Oil Industry Forced to Restructure Towards Renewables

If you aren’t in the know, the coronavirus is the latest and deadliest of pandemics in recent history. Not to rank but the virus’ outcomes come short of its predecessor the Spanish Flu pandemic that laid waste in the in 1918. 

However, COVID-19 comes as it’s own package with a record 2,667,682 confirmed cases and 186,266 recorded deaths. The coronavirus has earned its novelty place among the most deadly viruses in this century. 

Yet the virus comes with a vendetta of effects. These range from societal, to economic across several industries. Among social effects are reduced social interaction and minimized traveling. Consumption is also affected as customers who frequent shops from time to time are forced to sit at home while practicing social distancing. Experts looking into the matter annotate a possibility where citizen’s economic needs will outweigh their need for safety. While this outcome is a likely effect of the virus, a more prominent expectation is the changes companies will need to make to cope with such extreme shifts. 

The companies expected to have taken a significant blow from the pandemic come from the oil industry. To curb the spread of the virus, the government issued a directive to minimize all non-essential commutes. In as much as the move is beneficial, it’s adverse effects affect a broader network that includes up to 6billuon people worldwide. 

With this new directive in place, consumers are encouraged to outsource activities while remaining in isolation. The effect has also affected businesses to look for innovative ways to make ends meet. 

Among the companies taking a roll with this is oil company BP PLC. BP will have to shift it’s spending into non-fossil fuel innovation. This point has been BP’s most extended shelved project. However, in the recent outcome following the pandemic, the scene is changing. BP is investing in its research and development for renewable sources of energy. 

Yet the shift not only affects BP but the oil industry as a whole. Oil firms are moving to renewables following the pinch of the virus. Shell has plans to implement a similar strategy. While announcing on 16th April, Shell’s CEO Ben Van Beurder hinted on such a possibility. Van Beurder, however, stressed the common tricky situation ahead. He further advised investors in the industry to brace for harder times. Nevertheless, he emphasized on the need for viewing this shift as the necessary nudge towards the future.