The energy industry is adapting fast to keep up with the changing times. The impact of climate change and various other environmental factors has not gone unnoticed by the energy sectors. Key players in the energy sector are cognizant of the imminent shift from non-renewable sources to renewable ones.
The existing energy infrastructure can play a key role in helping with this energy transition. The goal of many of the largest oil and gas producers is to assist with a smooth shift to renewable energy sources. The existing supply chain for energy products that has been built can work effectively to improve efficiency through collaboration between various players in the market.
Here are five key ways oil and gas companies can assist with supply chain and energy transition.
1. Investment of Capital Required for Transition
Oil and gas companies realise that the future of energy lies in renewable sources, but providing energy through renewable sources is not a cheap endeavor. The newer renewables companies will require major investments from established players to get off the ground. Hence, investments from oil and gas companies in the sector can be key to a renewable future.
The largest oil and gas producers can boast of large revenues through their operations. These companies control the world’s energy supply and are in a position to invest large amounts of capital when required.
These companies are in the enviable position of being able to pivot smoothly from their non-renewable business into a renewable one. They have the necessary capital to invest in new sustainable ventures that can power the world in the future.
2. Reimagining Existing Supply Chains
Supply chains for energy products already exist around the world. These supply chains have been built up over decades of cooperation between countries and multi-national companies. One of the principal deterrents to an energy transition is the availability of supply chains that can carry renewable-source energy to end consumers.
As a logistics provider to energy companies, Aramex understands that existing supply chains can be reimagined to support the needs of renewable energy producers. As a result, there is no need to build new supply chains from scratch as they can leverage the existing ones around the world to build a sustainable and efficient network for the movement of energy products.
3. Providing the Necessary Know-How
Existing energy players have a key advantage over new entrants in the market: they understand the energy industry better through decades of experience. These companies have valuable experience to share, which could play a key role in the upcoming energy transition.
Existing energy players have the necessary know-how required to navigate the nitty-gritties of the energy market; the ever-changing price movements, negotiating cross-border trade, using efficient management techniques, acquiring finances for energy products, and so much more.
As the ongoing energy transition picks up steam, the experience of existing players in the market may determine which ventures are successful and which fail.
4. Leveraging Existing Networks
Doing business is about people. Existing oil and gas producers know all the key players in the existing energy market. This network, which has been built up over decades, will offer oil and gas players the necessary connections to implement an energy transition smoothly and relatively without hassle.
New energy players in the market must connect with the existing energy companies to leverage their global networks. A new company without support may take decades to build the same kind of network, while those with the support of existing players can do this much faster.
5. Offshore Installation and Operations
Similar to non-renewable sources, a large number of renewable projects also need to be built offshore. Not only can wind and solar power both be harvested offshore, it is more efficient to do so.
Oil and gas producers already have a wealth of experience in managing and implementing offshore projects. Hence, they are in a position to play a key role in the ongoing energy transition.
The oil and gas sector is in the best position to leverage existing supply chains and know-how to facilitate the ongoing energy transition. Rather than bet on the ways of the past, they can participate in and build the energy infrastructure of the future.