Where next for oil & gas?

Nine forces of change that will shape the post COVID-19 recovery of Australia’s oil & gas sector

Demand for energy could look dramatically different following the COVID-19 pandemic. Oil and gas entities have been hit particularly hard by the crisis with a seismic shift in pricing and the effects of geopolitical manoeuvring.

The result? Short-term, demand-side challenges are impacting industrial and retail consumers. Extreme price volatility is likely to plague the sector for some time, while debt and capital market issues will be ongoing.

The pandemic also exposed vulnerabilities in Australia’s offshore supply chains, raising concerns over the nation’s fuel security. Meanwhile, an energy transition is underway globally. The push towards decarbonisation and environmental, social and governance (ESG) investing predates the COVID-19 crisis. However, it’s possible the pandemic has accelerated the trend towards a low-carbon economy, particularly in Europe.

On balance, costs will be key across the oil and gas sector. The path to resilience is profitable projects and cost cutting, underpinned by continuing investment in digitalisation.

PwC has explored nine forces of change that will shape the oil and gas sector. It also models two scenarios – Fortress Australia and Enterprise Australia – that show the different directions Australia’s energy sector could take as the nation begins to reboot.