Schreiner Parker, Managing Director for Latin America at Rystad Energy, believes that the global oil and gas industry faces significant external pressure to adapt to future realities. Despite this, he asserts that oil and gas companies, including national oil companies (NOCs), are adept at reacting and adapting to paradigm-shifting changes.
In a recent analysis, Parker emphasized that NOCs must balance future energy diversification and current opportunities. “All NOCs today should be of two minds, thinking of both the future and how the definition of ‘resources’ will expand from hydrocarbons to include many other sources of energy,” he said, while also focusing on present opportunities in the sector.
“There is no question that the world still needs oil and will continue to do so for some time to come,” he said. Parker predicted that oil demand will grow in the medium term, peaking in the next decade. Despite a decrease from the 2030s onward, long-term demand remains robust, with over half of today’s oil consumption still needed in 2050. “This demand outlook means there is also a continued call for exploration activity,” he added.
Several NOCs have recognized this need. “Petrobras is continuing to push exploration efforts in the Equatorial Margin of Brazil. CNOOC has recently seen drilling success in the South China Sea. Qatar Petroleum continues to invest in exploration licenses globally, including in the prolific Guyana-Suriname Basin,” Parker notes. He also mentions Equinor’s ongoing exploration on the Norwegian continental shelf and in the Argentina Norte Basin.
Simultaneously, NOCs are planning for diversification. “Saudi Aramco’s CEO said recently that the world’s largest oil-producing company has earmarked US$7.5 billion for venture capital investments in cleantech,” Parker highlighted.
Parker sees these actions as NOCs testing the waters. “At this early stage in the game, it seems as though most NOCs are trying to adopt a broad perspective while the future energy system comes into focus.” He pointed out that NOCs favor long-term, capital-intensive, technically complex projects, making them well-suited for certain energy transition projects.
“NOCs are, by their very nature, disruptive thinkers,” Parker concluded. To effectively benefit their nations, NOCs must balance traditional operations with new energy opportunities. “By reframing the definition of the word ‘resource’ to include such things as wind, solar, water, and crops, NOCs can position themselves enviably to ride the energy transition wave.”
