Financing challenges for a transforming energy industry
5 June 2019, London

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The global energy industry faces numerous transformational changes which impact on the way it will be financed and managed. These changes offer significant growth opportunities for industry players, but also involve inherent business risks which make the sustainable financing of the industry a top priority for management.

A fundamental challenge is the increasing volatility of the whole sector in terms of demand and supply movements of traditional fuels posed by the rise of renewable energies, macro-geopolitical events, and the on-going high volatility of oil and gas commodity prices. Such volatility has elevated medium and long-term financial planning and complex capital investment decisions to the very top of managements’ agendas. Key challenges facing the sector include:

• The need to maintain sufficient investment in upstream exploration and resource development to avoid future supply shortages and to meet consumers’ needs.
• Management of the on-going transition towards a low carbon global economy.
• The need to evolve competitive markets designs for energy and CO2 in order to attract and retain capital and investors’ appetite to invest in the sector.
• The urgent requirement to embrace and finance new, and sometimes disruptive, technologies to ensure future cost, operational, environmental and market related benefits and efficiencies.
• The requirement to implement climate related policies and regulations in a timely manner.

In response to recent financial regulatory changes, activist shareholders and new policies, a number of energy banks, multi-lateral agencies and institutional investors have reduced their exposure to the traditional oil and gas sector. This trend in turn may encourage new groups of financiers such as activist investment funds, private investors and sovereign wealth funds to support the future financing of the sector.

Finance and energy industry experts will address these challenges and discuss financial solutions that will manage risks and facilitate the development of the future energy mix to meet consumers’ requirements.