The global energy supply chain has been hindered by political and policy uncertainties over the past year. High costs and insufficient government support, including lack of financial assistance and unfavourable tax environments are major deterrents.

This is according to the eighth annual “Survive and Thrive” report, published by the Energy Industries Council (EIC), featuring insights from 134 companies (40% more than last year).

“2024 sees a shift from boom times to an environment filled with uncertainty as companies grapple with increased policy and geopolitical challenges,” says Stuart Broadley, CEO of the EIC.

“While opportunities abound, lack of clarity on financial incentives and regulations makes navigating these waters complex. This year, we’re seeing a mixed picture. While activity across the energy supply chain remains high, companies face significant hurdles due to policy uncertainties. This is a critical time for the industry.”

Development of new export or international regions remains the least used growth strategy. Only 7% of companies are venturing into new markets. The majority focus on domestic or well-trodden overseas markets like North America, Europe and the Middle East, according to the report.

Clear policies and trade agreements are essential to make new market entries more feasible, say supply chain businesses in the report.

“Exporting to new markets remains the most difficult growth strategy. Government support, with fewer exclusions around oil and gas, is crucial for companies to navigate new territories – many of which also have important hydrocarbon activities in transition. Our members are asking for more engagement from trade missions and embassies to provide necessary market access and early clarity on new market challenges such as local content needs,” says Broadley.

Persistent challenges, such as payment delays of six months or more, create severe cash flow issues, hindering investment in new technologies and expansion efforts, the report states. “Without unfettered export finance help, the working capital challenges alone are normally enough to dissuade companies from entering new markets.”

Developing client-facing services and solutions has emerged as the most popular growth strategy this year – 82% of supply chain companies are working directly with operators, increasingly sidestepping the traditional model of contracting via tier 1 EPC contractors, the report states.