The drop in oil demand due to the coronavirus pandemic will likely continue in 2021, which could represent deal opportunities in the sector, as companies seek to receive cash flow returns quicker, says a PwC 2021 sector outlook report.

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Deal activity will be driven by companies prioritizing certain assets in their portfolios and deciding whether to buy rather than build to gain technology capabilities, scale and operational efficiencies.

Businesses that offer digital and remote services will also be valued. For example, BV Investment Partners-backed GeoLogic Systems has acquired SubsurfaceIO, a digital technology provider for the oil and gas industry, as the need for data analytics in the energy sector is increasing. Lower-carbon energy policy could drive hydrocarbon divestments and enabling technology opportunities.