BAKU, Azerbaijan, June 25. Banks and insurance companies are set to impose stricter criteria for oil and gas companies, Trend reports.
Pure-play oil and gas companies are expected to encounter operational limitations that will result in increased project costs, including labor expenses and restricted access to financial services. As financial institutions, such as banks and insurance companies, strive to achieve their net-zero goals and comply with stricter regulations, a larger number of them will impose more stringent requirements on oil and gas companies.
Fitch Solutions believes that this trend will lead to a reduced pool of providers offering crucial financial services to the industry. The growing influence of ESG and sustainable investing portfolios, as well as climate activist-led investor groups, further highlights this shift.
The energy transition will also contribute to challenges related to changing labor dynamics, particularly in terms of securing a skilled workforce for oil and gas companies. The perception of limited career prospects in the industry, coupled with increased awareness of climate change issues among younger generations, has resulted in shortages of skilled workers in the upstream sector in the US. This trend is expected to persist. In response, oil and gas companies are likely to embrace digitalization and automation to address labor market challenges and enhance operational efficiency. Automation efforts, particularly in projects located in remote and sparsely populated areas, are expected to be prioritized by these companies. However, current expectations do not include significant investments in education and training for long-term development, despite efforts to improve local workforces through minimum content requirements and direct investment from energy companies.
The rise of technology will render middle-tier and managerial positions vulnerable to replacement, as decision-making processes shift towards artificial intelligence. This will lead to a reduction in middle-tier roles focused on oversight and planning. While the adoption of robotics will decrease the number of workers required in the field, there will still be a need for specialized onsite personnel to service and maintain these systems. However, drilling sites are anticipated to continue relying on significant manual labor, as certain functions are not easily replaceable or cost-effective using robotics.
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