Resilience in transition: Shell's bold move into alternative energy is paying off
Shell's brand value has demonstrated resilience and growth amidst a challenging economic landscape, recording a 4% increase to USD50.3 billion, thereby reinforcing its status as the most valuable oil and gas brand globally. This increase in brand value is particularly notable given the backdrop of falling revenues, a decline in enterprise value, and a drop in the Brand Strength Index (BSI) from 77.2 to 74.2.
Shell's financial performance has faced significant pressures, with a 56% tumble in profits to USD5 billion, attributed to a combination of lower oil and gas prices, diminished liquefied natural gas (LNG) trading results, reduced refining margins, and decreased sales volumes. These factors contributed to a 1.7% decline in the value of Shell shares, slightly underperforming against the broader European energy index.
Savio D'Souza, Senior Director at Brand Finance commented:
“Shell's strategic response to these challenges includes a focus on alternative energy segments and a diversification of its product portfolio, aiming to mitigate the impacts of volatile market conditions and align with global energy transition trends. This approach, combined with Shell's sustained investment in brand and operational excellence, positions it well to navigate the evolving energy landscape and maintain its leadership position in the global market.”
QatarEnergy ignites the market: brand value soars 82% amid global LNG surge
QatarEnergy's brand value has achieved industry-leading growth substantially due to the integration of its subsidiary, Qatargas, into the QatarEnergy brand. This achieved an 82% increase in its brand value to USD3.2 billion, positioning it as the fastest-growing brand in its sector. This remarkable growth was substantially due to the brand integration, but also benefited from a significant rise in revenues, favourable exchange rate fluctuations, despite a fall in its Brand Strength Index (BSI) from 70.0 to 54.4. This brand strength reduction comes because of the recent integration of new operations, even though the company's financial performance in 2022 was notably robust, with a reported net profit of 154.6 billion riyal (USD42.47 billion), a 58% increase from the previous year. This surge in profitability came at a time when the global demand for liquefied natural gas (LNG) skyrocketed, particularly following Russia's invasion of Ukraine, underscoring QatarEnergy's pivotal role in the global energy landscape.
From underground to upper echelon: Pioneer and EOG Resources' rapid rise in the energy sector
Pioneer Natural Resources and EOG Resources have emerged amongst the fastest-growing brands in the oil and gas sector, each achieving significant growth in brand value amid the rapidly changing market conditions. Pioneer Natural has achieved a remarkable 35% increase in brand value to USD4.5 billion, while EOG Resources has seen its brand value grow by 30% to USD3.5 billion, positioning them as the second and third fastest-growing brands in the sector, respectively.
Brand Finance research found that EOG Resources' growth can be attributed to the dividends of its decentralised exploration efforts. The discovery of new resources in the Ohio Utica Combo, alongside advancements in the South Texas Dorado and Southern Powder River Basin, underscores the company's innovative approach to exploration. EOG's emphasis on developing several exploration prospects further demonstrates its capacity to enhance its portfolio and drive revenue growth.
Re-emerging champion from challenge: PETRONAS leads as oil and gas sector's strongest brand
PETRONAS, Malaysia's state-owned oil and gas giant, demonstrated remarkable resilience and strategic acumen in navigating the complex global energy market, achieving a 15% increase in brand value to USD14.6 billion. PETRONAS – having retained its AAA brand strength rating with a BSI of 87.78 subsiding slightly from 89.44 – remains the strongest brand in the oil and gas sector despite facing significant global challenges. However, Brand Finance research found that customers are concerned about the perception of reduced value for money amidst higher energy prices, underscoring the need for PETRONAS to carefully manage its pricing strategies to maintain its competitive edge and customer loyalty.