The global energy sector has been hitting unchartered territories as COVID-19 demand destruction, economic downturn and overproduction hit the market from all sides. The unexpected May 2020 WTI negative oil futures crisis, combined with continuing demand destruction and possible peak-demand scenarios, has shook the hydrocarbon sector in its fundamentals. At the same time, renewables energy is not yet out of the doldrums itself.
With continuing economic downturn, and possible 1930s economic fallout scenarios in place, questions are being raised on the future of hydrocarbon and renewables sector developments and investments the coming years. Without knowing the full impact of the current crisis, especially on the demand and manufacturing side, energy futures are heading for a perfect storm. IOCs and NOCs will have to reassess their futures, as private investors, institutionals and governments will be hesitant to continue the former investment sprees. Negative prices have shook the sector, but a real knock-out is not there.
The future of renewables and hydrocarbon will not only depend on political views and activism, but also on commercial factors, ROIs and price levels. The new normal could be a more strong equilibrium between both sides, as a full scale focus on one sector only will be having a detrimental effect on all. It seems that renewables will be leading OECD investments, diminishing the role of IOCs, while hydrocarbon will become a power play of national hydrocarbon giants or non-OECD Sovereign Wealth Funds.
- From negative oil and power prices to a new normal? How to get there, market or government driven?
- Restructuring of energy markets the coming decade doesn’t mean end of hydrocarbons
- Economic downturn to decide OECD energy investment future
- Renewables to lead OECD, hydrocarbons to be NOCs based
- COVID-19 watershed in leading hydrocarbon media exposure? From energy to products?
- Total restructuring energy sector to decide new geopolitical power constellation…How to deal with negative prices and power levels?
- The end of IOCs, after Shell’s dividend announcement, opens door for new reality?
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Leon Stille, General Manager EDI, has a background in Earth Sciences (BSc) and renewable energy technology (MSc) from the University of Utrecht. From the start of his career he has focused on conventional and renewable energy technology development and education. He has held commercial roles in several energy companies such as the Dutch gas grid operator Alliander and international oil & gas company Frames. Furthermore, he worked for Netherlands Organisation for applied scientific research (TNO) as business development manager dedicated to enabling and accelerating the energy transition.
Dr. Cyril WiddershovenCo-owner of Dutch consultancy VEROCY
Dr. Cyril Widdershoven is a long-time observer of the global energy market. Presently, he holds several advisory positions with international think tanks in the Middle East and energy sectors in the Netherlands, the United Kingdom, and the United States.
He earned his post graduate degrees at King’s College, University of London, Department of War Studies, and an MA in Middle East Studies at the University of Nijmegen, the Netherlands. The main focus of his work has been on geopolitical risks, terrorism, fundamentalism and military/defense related issues in the MENA region. At the same time, due to consulting work and advisory, he has become involved in the oil, gas and energy sectors in the region and Africa.
He held several senior publishing positions in leading energy publications such as Afroil, Middle East Oil and Gas, and North Africa Oil and Gas Magazine Cairo, and he continues to oversee the Mediterranean Energy Political Risk Consultancy. Dr. Widdershoven worked on M&A operations in Egypt, Libya, Sudan, and Iran, he studied the pipeline operations in Libya, Algeria, Nigeria and Turkey, and he assessed risk for institutional investors and banks in Libya, Egypt, Saudi Arabia, Oman and Iraq, all while advising the Dutch government and international organizations on related issues.