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Oil and gas CEOs confident despite external threats

Oil and gas executives are optimistic about company growth within the sector despite threats of cyber security and climate change.

The sentiment forms part of KPMG International’s 2019 Global CEO Outlook, which revealed that 91 per cent of business leaders in the oil and gas industry are confident about their organisation’s growth prospects.

A further 86 per cent also recorded confidence in the future growth of the industry.

The survey found that over half of CEOs in the sector projected high revenue growth of up to two per cent over the next three years, while 39 per cent predicted their revenue will surge between two to five per cent.

Despite this enthusiasm, the report also detailed the growing anxiety business leaders have regarding external threats to the industry.

The most prominent risk is associated with cyber security, according to the report, with just over half the CEOs believing that becoming a victim of a cyber-attack is only a matter of time.

More concerning for the sector, however, is the fact that over two thirds of CEOs believe their organisations are inadequately prepared for a future cyber-attack.

According to KPMG Malaysia managing partner Datuk Johan Idris, the gravity attached to the cyber security agenda is a positive indication that CEOs in the sector are serious about ensuring business resilience.

“Business leaders must remain vigilant and avoid complacency when it comes to governance in cyber space, we operate in a digital world today where breaches can happen anytime,” he said.

“Ultimately, smart leaders are those who are making cyber preparedness a board priority, stress-testing the resilience of their systems and people to withstand an attack.”

Cyber security is followed by risks caused by environmental and climate change, with 63 per cent of CEOs believing their organisational growth depends on the ability to navigate the shift to a low-carbon, clean-technology economy.

“Climate change is impacting the business landscape through economic and infrastructure damage, resource scarcity, disruption in plantation output and supply chain, and changing consumer sentiments and behaviour in support of ethical businesses,” Idris said.

Emerging and disruptive technology, territorialism and operational risk round out the other top threats CEOs see the industry facing.

Looking forward, executives believe strategic alliances with third parties is the most important strategy for achieving business growth objectives over the next three years.

The study also revealed that 64 per cent of CEOs intend to expand into emerging markets over the next three years, with North America and Asia Pacific topping the list.

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