In focus: Energy transition nudges oil and gas into strategic reviews as renewables enter record-breaking age

Oil and gas companies and associated supply chain have started responding to the global energy transition push by announcing strategic business reviews and expansion of focus to cleaner and emissions-free markets more aligned with net-zero targets, as renewable energy sector prepares to enter the record-breaking age bound to continue with each passing year.

The week behind us brought numerous energy transition-related announcements from all across offshore energy and shipping sectors, signaling the decarbonization of the entire energy system and the world in general is increasingly picking up pace.

Starting with the offshore energy market with the biggest share in the global energy mix – that of fossil fuels – and also the one to blame for contributing the most to man-made climate change, the oil and gas sector is starting to see a shift towards more sustainable solutions, inevitably bringing the associated supply chain towards the same goal.

Namely, the government-controlled energy holding company of Abu Dhabi – TAQA – has initiated a strategic review of its oil and gas operations.

According to the company, the review will assess strategic options for the oil and gas division and the optimal course for its future development while taking into consideration the evolution of the global energy industry as it transitions towards a cleaner and more sustainable future.

The sector’s supply chain is simultaneously making the same steps, which is most evident in the decision of an independent provider of subsea remotely operated vehicles ROVOP to launch the new phase of strategic growth and diversification across the region of Americas.

The diversification refers to ROVOP’s intention to increase its North American focus on new opportunities in the emerging offshore renewables sector, particularly offshore wind, which until recently was primarily on oil and gas.

Russia is also joining the energy transition push with couple of notable alliances forged with an aim to lower the emissions coming from fossil fuels-powered ships, as witnessed in the move by Gazprom Neft, a unit of Russian gas giant Gazprom, which inked a deal with Sovcomflot to work on several low-carbon marine fuels to lower emissions in the Russian Arctic.

Also, the Russian government joined forces with Japanese shipping major Mitsui O.S.K. Lines (MOL) and other partners to conduct a study to build, operate and utilize a dual-fuel methanol carrier.

The partners will consider introducing an environmentally friendly vessel that can reduce emissions of sulfur oxides (SOx) by up to 99%, particulate matter (PM) by up to 95%, nitrogen oxides (NOx) by up to 80% and carbon dioxide (CO2) by up to 15% compared to conventional fuel oil.

The emerging renewable energy industries are also showing accelerated progress towards full maturity and consequently towards a larger share in the global energy mix, with the latest investment in the Scottish tidal energy pioneer Nova Innovation.

The company received a multi-million pound backing from the Scottish National Investment Bank to fund mass manufacturing and distribution of its innovative tidal energy turbines, and support its business expansion to both local and global markets.

With the appropriate government backing, tidal energy industry might follow the similar path of another renewable energy technology, which was also in the nascent phase a couple of decades ago, and is now reaching record levels on various fronts.

The renewable energy industry in question is, of course, offshore wind which could see 2021 as its record-setting year in newly installed capacity globally.

According to the forecasts of the Global Wind Energy Council (GWEC), 235GW of new offshore wind capacity will be installed over the next decade under current policies.

That capacity is seven times bigger than the current market size, and is a 15% increase on the previous year’s forecasts.

However, GWEC warned that the world had so far installed only 2% of the offshore wind capacity that would be needed by the middle of this century to avoid the worst impacts of climate change.