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Dubai, United Arab Emirates : — Growing global diversification of the energy mix and an increased share of natural gas, renewables and electrification, is challenging conventional approaches and business models in the energy value chain. Oil rich nations have a window of opportunity to transform and be well positioned to benefit from this shifting global energy landscape, according to recent report “The Great Energy Shift”, produced by global strategic management consultants, A.T. Kearney.
Eduard Gracia, principal at A.T. Kearney said: “Market trends along the energy value chain are dramatically changing the landscape. We expect an energy market characterized by increased demand in addition to increased electrification, supply fragmentation and consumer power. This will over time lead to stabilization of energy prices and a convergence of energy markets”.
According the report, three recommendations which will support oil-rich nations and national oil companies in the region to effectively address the global disruptive changes of the energy sector – embrace renewables; leverage gas reserves and expand down the value chain.
Sean Wheeler, partner, A.T. Kearney said, “Our industry is rapidly changing. Global energy transition will lead to a broader mix of energy sources and a more fragmented supply, also in this region.”
Many of the regional oil players have already initiated projects to prepare for the great energy shift ranging from investments, into solar energy and gas, to increasing downstream oil and gas investments.
Commenting on this strategy, Rudolph Lohmeyer, vice president A.T. Kearney Global Business Policy Council said, “The Middle East enjoys an important advantage due to both its comparatively cheap hydrocarbon reserves and its geographic location. At these times of change, it is key that nations and national oil companies manage uncertainty by applying the disciplines of strategic foresight to their decision-making. This is particularly critical for a sector in which the returns on capital investment unfold over decades.”
The report concludes that oil rich nations must focus their investments on opportunities that leverage their competitive advantages, an educated workforce and the ideal geographic location.
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Additional quotes and insights:
“In a world of accelerating energy transition and cost effective new technologies, gas and renewables will become increasingly important in the global energy mix. This region is strongly positioned to tap into the gas market as well solar opportunities.” - Kurt Oswald, partner A.T. Kearney and board member of the A.T. Kearney Energy Transition Institute
“In these times, it is critical that governments work together with their national oil companies, energy players and downstream companies to define the best path ahead.” – Bob Willen, managing director, A. T. Kearney Middle East and Global Lead Partner Government and Economic Development Practice, A.T. Kearney
About A.T. Kearney
A.T. Kearney (www.atkearney.com) is a global team of forward-thinking partners that delivers immediate impact and growing advantage for its clients. We are passionate problem solvers who excel in collaborating across borders to co-create and realize elegantly simple, practical, and sustainable results. Since 1926, we have been trusted advisors on the most mission-critical issues to the world’s leading organizations across all major industries and service sectors. A.T. Kearney has more than 60 offices located in major business centers across the world. From our Middle East offices, A.T. Kearney supports both private and public sector clients as well as nations to excel and prosper by combining our regional expertise and global business insights to achieve results. For more information, visit www.middle-east.atkearney.com .
About the A.T. Kearney Energy Transition Institute
The A.T. Kearney Energy Transition Institute is a nonprofit organization. It provides leading insights on global trends in energy transition, technologies, and strategic implications for private sector businesses and public sector institutions. The Institute is dedicated to combining objective technological insights with economical perspectives to define the consequences and opportunities for decision makers in a rapidly changing energy landscape. The independence of the Institute fosters unbiased primary insights and the ability to co-create new ideas with interested sponsors and relevant stakeholders.
