The Federal Government has released its first offshore petroleum exploration permits, ensuring growth in the oil and gas sector at a time when it is seeking to boost its climate change credentials. The government’s divergent approach is symptomatic of a dilemma facing investors in the energy market — which way to play the energy crisis. On the one hand, Russia’s invasion of Ukraine, along with the global post-COVID-19 economic recovery have sent energy prices — especially for gas and coal — soaring and will likely keep them high for some time.
This can be expected to ensure bumper profits for Australia’s two main ASX-listed oil and gas companies — Woodside Energy Group (ASX:WDS) and Santos (ASX:STO) — making them an attractive prospect for traders and investors. Increased profits in the oil and gas sector are due to the rise in global oil prices, creating windfall profits that could never have been generated by increased operational efficiency. On the other hand, as concerns about climate change drive the world toward a lower-carbon future, there are legitimate doubts about the future demand for oil and gas.
The rest of this article can be found at investordaily.com.au.