KUALA LUMPUR: Oil and gas majors are transitioning into new energy portfolios and partnerships as pressure mounts for business growth and environmental sustainability.
In an interview with The New Straits Times, Petroliam Nasional Bhd (Petronas) vice president of refining and trading Mohd Yusri Mohamed Yusof said that the global energy landscape is going through structural changes ? and trends are emerging with new business and partnership models, as risks, and returns are being weighed out.
?It is a transition ? from what was categorically upstream, and downstream businesses monetising hydrocarbons, to now, the inclusion of other energy supply sources in the mix,? said Yusri who is also the chairman of the Asia Oil and Gas Conference (AOGC) 2019 organising committee.
Petronas, for example, recently acquired Amplus Energy, a solar company, and restructured itself to include a Gas and New Energy business.
Other global players have also repositioned their business to incorporate a broader energy portfolio, allowing them to harness the potential of renewable energy in addition to oil and gas.
Yusri added that energy producers today grapple with increasing pressure to make energy more affordable, reliable and sustainable, in an environment where supplies are becoming costlier, more difficult to access and located in areas farther away from demand centres.
To forge ahead for a new energy future, oil and gas corporations have started to reinvent their business models to include renewable energy portfolios to remain competitive and relevant.
A recent report by analyst firm Wood Mackenzie stated that despite the 22 per cent return on equity investment for onshore projects in North America, which outweighs the 5 to 7 per cent guaranteed revenue return on solar projects and the 7 to 9 per cent return on wind projects, oil and gas majors have been actively pursuing the renewables business.
According to industry pundits, the proportion of renewable energy sources of the global energy consumption could reach 15 to 20 per cent by 2050; while the total amount of investments in renewable energy sources could be 2.5 times greater than the current level.
Returns from renewables not only can match exploration, downstream projects and upstream merger and acquisition investments, but also take a shorter time to realise.
Notwithstanding, the oil and gas sector is still expected to be part of the solution for sustainable energy and economic development, particularly in Asia, which is the world?s fastest-growing region.
Yusri pointed out that there are new opportunities in the oil and gas industry, particularly in the downstream sector, where oil and gas players are formalising partnerships to reduce environmental wastage or emissions in their operations.
The trends, opportunities and challenges facing the industry, cutting across both the upstream and downstream sectors, will be discussed at AOGC 2019 in Kuala Lumpur.
Prime Minister Tun Dr Mahathir Mohamad is scheduled to deliver the keynote address and Economic Affairs Minister Datuk Seri Azmin Ali will present his view at the event.
Now in its 20th edition, AOGC provides a platform for exchange of ideas among oil and gas key policy decision-makers, industry captains and experts, engineers, operators, traders and managers as they contemplate their evolving future.
Some 1,300 international and local delegates are expected to participate in AOGC, Asia’s largest energy business gathering.
AOGC 2019 will be held from 23 to 25 June at the Kuala Lumpur Convention Centre. Some 30 renowned speakers will be taking the stage to discuss how the industry can forge forward.
Source: The New Straits Times