PwC has identified several challenges that energy executives must navigate, including geopolitical shifts, government initiatives, and a focus on energy security and sustainability. The energy sector is also experiencing a wave of mergers and acquisitions (M&A), with strategic buyers streamlining operations and honing core competencies to enhance financial performance.
One subsector that is seeing ongoing consolidation is mining and minerals, with deals aimed at securing critical supplies such as nickel, cobalt, and graphite to support the growing demand for solar panels, batteries for storage, and electric vehicles (EVs). Investments in recycling are also expected to play a significant role in the sector.
Geopolitical tensions and uncertainty around OPEC+ production cuts are likely to influence oil prices, with conflicts in Europe and the Middle East adding further risks to oil supplies. However, the report predicts a surge in oil and gas M&A under the new Trump administration, alongside continued investments in renewable energy as data centers drive up energy demand.
By 2025, the energy sector is expected to see record oil production, with the US potentially increasing energy production through expanded drilling, reduced regulation, and scaled-back renewable energy initiatives. Strategic buyers are also expected to dominate the midstream sector, with LNG poised for growth as the anticipated end to the LNG permit pause could unlock significant M&A activity and infrastructure investments.
Despite a focus on traditional energy sources, the US is adopting a diversified strategy to meet growing demand, driven by data centers. This includes investments in oil, natural gas, nuclear, coal, and renewables. The PwC report highlights the potential for significant changes in the energy sector in the coming years, with implications for both traditional and renewable energy sources.