MGA’s 1^st Industry Talk for 2021 Discussed Global Energy & Impact from President Biden’s Energy Plans

The 1^st edition of #MGAIndustryTalk, exclusive for MGA members and invited guests, was successfully held virtually on 9 February 2021.  The audience was welcome by the Emcee, Nabilah Zulkefli from MGA and this was followed with an Opening Remarks from Hazli Sham Kassim, President of MGA.  The event featured the keynote presentation by Prof. Renato Lima de Oliveira, an Assistant Professor of Business and Society at Asia School of Business (ASB). He is also a research affiliate of MIT and a fellow at IDEAS Malaysia.  The first of MGA bi-monthly industry talk series for 2021 ended with a captivating and interactive Q&A session moderated by Rosman Hamzah, the Secretary General of MGA.  The participation from the audience was so overwhelming that the Q&A sesion went into extra time in order to enable Prof Renato to respond to most of the questions.

During the one hour webinar, Prof. Renato had comprehensively analysed the following topics:

1. The short and long-term factors affecting the O&G industry;
2. Insights of Covid-19 impacts on the energy sector,
3. Even after Covid-19 has wreaked dramatic on almost everything else, renewable energy recent developments show a surging growth;
4. And the growing trend of companies committing to Net-zero carbon emissions agenda;
5. An overview of the recent administration change in the U.S. and expectations from President Biden’s energy plans.

Prof. Renato concluded his presentation with the following Five (5) key takeaways:

1. The energy market is constantly changing due to Covid-19 impacts, advances in technology, access to energy financial funding and a broader policy and support will be fundamental for the energy industry.    Two potential long-term implications of the Covid-19 on energy markets are, work from home as “a new normal” and the break-up of global supply chains leading to lower and more volatile prices.
2. The oil and gas industry has had a particularly hard year, but oil and gas market prices are over the crisis’s worst.  In a short run, energy market can change if OPEC decides to increase production CAPEX for long lead time projects such as the deep offshore, which is likely to take longer than it did in the wake of the Covid-19 pandemic recovery. With the energy market being more volatile than ever, the short-cycle projects will be safer bets, but there are not many.
3. The change is coming, the renewables gained momentum in 2020 due to its long-term supply contracts, and policy mandates insulated the sector.  Besides that, the Net-zero pledges accelerated and now include even O&G companies.
4. In Green energy will now have an ally in the White House.  It will be critical to compensate the losers of climate change for policies to get broad support and have continuity.
5. One of the remarkable research agenda is the implications of the energy transition to Malaysia. How can companies do a smooth transition and how can governments become less dependent on O&G revenues.