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ENERGY COMPASS: Big Oil rebrands itself

ENERGY COMPASS: Big Oil rebrands itself

“Despite oil companies’ record as an engine of economic growth and their massive investments in cleaner fuels, recent polls across the US suggest most Americans still regard them as greedy, faceless multinationals that don’t give a fig about the environment or the societies in which they operate.”: “Shell highlights the cleaner nature of its burgeoning LNG business…”

Published by www.energyintel.com 22 July 2005

Despite oil companies’ record as an engine of economic growth and their massive investments in cleaner fuels, recent polls across the US suggest most Americans still regard them as greedy, faceless multinationals that don’t give a fig about the environment or the societies in which they operate. The world’s four biggest publicly traded oil firms have just launched global advertising campaigns designed to change this image. But will these have the desired effect?

The campaigns unrolled by BP, Chevron, Exxon Mobil and Royal Dutch Shell are all aimed at brushing up their eco-friendly credentials. They focus on creating dialogue over the energy challenges that face the world, and the growing role of cleaner fuels and renewable energy such as solar, wind and biomass. In a letter signed by Dave (Chairman and CEO David O’Reilly), Chevron says it wants to “launch a debate” on the important issues facing the industry, including supply and demand, the role of alterna­tive energy and technology. Exxon says it is “taking on” and raising awareness of “the world’s toughest energy challenges.” Shell highlights the cleaner nature of its burgeoning LNG business, while BP focuses on its “beyond petroleum” image, with particular mention of solar, natural gas and hydrogen, as well as the cleaner fuels it produces.

Most of the ads appear in carefully selected outlets — publications such as The Economist, New Yorker, Wall Street Journal and Financial Times or TV channels like CNN or BBC World. They seem to be aimed at what Chevron calls “influentials” and Shell “special publics” — individuals in positions of influence or investors who are aware of the growing correlation between strength of brand and overall corporate performance, rather than people like the Japanese housewife or Spanish nurse who figure in the Shell ads.

Given the importance of brand image, it’s surprising how similar the ads are. All refer in some fashion to balancing the public’s desire for cleaner fuels against companies’ need to make a profit and in some cases the pres­sures of growing world energy demand. “It’s striking that the major oil firms are all talking about approximately the same topics at the same time, and this is undifferentiated,” says Phillipe Lebard, a senior partner at design and brand strategy consultants Lippincott Mercer.

So why are they doing it now? Chevron claims it is launching the debate because “the era of easy oil is over,” but others suggest the recent media focus on climate change policy, the US energy bill, the struggling Kyoto treaty, increased carbon emissions and concern about the impact of “unnatural weather” have concen­trated minds. “The public’s consciousness of energy issues is at an all-time high, and oil companies need to be seen to be in tune with that,” says Andy Bateman, worldwide account director for advertising agency Publicis. “It is a delicate subject, but actually confronting our energy consumption and the responsibilities we face is likely the best approach.”

Although the four companies are clearly trying to make the public realize they are good corporate citizens, there are drawbacks to this approach, since — whatever they say about renewables or alternative energy — the production, transport and sale of hydrocarbons remains their core business and that’s how consumers know them. “When attempting a brand-building exercise it is vital you take care of realities before perceptions,” Lebard says. “If oil companies try to create a picture of their business that is too far removed from reality it can actually increase overall cynicism of their nature and motives. The consumer is not stupid, and will quickly notice when the perceptions offered by adverts are revealed as misleading in other interactions with the business.”

Observers say Exxon and Chevron’s attempts to kick start “honest dialogue” using direct references to oil consumption in their ads are in many ways a refreshingly open approach from firms often characterized by skepticism over climate change science (EC May27,p4). Perhaps befitting their greener image, BP and Shell try to avoid the word “oil” and talk more about the environmentally friendly elements of their business. This could be construed as misleading. Paddy Briggs, a former brand manager for Shell, believes that while it is necessary to acknowledge Big Oil’s wider impact on society, implying that a firm has moved into businesses such as LNG to benefit the environment — rather than the bottom line — can be problematic “It is economic drivers that govern decisions, and it is dangerous to pretend otherwise.” He also suggests it is risky for oil firms only to highlight the topics they feel comfortable with, saying that “being overly selective is a weakness lobby groups and the media will latch onto.”

With its “beyond petroleum” slogan, BP has gone further than its peers in positioning itself as a new type of global energy company that confronts difficult issues and “takes actions beyond what is expected of an oil firm.” But it is not the only major walking a fine line between improving its corporate image, and promising far more than it can deliver.

By Angus Rodger, London

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