Brand value increases across categories

Part 3 | The Categories
Oil & Gas
HIGH RISK, HIGH
RETURN GETS MORE
COMPLICATED
Geopolitics adds to exploration challenges
A HIGH-RISK CATEGORY became
even more challenging early in 2013, with
the terrorist attack on an Algerian oil field
and the deaths of hostages, including four
employees of Norway’s Statoil.
Less than three years after the Deepwater
Horizon oil spill disaster in the Gulf of
Mexico, the attack demonstrated how
political instability compounds the
already difficult task of extracting natural
resources safely and responsibly.
Despite slow global economic growth, the
major international oil company (IOC)
brands—ExxonMobil, Shell, BP and Chevron—generally
performed well financially.
Results of the major country-owned
national oil companies (NOCs) varied.
Definition
The oil and gas category
includes both private
International Oil Companies
(IOCs) and state-owned
National Oil Companies (NOCs).
94 BrandZ Top 100 Most Valuable Global Brands 2013
The oil and gas category lost 4 percent
in brand value. The greatest decline of
all BrandZ categories, it was driven
in part by Petrobras, Brazil’s national
oil company, which experienced its first
quarterly loss in 13 years.
These other trends influenced the category:
Exploration difficulty
Shell received US government approval
to drill off the coast of Alaska, but
suspended its operations after an
accident incapacitated one of its ships.
Joint ventures
To share the potential risk of exploration
in the Arctic and Siberia, leading Russian
and IOC brands formed joint ventures.
Focus on gas
Brands shifted away from renewable
energy sources in favor of extracting
natural gas with fracking, the process of
using hydraulic pressure to fracture rock
and release gas trapped underground.
NOCs experience mix results
The BRIC economies impacted the
oil and gas category, most notably
the performance of Brazil’s Petrobras.
The state-controlled company faced
conflicting pressures from its mission to
simultaneously serve the public welfare
and make a profit. As Brazil’s economic
growth slowed, job creation became a
priority for a government focused on the
rise of more people into the middle class. By
contracting almost exclusively with Brazilian
companies to fulfill its infrastructure and
equipment needs, Petrobras helped keep the
unemployment rate low. But it also sustained
inefficiencies and expenses that impacted
financial performance.
Similarly, the increase in car ownership in
Brazil drove greater demand for gasoline,
but government controls regulated the
prices Petrobras could charge at the pump.
A new CEO joined Petrobras early in 2012,
but not before Ecopetrol, a Latin American
competitor, increased its market share.
Owned by the Colombian government,
Top 10 Oil & Gas
Brand value
2013 $M
Brand
contribution
Brand value %
change 2013 vs 2012
1 ExxonMobil 19,229 1 5%
2 Shell 17,678 1 -1%
3 Petrochina 13,380 1 11%
4 Sinopec 13,127 1 -6%
5 BP 11,520 1 11%
6 Chevron 9,036 1 5%
7 Gazprom 6,182 1 -8%
8 Petrobras 5,762 1 -45%
9 Ecopetrol 5,137 1 New
10 Lukoil 5,011 1 New
Valuations include data from BrandZ, Kantar Worldpanel, Kantar Retail and Bloomberg.
Brand Contribution measures the influence of brand alone on earnings, on a scale of 1 to 5 (5 highest).
Roadside presence
builds brands
Commodities | Oil & Gas
Insight
While the downstream part of the
oil and gas business is not the key
revenue driver, it contributes to
brand building. More people visit
one leading petrol station forecourt
around the world in a single day
than visit a McDonald’s outlet! They
experience the brand in a tangible
way. You can’t discount the potential
impact that those impressions make
(or could make) every single day.
Rosie Riley
Group Account Director
Millward Brown
Rosie.Riley@millwardbrown.com
Down 4%
95