Digitization and electrification are spreading across all industries and the auto industry is no exception. As charging technology for electric vehicles (EVs) gradually takes reins from the internal combustion engine as the king of the road in the rapidly evolving energy landscape, oil and gas companies are acknowledging the rise of EVs, observes leading data and analytics company GlobalData.
The company's latest report, ‘Electric vehicles in oil & gas,' reveals that due to a combination of factors such as growing environmental awareness and improvements in battery technology, oil and gas companies are gearing up for the EV onslaught by contributing to the development of battery technology and deployment of EV charging points.
Ravindra Puranik, Oil and Gas Analyst at GlobalData, says: “As fossil fuels are chief sources of greenhouse gas emissions, environmentalists worldwide have lobbied time and again for their usage to be reduced through mandates on fuel efficiencies and imposition of stringent vehicular emission norms. With improvements in battery technology the costs of batteries, and in turn, EVs are coming down and becoming more viable options for ICE-based vehicles. This has encouraged select countries around the world to begin the process of phasing-out of gasoline-powered vehicles.”
As a result, in their bid to function on a different playing field and compete with tech-savvy counterparts, oil and gas companies are diversifying into power generation and battery manufacturing, two areas where demand is set to increase with the growing adoption of EVs.
For example, Norwegian oil company Statoil dropped ‘oil' in its name and rebranded itself as ‘Equinor' in an effort to diversify beyond oil and gas business mainly into renewable energy projects, to reduce its carbon footprint and appear more relevant in these evolving energy dynamics.
GlobalData's thematic research identifies Royal Dutch Shell, BP, Total and Repsol as some of the key companies at the forefront of the deployment of EV technology over the next two to five years.
Puranik concludes: “EVs consume more power than a typical household, hence the addition of each EV would drive the power demand significantly. This has prompted oil and gas companies to partner with or acquire utility companies to expand their electricity generation capabilities beyond captive power.”