Financing the future energy landscape

Industry subsectors and energy alternatives

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Private equity invests across the oil and gas industry, but our survey reveals distinctions among the four industry subsectors (upstream, midstream, downstream and oilfield services).

In the upstream subsector, the largest driver of PE activity is the sheer abundance of attractive investment targets.

In the other three subsectors, the primary driver is the potential for consistent and predictable returns. Unsurprisingly, this certainty is much less important for the inherently unpredictable upstream business.

The primary drivers by industry subsectors

EY chart showing primary drivers by industry subsectors

The need for significant capital is also a strong driver of activity in the upstream and downstream subsectors. For oilfield services and the midstream, reduced exposure to volatile commodity prices is more important.

Energy alternatives

Nearly all (86%) survey respondents say they are also pursuing other energy options.

Of these alternatives, renewable energy was the top response (67%), followed closely by power and utilities (56%).

Petrochemicals/chemicals (27%) and mining (11%) were noted much less frequently.

The primary drivers by industry subsectors