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Oil and gas sector needs to acknowledge risk factors

KUWAIT: Even as the global oil and gas sector looks at a full positive recovery with pre-pandemic prices, it is undeniable, even to the most undiscerning of observers, that oil and gas countries need to include sustainable environmental practices in the production of crude oil and also lead the global efforts to achieve a net zero future. The industry also has to take into consideration other risk factors such as the fairly unfenced and dangerous world of cybercrime, the unethical practices associated with industry supplies and a more elaborate investment pledged to support its employees and their communities.

Kuwait, which is a pioneer in leading the industry’s conversation globally need to also acknowledge and act on these initiatives to sustain industrial growth as well as reduce the supply-chain and talent pool uncertainties that currently shadow the industry. Kuwait Oil Company (KOC) recently announced, in its 2040 strategy, its commitment to use sustainable practices in the production of oil. While this has been a commendable effort, more needs to be done to stay ahead of the industrial challenges regionally and globally and to relieve the obvious tautness that is seen in the industry.

A detailed sector report published in KPMG’s Drilling Down magazine outlines several upcoming risk factors that stand to impact the oil and gas sector for the year 2022 and beyond. A primary risk priority, according to the article, is the geopolitical tension in Europe that has triggered US and EU economic sanctions, which in turn, has not only affected European gas supplies, but has also dampened the European efforts at initiating ‘green policies’ as the EU shifts its focus to tackle the socio-political challenges in the region.

The report also highlighted that the oil and gas sector has to weigh its traditional employment practices, to incorporate more flexible working methods and be agile enough to catch speed with changes happening in work styles across other sectors in the world.

Citing the Brunel International Oil and Gas Job Search, Energy Outlook Report 2021-2022, the report quotes that 43 percent of its surveyed energy workers have plans to leave the industry within the next five years, while 56 percent of the current workforce in the sector are looking at making a shift to renewables organizations – a reason why the industry has to not only look at flexible working models, but also prioritize a value system that is in alignment with employment needs. While the oil sector fundamentally has a risk of volatility associated with external factors, smoothening out some of the known risks will help make the ride less bumpy, a fact that stands true for Kuwait as well.

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