A strong majority of oil executives state that prices over $60 per barrel will boost or complement their energy transition in the near term, according to Deloitte’s 2022 Oil and Gas Industry Outlook.
“A strong oil price enables investment in riskier and expensive green energy solutions, such as carbon capture, utilization, and storage (CCUS),” notes the outlook.
Deloitte also sees ESG considerations playing an increasingly important role in mergers and acquisitions, which are often linked to high prices. According to the accountancy firm the transparency of ESG within companies could become an increasingly important factor in merger and acquisition activity.
“Companies pursuing their net-zero goals are either looking to acquire low-carbon-intensity barrels or divest the high-intensity ones, implying that there might be an acreage consolidation or portfolio restructuring on the horizon,” notes the report. “But a large resource size and an attractive offering price may not be enough to elicit a response from a buyer focused on meeting its net-zero targets.”
The report also notes that greener jobs could be the best recruiting pitch for oil and gas companies wishing to secure return and retention of workers.