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As Global OFS Industry Turns to Renewables, U.S. Service Providers Should Look to Africa

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As the global oilfield services market continues to face a reduction in activity due to COVID-19, early estimates suggest that service providers could recoup up to 40% of their revenues by diversifying from oil and gas operations and shifting toward fast-growing renewable markets. According to recent data released by Rystad Energy, service companies may be doing just that, as opportunities associated with the clean energy transition are accounting for a higher proportion of deal-making activity within the oilfield equipment and services (OFS) sector. In 2021, 20% of deals initiated by OFS companies involved a target company with operations in renewables energy, a significant jump from just five percent between 2017 and 2020.

For U.S. service companies, diversifying core operations beyond oil and gas has become a top priority. Last month, American services giant Baker Hughes released its corporate strategy for achieving net-zero carbon emissions across Scopes 1 and 2 by 2050, establishing a framework for facilitating a company-wide energy transition and advancing research and development of low-carbon technologies. In June, Houston-based Schlumberger announced its commitment to achieving net-zero emissions by 2050 and targeting a 30% reduction by 2025. In February, McDermott International’s CB&I Storage Solutions business was awarded a contract for the engineering, procurement and construction of a power-to-gas facility, which uses solar power to produce green hydrogen for injection into an existing natural gas distribution network.

Meanwhile, sub-Saharan Africa is ripe with opportunity for the application of these specialized technologies and for traditional oilfield service suppliers that are looking to shift toward a carbon-free future. Clean energy infrastructure is one such opportunity, whereby service providers can support the development of blue and green hydrogen infrastructure, carbon capture and storage (CCS) and energy storage at-large. South Africa’s domestic green hydrogen market, for example, has been valued at approximately $10 billion per year, supported by rising energy demand from mining, minerals, steel, transport and petrochemicals sectors. As the largest emitter of greenhouse gases on the continent, the country has already started geological mapping of its first CCS site that will store large quantities of carbon dioxide in deep underground reservoirs from 2023.

The African continent also represents a growing market for large-scale renewables, via the development of solar photovoltaic plants, off- and onshore wind parks and geothermal energy, in which engineering houses, fabricators and equipment manufacturers are in high demand. Finally, U.S. service companies are well-positioned to supply integrated digital solutions for existing African oil and gas projects, implementing technology-driven approaches that maximize operational efficiencies while minimizing the ecological footprint. French-American services provider TechnipFMC, for example, was awarded a significant integrated Engineering, Procurement, Construction and Installation contract in July for Tullow Oil’s Jubilee South East development offshore Ghana. At the pre-tendering stage, TechnipFMC leveraged its Subsea Studio digital solutions to offer a range of tools that enhance performance and reduce carbon emissions across a project’s life cycle.

Within the OFS sector, contractors providing maintenance, engineering, procurement, construction and installation services are expected to be able to adapt to low-carbon business streams more easily than, say, fracking, OCTG, drilling and well-related equipment and services. The SURF market is also anticipated to be relatively agile, as the market for subsea cables and pipelines applies to both deepwater oil and gas operations and floating and grounded offshore wind – the latter of which represents one of the fastest-growing renewable energy segments. In short, services that apply to both traditional oil and gas operations and innovative clean energy infrastructure and production will be best suited to the diverse range of activities taking place on the African continent and globally.

Energy Capital & Power (ECP) – in partnership with the African Energy Chamber’s U.S.-Africa Committee – invites U.S. companies, investors and organizations to participate in the first-ever U.S.-Africa Energy Forum (USAEF) (December 9-10, 2021, Houston, Texas), introducing American companies to African opportunities. To learn more about how U.S. firms can advance the agenda of sustainable, long-term investment in African energy, please visit To sponsor, speak or attend USAEF 2021, please contact Senior Director James Chester at [email protected]

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Grace Goodrich

Grace Goodrich

Grace Goodrich is a Publications Editor at Energy Capital & Power, where she writes about the intersection of energy, policy and global finance in sub-Saharan Africa's fastest-growing economies. Grace produces our Africa Energy Series investment reports in Angola and Equatorial Guinea (2019), as well as co-authored African Energy Chamber: Road to Recovery (2021).