The increasing intensity of the global climate change lobby is making no earth-shaking difference to universal oil demand as concerns over energy reliability trigger a strong surge of global interest in demand for fossil fuel-based energy according to a recent study undertaken by the world-renowned Norway-based energy research entity, Rystaad Energy. Wedded to the findings of the high- profile company, however, is the revelation that the surge in demand will be strictly temporary and that service companies need to ‘jump in’ and capitalize now since it not be long before the global focus on energy transition begins to assert itself again.
Asserting that the energy transition is by no means “slowing down”, Rystaad is asserting that ‘service companies should “make the most of this upturn now, while keeping one eye firmly on the future.”’ Rystaad noted in its assessment that following Russia’s invasion of Ukraine, investments in fossil fuels in 2022 and 2023 surged by US$140 billion. However, the energy research company points out that some of the manifestations in the spike in investments meant that expected spending had swollen to almost US$1.1 trillion. Rystaad’s Head of Supply Chain Research Audun Martinsen, is quoted as saying that, “huge waves of investments in renewables and clean tech are on the horizon.” He adds that in order to ensure the long-term success of these investments in renewables, “service companies should adapt their offerings now to capitalize fully on the inevitable green revolution.”
Rystaad notes that last year’s sudden upsurge in energy demand triggered a greater need for increased upstream activity that elicited the demand for more equipment, including more rigs to meet expanded demand. One consequence of this surge in demand, Rystaad says, was a hike in service and equipment prices. The company notes, however, that while the first wave of extra spending over the past fifteen months went mostly to oil and gas as low-carbon industries were confronted with a slowdown in operations on account of high inflation and shortages in the supply chain, the industry should anticipate a resurgence of low-carbon spending since, Rystaad’s findings argue, that “energy security is not only about securing oil and gas here and now but also about securing cleaner energy for the future.”
