According to the report, based on a survey of more than 1,000 senior oil and gas professionals, a record 66% say that their organisation is actively adapting to a less carbon-intensive energy mix in 2021, up from 44% in 2018.

While some 57% plan to increase investment in renewables, up from 44% last year, almost half expect to increase investment in green or decarbonised gas.

The report also reveals that the majority of senior oil and gas professionals expect these shifts in investment to lead to a wider reshaping of the industry. Eight-in-ten believe there will be increased industry consolidation in the year ahead, with 63% expecting more demergers, divestments, and spin-offs.

Only 39% are confident for oil and gas industry growth in 2021, down from 66% last year, and 76% in 2019.

Only 21% say they plan to increase oil project investment in 2021, as the sector is coming to terms with the notion that the world’s demand for oil has peaked or will peak in the short to medium term. In comparison, an increase in natural gas investment remains steady at 37%.

DNV GL Group president and CEO Remi Eriksen said: “Net-zero climate policies began to proliferate in 2020, from Europe to China, and made it onto the table in the US. Long term net-zero policies have the potential to drive deep decarbonisation of the world’s energy system, and they are already changing the direction of the oil and gas industry.”

How does the industry react to the Covid-19 downturn?

The report suggests that priorities are shifting as investors reassess the risks of financing oil and gas projects, and as governments and industry invest billions into green recovery strategies following the Covid-19 pandemic.

The research points out that the oil and gas industry is moving through its third major downturn in 12 years, but the outlook for 2021 is influenced by the possibility that this downturn may be different from those of the past, shifting capital away from fossil fuels.

DNV GL vice president Hans Kristian Danielsen said: “The trouble with the industry’s available cost-efficiency levers is that most of them have been pulled quite hard already.

“Cost efficiency has been an uninterrupted priority in each of the past seven years. For some, it is getting harder to squeeze any more water from the sponge.”

Significantly, the oil and gas industry is not hitting the brakes as hard as it did after the downturn in 2014. While the proportion of respondents expecting to maintain or increase capex in the year ahead has fallen to 62%, down from 72% going into 2020; this is much higher than the 43% recorded following the last downturn.

“Companies are betting long term when making transformational investments, aiming to navigate the multiple transitions taking place at different speeds around the world. While we see a crash in confidence for industry growth in 2021, we see growing confidence in the opportunities that lie in a decarbonised future,” Danielsen said.