The moment the penny dropped for Dimitri Papaefstratiou was two years ago at the annual International Petroleum Week. “It was a seminal moment,” he recalls. “For the first time, the agenda inside the event was about how the oil and gas industry could align itself with the energy transition. The industry’s most senior executives were proposing fundamental changes to their business models.

He continues: “This is not simply a moral or political discussion; the environmental, social, and corporate governance requirements many investors have introduced and the risk of newer assets becoming stranded earlier than expected in their production lifetime mean there may be real economic drivers for change. The Covid-19 pandemic has only accelerated the process.”

Papaefstratiou is a project finance partner at EY UK&I, and a senior leader of a newly established energy team with change on its mind. “The energy transition and decarbonisation are of critical importance, whichever part of the energy sector you work in. In my view, change will be far more rapid than many believe,” adds team head Charles Morrison, and it is why the team is now developing a future energy practice to sit alongside its more traditional power and oil and gas services.

Papaefstratiou, Charles Morrison (partner, EY UK&I) and Simon Collier (associate partner, EY UK&I), joined EY this year, to accelerate the pace of change in a transitioning sector.

We benefited from fairly substantial market recognition both on a team basis and individually,” Morrison says. He adds, “part of our thinking behind the move was precisely around this narrative of change. I felt the legal industry had been slow to react and clients were looking for a different approach. EY as an organisation that is at the vanguard of change in the energy sector. Sitting alongside colleagues with experience in financial advisory, infrastructure finance, M&A advisory, tax and accounting, the legal team now has an attractive offering: an integrated service of energy sector professionals.

There are differences of view about how fast the energy transition will come. Papaefstratiou declares himself on “the bullish side of the spectrum.” He describes a “perfect storm of uncertainty” caused by a combination of changes in the pricing of hydrocarbons and the market availability of them, along with technological change, the energy transition, awareness and the increasing need to actively respond to climate change, Brexit, COVID-19 pandemic and more. Collier strikes a more cautious tone.

“Increasing use of renewables and electrification is helpful,” Collier adds. “But even with ambitious policies being adopted by governments around the world, there are challenges in decarbonising industries such as petrochemicals, haulage, aviation and shipping. And we also have to acknowledge the likelihood of a significant increase in energy demand from a growing global population seeking increased prosperity. I think the marginal gains that can be made through energy efficiency and changes in consumer behaviour, as we have seen with single use plastics, may also be critical if we are to meet the Paris Agreement goals.”

Papaefstratiou gives an example of an oil and gas client in an emerging market which disposed of its entire legacy business. What drove the decision was a visit to a gigafactory and car manufacturing facilities in America. “They saw, in what was happening there in terms of technology, the potential demise of their business – maybe not today or tomorrow, or in five years, but in some time in the future and that threat was sufficient to ultimately drive them to change their business today.”

Papaefstratiou concludes: “Every day I see the clients we interact with taking a completely different approach to philosophical questions about the way they conduct their business, and how and where they make their profit. The worldview of the client base that we serve has changed significantly, therefore the type of work we do for EY clients, and certain assumptions we always made, have changed as well.”

Collier finishes: “It is a very complex equation for us. We are part of an organisation that allows us access to thought leaders on the technical and commercial aspects of the energy sector, whilst we provide the leading legal advice – it is a great platform for our services.”