Leaders from the “Big Four” accounting firms—Deloitte, EY, KPMG and PwC—joined Hart Energy for a deep dive on the oil and gas industry’s changing landscape following such an unprecedented first half of 2020.
Speakers in this wide-ranging discussion include:
- Katie Pavlovsky, Global Energy, Resources and Industrials Industry Leader, Deloitte;
- Deborah Byers, Partner and Americas Industry Leader, EY;
- Regina Mayor, Global and U.S. Head of Energy and Natural Resources, KPMG; and
- Niloufar Molavi, Global Energy Leader, Partner, PwC.
Editor’s note: This interview was recorded on Sept. 1, 2020. Click here for Part Two of our discussion with the “Big Four.”
Jump to a topic:
“We were already dealing with so much uncertainty ... and then you layer on the pandemic,” Byers said.
2:40—Strategies for post-pandemic
“There are lots of good things that companies have been working on for a long time that will still be relevant going forward post-pandemic and certainly post what the industry is going through,” Molavi said.
3:15—“The Great Compression”
“Deloitte is calling this the ‘Great Compression’ and what it recognizes is, in addition to low commodity prices, we’re seeing reduced demand challenges unlike ever before,” Pavlovsky said.
4:55—Energy transition opportunity
“This is an opportunity to transform and to think radically differently,” Mayor said. “There is that phrase ‘never waste a good crisis’ and, given that this is an absolutely unprecedented time, I think the successful companies are going to completely redefine themselves and what is their role going to be in the energy transition.”
“You are going to see some natural consolidation in some of the sub-sectors that is probably needed and necessary for everyone to drive the innovation [and] to what everyone is trying to get to in terms of net-zero and next-generation,” Molavi said.
9:02—Bigger M&A transactions
“The other area that is sort of a wildcard ... would be some mergers with non-traditional energy companies to really do a rapid transformation,” Byers said.
11:35—OFS consolidation need
“Talk about a segment that is ripe for consolidation,” Mayor said of the oilfield services sector (OFS) later adding “I hope that this time we see it because the industry desperately needs it to be able to deliver the returns and to more cost-effectively find and extract those natural resources.”
“There’s a tremendous growth opportunity for companies who can sustainably reduce their operating cost but balancing the flexibility to scale,” Pavlovsky said.
14:05—Different this downcycle
“I do think this time is different and they realize it ... and being able to be profitable at those low cycles and not just through headcount reductions but really looking at transformation of their business and operations in a very different way,” Molavi said of the upstream sector.
15:15—Positive changes from pandemic
“Americans love to drive,” Mayor said. “We drive three trillion miles a year ... and we didn’t in April—it was down 64%.”
“It will get better but it will look quite different and I think that’s one of the exciting things that I’m talking to clients about is,” she later added.
16:40—Peak oil versus peak demand for energy
“One thing to think about is we can have peak oil and still have increase in demand for energy. ... I think natural gas will continue to be bit of a bright spot because even though we may have entered the period of peak oil, but peak demand for energy—really, we haven’t reached that point,” Byers said.
Don’t miss Part Two of Hart Energy’s discussion with the “Big Four”
The latest discovery was made by the Mako-1 well drilled about 10 km southeast of the Liza Field.
The March 20 lease sale in the U.S. Gulf of Mexico brought in $244.3 million in high bids.
Equinor and partners are investing more than $7 billion in the development east of the Shetland Islands in the U.K. North Sea.