The oil and gas industry, particularly the E&P and oilfield services subsectors, have faced significant headwinds over the last few years, most recently with the simultaneous demand destruction resulting from COVID-19 and supply shock from the Saudi Arabia-led price war. These recent events, combined with capital flight out of the industry and demands for capital discipline by remaining investors, have accelerated the push by company stakeholders, regulators and others for energy transition initiatives.

But the energy transition journey will take decades. The industry, as a whole, needs to strategically position itself to remain profitable in oil and gas while concurrently evolving over time to meet the demands of a lower-carbon future. Oil and gas will retain a significant role in the global energy mix, particularly for developing nations. However, in the U.S. and Europe, alternative energy sources will expand and take capital—both financial and human—with them.

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