lowering the number of onboard workers. The oil and gas automation market is set to rake in $24.63 billion in revenue by 2025, rising from $17.17 billion in 2020, at a CAGR of 7.5%, based on the report.

Given digitalization’s potential for alleviating reliance on supply chains with operational mechanisms that monitor and evaluate processes and help bolster productivity greater efficiency, cost-cutting, and enhanced health and safety in operations, the need for rapid digitalization became clear and has led to greater investment in the research and development of new technologies and their incorporation into oil and gas operations.

As Mark Twain aptly put it, when he said that every person was like a moon and had a dark side, the same goes for digitalization. The part that it does not want to show is its vulnerability to cyberattacks, which have become more frequent since 2022 as geopolitical tensions continue to spike. The driving need to optimize operations, lower costs, and ensure employee and asset safety is boosting the case for digitalization.

Yet, despite the enormous progress, the oil and gas industry still needs the human touch to avoid the traps some may decide to throw in its path by weighing all the risks to find the best solution to secure its digital assets while keeping up with the technological innovation pace.

Since cybersecurity issues have surpassed mere data theft and moved to tread on even more dangerous ground with much higher stakes, loss of confidential information is no longer considered the worst-case scenario as the new advancements in tech serve to both better protect and endanger the control systems that operate critical infrastructure.

As a result, unauthorized access to pipeline control systems, operational data tampering, and shutting down main energy infrastructure components could have huge ramifications spanning financial losses, putting public safety in peril, and even leading to environmental disasters.

Some claim that the world is biting off more than it can chew with increased reliance on artificial intelligence and other digitalization-spurred developments such as automation and unmanned operations, given the consequences such innovations could bring, including job losses due to fewer personnel requirements as automation takes hold.

Others offer a rebuttal pointing out that digitalization also gives rise to new job opportunities, makes work safer, and enables, among other things, easier access to knowledge and data. While the benefits of tech advancement are glaringly obvious, the danger that clings to it does need to be given more thought to prevent potential complications down the road.

How can operators raise the safety bar with technological advancements but nip in the bud the dangers such tech improvements carry? Even after removing human error from the equation, and ensuring all the equipment is in top-notch condition, accidents and bad things still happen either by being deliberately set into play by someone or through ‘divine intervention’ – after all, natural disasters do still strike.

Given the unpredictable nature of both cases, charting the course to build a better, safer, and more peaceful tomorrow requires caution, watchfulness, timely intervention, the right set of technologies, people trained to deal with complications when they arise, and proper emergency procedures in place, should they be required.

“All forms of energy, all relevant technologies, and all people are required to address future energy needs and challenges. Global primary energy demand is set to increase from 301 million barrels of oil equivalent a day (mboe/d) in 2023 to 374 mboe/d in 2050, or 24% overall,” emphasized OPEC Secretary.

The attempts to lessen the greenhouse gas effects are growing in size, but a lot more remains to be done to make global oil and gas production cleaner. The steps the fossil energy sector has taken to enable clean energy are significant, especially since most entail some progress in working toward their ambition of branching out further into the greener side of the grass and turning themselves into integrated companies in line with those plans since new initiatives are springing about integrating multiple new low-carbon techs and cleaner source of supply to highlight goals of achieving zero emissions.

Does this imply that oil and gas can go beyond zero, or are those just fanciful notions and pipe dreams? Is beyond the realm of net zero a feasible endeavor for fossil fuels, including LNG? If so, what would be needed to get it right? Is it a miracle Holy Grail of decarbonization or just the right mix of ingredients to unleash zero-emission oil and gas in global energy flows?

As wave after wave of optimization pursuits splashes onto the shores of offshore supply vessel (OSV) fleets, most of these maritime and shipping players tend to be oriented toward digital system upgrades. These vessels offer services to companies focused on a diverse pool of sectors and industries, including subsea, oil, gas, and renewable energy domains.

Given the inroads digitalization has made within not only the offshore energy market but also the shipping industry, Offshore Energy set off on a journey to shed more light on the role these digitalization moves play in enabling the OSV market to overcome decarbonization-motivated regulatory hurdles and unlock new opportunities for its fleets.

𝐃𝐚𝐦𝐢𝐞𝐧 𝐁𝐞𝐫𝐭𝐢𝐧, Opsealog’s Business Director, joined us on this voyage, which revolved around the current trends, headwinds, tailwinds, and future opportunities for the OSV market. Bertin sees the increase in energy efficiency and overall optimization of ship’s performance that digital solutions bring as a shoo-in to step up energy saving levels, cut costs, curb GHG emissions, streamline operations, raise the safety bar for offshore work to safeguard workers and assets while marching firmly to the beat of the IMO net-zero drum.

“Ultimately, what will transform the OSV industry is a combination of initiatives: the efficiency gains delivered by digital solutions are a low-hanging fruit in the short term. In the medium term, we will see more owners deploy dedicated maintenance plans founded on data analysis. Finally, in the longer term, new designs and retrofits will be essential to take the industry to net zero,” highlighted Bertin.

While this was no walking tour of Paris or a stroll along the Seine, the picture of the offshore supply ships’ future, which the Business Director of the France-based Opsealog painted for us, is just as enjoyable since Bertin enriched it with evolving technologies, a blossoming array of propulsion tools, and decarbonization gains.

American Bureau of Shipping’s new report spotlights the potential of nuclear technology in the maritime industry through a study of a small modular reactor (SMR) on a standard LNG carrier.

While advocating faster decarbonization of energy systems during a recent interview on Bloomberg TV, Håkan Agnevall, Wärtsilä’s President & CEO, summed up the transformation of the energy sector rather succinctly by saying: “Green is not black or white – there is no single simple solution to the energy transition, and we will need all the tools in the toolbox.”

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𝐃𝐨 𝐲𝐨𝐮 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐠𝐫𝐚𝐛 𝐭𝐡𝐞 𝐚𝐭𝐭𝐞𝐧𝐭𝐢𝐨𝐧 𝐨𝐟 𝐲𝐨𝐮𝐫 𝐭𝐚𝐫𝐠𝐞𝐭 𝐚𝐮𝐝𝐢𝐞𝐧𝐜𝐞 𝐢𝐧 𝐨𝐧𝐞 𝐦𝐨𝐯𝐞? 𝐋𝐨𝐨𝐤 𝐧𝐨 𝐟𝐮𝐫𝐭𝐡𝐞𝐫 𝐭𝐡𝐚𝐧 𝐎𝐟𝐟𝐬𝐡𝐨𝐫𝐞 𝐄𝐧𝐞𝐫𝐠𝐲! 𝐎𝐮𝐫 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐫𝐞𝐚𝐝 𝐛𝐲 𝐭𝐡𝐨𝐮𝐬𝐚𝐧𝐝𝐬 𝐨𝐟 𝐩𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬 𝐞𝐧𝐠𝐚𝐠𝐞𝐝 𝐢𝐧 𝐨𝐢𝐥 & 𝐠𝐚𝐬, 𝐦𝐚𝐫𝐢𝐭𝐢𝐦𝐞, 𝐨𝐟𝐟𝐬𝐡𝐨𝐫𝐞 𝐰𝐢𝐧𝐝, 𝐠𝐫𝐞𝐞𝐧 𝐦𝐚𝐫𝐢𝐧𝐞, 𝐡𝐲𝐝𝐫𝐨𝐠𝐞𝐧, 𝐬𝐮𝐛𝐬𝐞𝐚, 𝐦𝐚𝐫𝐢𝐧𝐞 𝐞𝐧𝐞𝐫𝐠𝐲, 𝐚𝐥𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐯𝐞 𝐟𝐮𝐞𝐥𝐬, 𝐬𝐡𝐢𝐩𝐩𝐢𝐧𝐠, 𝐚𝐧𝐝 𝐨𝐭𝐡𝐞𝐫 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐞𝐬 𝐨𝐧 𝐚 𝐝𝐚𝐢𝐥𝐲 𝐛𝐚𝐬𝐢𝐬.

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