Brandjack News

By Quentin Langley <P>

When the American oil giant, Standard Oil, was broken up, one part of it, mostly based in the Mid West, became known as the American Oil Company, usually shortened to Amoco.  Decades later it was one of the ‘seven sisters’ the big private sector oil companies that dominated the refining and marketing of oil and petroleum products.  Along with Shell and BP from Europe and Exxon (Esso), Mobil, Texaco and Chevron from the US, Amoco was among the most well-known companies in the world.  The very biggest oil companies, of course, are much more anonymous.  The big exploration and production companies, like Saudi Aramco, the Kuwait National Oil Corporation and Nigerian National Petroleum Company remain government owned and avoid developing a consumer profile.

In the 1990s, the oil industry began to concentrate again.  Exxon merged with Mobil, Texaco with Chevron and BP with Amoco.  Only the very largest, already an Anglo-Dutch joint venture, avoided this and remained as Royal Dutch Shell.  When BP merged with Amoco and absorbed the much smaller ARCO, the original plan was to brand all the American gas stations as Amoco with the BP name being used elsewhere.  However, the BP name soon came to dominate.  The name British Petroleum was dropped and the company name was officially changed to BP.  The company began to use the slogan ‘beyond petroleum’.

 The slogan – combined with the green floral logo (even though green has long been the corporate colour) – has given an impression that BP is the greenest of the oil companies.  This is an open invitation to environmental groups to examine corporate practices and determine whether or not the claim is justified.  In their own minds, I think, BP executives were sincere about ‘beyond petroleum’.  But they didn’t mean now.  Nor, necessarily, in your lifetime.  The oil companies expect a significant proportion of cars to be hydrogen powered within the next forty years.  Perhaps petrol driven cars will have almost disappeared, except from the collections of classic car enthusiasts within another twenty to thirty years.  But did no-one stop to ask the obvious question: when they use the slogan ‘beyond petroleum’, are the public not likely to assume they have a faster timescale in mind.

BP tried to stand up the ‘beyond petroleum’ claim by becoming the world’s leader in solar power.  It came with a relatively small price tag: they spent $45 million acquiring Solarex.  This was around the same time they were buying ARCO (another oil company) for $26.5 billion.

BP should have predicted that the attempt at greenwash would draw the unwelcome attention of NGOs, who would conclude the company was doing nowhere near as much as it should in the renewable field and that the slogan was deceptive.  Greenpeace decided last year to focus a major campaign on BP designed to influence its decision on exploiting tar sand oil reserves in Canada.

It was purely bad luck, of course, that, before the Greenpeace campaign reached its height, the Deepwater Horizon rig blew up.  A Greenpeace campaign designed with one purpose became somewhat recalibrated and pushed to the front of everyone’s attention.  

Loudly proclaiming green credentials which simply do not stand public scrutiny was a strategic error of the first order.  For this to be followed by an environmental calamity has put enormous, possibly irreparable stress on the BP brand.  Every company valuation includes ‘goodwill’ – the value of the brand, over and above the value of the company’s assets.  BP’s market valuation has collapsed, even though almost all its physical assets (Deepwater Horizon aside) are worth exactly as much as they were a few weeks ago.

Perhaps, when the dust settles and the oil in the Gulf has dispersed, this Anglo-American giant – 40% of its shares are traded in New York – will rebrand as Amoco.