Statoil’s Transformation: Dark Horse Leading the Pack
The board of directors of Statoil, the world’s 11th largest oil and gas company and top offshore operator in the world, have revealed a proposal to change the iconic name of the company to Equinor, complete with a new, vibrant logo with red diamonds instead of the current magenta. While the name still needs to be proposed to shareholders in a resolution to the Annual General Meeting on 15 May, the Norwegian government as the majority shareholder has already announced its support and will vote in favor, along with the five unions representing Statoil employees.
“The name Equinor reflects ongoing changes and supports the always safe, high value and low carbon strategy we outlined last year.”
Jon Erik Reinhardsen
Chair of the board, Jon Erik Reinhardsen, shares the rationale behind the change. “The world is changing, and so is Statoil. The biggest transition our modern-day energy systems have ever seen is underway, and we aim to be at the forefront of this development … The name Equinor reflects ongoing changes and supports the always safe, high value and low carbon strategy we outlined last year.” The word ‘change’ forms a joyous chorus in the exuberant promotional video launched to celebrate the new name, which has been explained as the combination of the prefix ‘equi-’, associated with words like ‘equal’, ‘equality’ and ‘equilibrium’, and the word ‘nor’, reflecting the company’s pride in its Norwegian origins.
Calling it a “historic day”, president and CEO Eldar Sætre affirms, “The name Equinor captures our heritage and values, and what we aim to be in the future.”
The Norwegians are not the first to attempt to clean up their oily image. As early as 2000, British Petroleum decided to ditch the word ‘Petroleum’ by rebranding as BP – to stand for “Beyond Petroleum”. Then-Chairman Sir John Browne proclaimed, perhaps prematurely, that BP was not an oil company. A decade later, the Deepwater Horizon oil spill occurred, and a year after that in 2011, BP closed its solar power business. In 2013, the beleaguered company attempted to divest its wind power assets, though without success. After this troubled period, however, BP has returned to investing in alternative energy, touting its renewables business as the largest among its oil and gas peers, spanning biofuels and biopower in Brazil, wind in the US, and most recently, a return to solar power with a strategic alliance with Lightsource.
Even within the Nordics, another company has already rebranded itself as part of its energy transition strategy. In November 2017, the Danish powerhouse previously known as DONG Energy (DONG being the acronym for Danish Oil and Natural Gas), changed its name to Ørsted, after Danish scientist Hans Christian Ørsted, complete with a video highlighting his scientific achievement – among which was the groundbreaking discovery of electromagnetism – and the inspiration they hope to derive from his work. The name change covers their decision to phase out coal by 2023, their leading market share of 25 percent in the global offshore wind market, and, most radically, their divestiture of their upstream oil and gas business to British petrochemicals group Ineos, which completed their transformation to a green energy company. Over the past decade, Ørsted has managed to more than halve their carbon emissions and aims to make that figure 96 percent by 2023.
“Statoil, like its Danish counterpart, has already seen significant success in its low-carbon energy transition”
Fortunately, Statoil, like its Danish counterpart, has already seen significant success in its low-carbon energy transition. The company is already one of the world’s most carbon-efficient producers of oil and gas and will press its low carbon advantage further. Since 2017, Statoil has set clear principles for its transition into a broad energy company, with the target of building a material industrial position within profitable renewable energy. The Carbon Disclosure Project (CDP) already ranks Statoil as the oil and gas company with the most well-prepared climate strategy out of the top 11 global producers by market capitalization in USD. The company also expects to invest 15 to 20 percent of total capex in new energy solutions by 2030.
Nevertheless, save a brief period from 2006 to 2009 following the merger of Statoil and Norsk Hydro, which saw the company briefly change its name to StatoilHydro, the name Statoil has served the company well for over five decades. According to Brand Finance, an international brand consultancy, Statoil remains the most valuable Norwegian brand globally in 2018, as well as the third most valuable Nordic brand (after Swedish consumer brands IKEA and H&M), ranking 197th globally. Transferring that legacy to Equinor will not be an overnight task.
Writer: Karen Xi