Baku, Azerbaijan, July 22
By Leman Zeynalova – Trend:
Gas will offer an important bridging fuel and strong policy support will see gas gaining ground globally, offering a more secure long-term demand pool, Trend reports citing Fitch Solutions Macro Research (a unit of Fitch Group).
“Much of this growth will be driven from the power sector, largely in Asia. In addition, it supports efforts towards emissions reduction, which will help companies to answer rising social pressures and navigate ongoing changes in global regulatory and investment landscapes,” reads the report released by Fitch Solutions.
In the short-to-medium term (five to 10 years), investment will remain heavily concentrated in oil and gas, the company believes. “However, within this, the focus will shift and emissions intensity will become increasingly integrated into investment decision-making.”
The report shows that several trends are unfolding in the sector: 1. Increased investment into gas, in particular LNG; 2. Increased investment into short- and mid-cycle projects; 3. Increased focus on technology and digitalization.
“In combination these will tilt the asset base towards less carbon-intensive and lower-cost resources. Given its high emissions intensity and dominant role in the global energy mix, the Oil & Gas (O&G) sector has a central part to play in driving initiatives to meet the objectives of the sustainability agenda and the transition to the low carbon economy; abbreviated to 2CT. However, whether it has any lasting role in this
economy is far from clear. For a sector whose business is the production, transformation and sale of hydrocarbons, we see three possible responses to the 2CT: adaption, disruption or managed decline. All three responses demand a significant shift in corporate strategy. The three are not entirely mutually exclusive and the appropriate response will vary by company. Below we address the opportunities and risks inherent in each,” the company said.
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