Energy intelligence drives industry transformation

Wood Mackenzie After years of cautious sentiment, a renewed confidence in the longer-term outlook for oil and gas was evident as the global energy industry convened in Abu Dhabi for ADIPEC 2025 – the world’s largest energy conference.

IOCs and NOCs discussed building portfolio resilience for the long term, while anticipating near-term price volatility. The message was consistent from a range of industry leaders and ministers: oil demand will continue growing well into the next decade, perhaps beyond. There has been a fundamental shift in the mindset, from “energy transition” to “energy addition”. The expectation now among the participants at ADIPEC is that renewables and other low-carbon sources will add to global energy supplies, rather than replacing fossil fuels. The implication for upstream companies is clear: they need to be positioning themselves strategically for the 2030s, while navigating potential turbulence over the next few years.

AI transforms energy dynamics

Artificial intelligence has moved from being a peripheral technology to being a central driver of the world’s largest economies within just three years. Conference discussions highlighted AI’s dual impact: sharply increasing power demand through data centre expansion, while enhancing operational performance across the energy value chain.

Gas-fired power generation has emerged as a primary solution for meeting data centres’ power demand, particularly in the US. However, supply chain constraints present significant challenges. Gas turbine delivery times have stretched to three to five years, and regulatory frameworks are struggling under the need for rapid deployment. Carbon capture technology for new gas plants remains low on the agenda for now, but could be vital for tackling emissions in the 2030s and beyond.

Industry perspectives diverge on the sustainability of AI-driven energy demand. Some energy executives question growth prospects beyond the current data centre build-out, wondering whether chip efficiency advances will dampen demand. However, the tech industry sees a new wave of demand growth coming. Digital AI is expected to segue into “physical AI”, with robotics driving the next fundamental shift.

Infrastructure investment imperative

Grid modernisation is essential to build the foundations of tomorrow’s energy system. Wood Mackenzie forecasts indicate that grid infrastructure, including EV charging, will account for more than 25% of total future investment in the energy and natural resources sectors through 2060. Conference participants emphasised that regulation must incentivise rather than derail investment.

Ultimately, data centres will be built where the power is cheap, and that is currently a competitive advantage for the US. However, with demand outpacing supply and strains on the supply chain, US power prices are already moving higher. Wood Mackenzie predicted in January that rising electricity prices could emerge as a political hot potato, and industry leaders highlighted the issue on stage at ADIPEC.

Strategic outlook

ADIPEC 2025 showcased a sector at a time of dramatic change. Success in this new world will depend on industry leaders’ ability to embrace the opportunities offered by AI, meet growing demand for energy, and make progress on decarbonisation, while maintaining capital discipline and delivering investor returns. This is the most complex and potentially the most volatile time for energy in the lifetimes of anyone in the industry today. It is also the most exciting.