Research by technical adviser DNV GL found that two-thirds (66 per cent) of senior oil and gas professionals are confident that the sector will improve in 2020, a drop of ten percentage points from a year earlier.
Industry insiders reported uncertainty around the oil price and global economic conditions as the top barriers to growth.
However, despite volatile market conditions, the study recorded a sharp rise in those expecting to boost or maintain investment in decarbonisation, with 71 per cent intending to back the energy transition, up from 54 per cent in 2019.
DNV GL also found that companies investing in increasing efficiency and decarbonisation have the most optimistic outlook for the year ahead.
The industry’s intention to invest in the hydrogen economy – where power is produced from electrolysis and renewables, or from natural gas combined with carbon capture and storage – has more than doubled since last year, at 42 per cent.
Meanwhile, 44 per cent intend to pump funds into renewable energy sources, with offshore wind proving the most popular choice.
Almost two-thirds (64 per cent) expect their organisation will hit profit targets this year and nearly half (46 per cent) said their company would still achieve “acceptable” annual earnings if the oil price were to average less than $50 per barrel.
Liv Hovem, chief executive of DNV GL’s oil and gas arm, said: “While the industry is experiencing persistent uncertainty, growing complexity, and new risks, we also see an industry taking bold decisions, building greater efficiencies and rising to long-term challenges as the world pivots towards a lower carbon energy future.
“Our research shows that the oil and gas industry has placed decarbonisation at the centre of its agenda, and it will remain a priority despite uncertainty from volatile market conditions and stalling expectations for industry growth in 2020.
“More and more people in our sector are realising that we cannot sit and wait for the perfect solution to jump to a completely decarbonised energy system.
“The industry will emit too much CO2 in the meantime, so we have to start working on decarbonising the oil and gas sector with the technologies we have already in order to meet national and international climate goals.”
DNV GL’s outlook report is based on a survey of more than 1,000 senior oil and gas professionals and in-depth interviews with industry executives.