TPT July 2018

G LOBA L MARKE T P L AC E

G LOBA L MARKE T P L AC E

• April 2016: Laclede Gas became Spire • April 2015: GDF Suez (GDF is short for Gaz de France) became Engie • April 2015: Neste Oil became Neste Burrowing deeper into his topic, Mr Rathi pointed out that oil and gas companies, though still largely dependent on their core products, are increasingly looking to diversify their businesses. He wrote, “The rapid growth in renewable energy, the growing challenge of climate change, and the pressure from governments to cut emissions from fossil fuels are driving many of these changes.” G oing beyond diversification The evidence for this is plentiful. In 2017, Shell bought First Utility, a British electricity supplier, and NewMotion, a supplier of chargers for electric vehicles. The same year, BP bought a controlling stake in Lightsource, a solar company. In April of this year, Total bought Direct Energie, a French electricity supplier. And some companies have not stopped at diversification but in fact have transitioned out of their original businesses altogether. DONG sold all of its oil and gas interests before rebranding as Ørsted and focusing exclusively on green energy. (According to Quartz , “The family of 19 th -century scientist Hans Christian Ørsted wasn’t happy about it.”) Mr Rathi observed that the current wave of oil companies “trying to rebrand away from their roots” is not the first. BP (née British Petroleum) in 2001 tried out a new, greener marketing slogan – “Beyond Petroleum” – before walking it back. When Standard Oil was split in the early 20 th century, it mostly created companies with neither oil nor gas in their names: Exxon, Mobil, Chevron, Texaco, Amoco and Sohio. › That said, Mr Rathi wrote, most large state-owned oil groups do not seem to feel the same pressure as privately owned companies to dissociate themselves from oil, gas or petroleum. Here, again, he provided a list, this time of proudly oil/gas companies, together with their 2017 revenues (in billions of US dollars) which interested readers will no doubt wish to compare with the results achieved by the name- changers: China National Petroleum............................................. 428.62 PetroChina.................................................................... 367.98 Kuwait Petroleum.......................................................... 251.94 Lukoil............................................................................. 144.17 Petrobras........................................................................... 130 National Iranian Oil............................................................ 110 Gazprom......................................................................... 106.3 Petronas........................................................................ 100.74 China National Offshore Oil............................................ 98.53 Marathon Petroleum....................................................... 97.81

Oi l and gas What’s in a name? If ‘Oil’ or ‘Gas’ or ‘Petroleum’, many companies in the business have decided it must go

On 16 May, Norwegian oil giant Statoil officially rebranded itself Equinor. A reporter for Quartz in London, Akshat Rathi, wondered why. As it happens, Reuters had already put the question to Statoil whose CEO, Eldar Saetre, provided the answer: “A name with oil as a component would increasingly be a disadvantage. None of our competitors has that.” In Mr Saetre’s opinion the old name had served Statoil “really well” for 50 years, but in his view it would not be the best name for the next 50 years. As Equinor, he said, the company would attract young talent likely to be more interested in Statoil’s activities in renewable energy than in its legacy in fossil fuels. (“Oil and Gas Companies Don’t Want ‘Oil’ or ‘Gas’ in Their Names,” 16 May) Mr Rathi pointed out that the Statoil/Equinor chief is right on one score, at least. Many of the company’s biggest competitors tend not to feature oil, gas or petroleum in their names. He compiled the following list of companies with oil- free names, together with their 2017 revenues (in billions of US dollars): Saudi Aramco. .............................................................. 455.49 Sinopec.............................................................................. 448 ExxonMobil..................................................................... 268.9 Royal Dutch Shell.............................................................. 265 BP................................................................................... 222.8 Total................................................................................... 212 Eni................................................................................. 131.82 Valero Energy............................................................... 130.84 Chevron.......................................................................... 129.9 Pemex............................................................................. 117.5 “Statoil’s change of heart also reflects a wider industry trend,” wrote Mr Rathi, who identified a number of instances of energy companies dropping oil, gas and petroleum from their names: • Oct 2017: Danish Oil and Gas (DONG) became Ørsted • July 2017: Canadian International Oil Corp became Hammerhead Resources • June 2017: Penn West Petroleum became Obsidian Energy • May 2017: Painted Pony Petroleum became Painted Pony Energy • April 2017: Mobil Oil Nigeria became 11 plc

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JULY 2018