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Shell named most valuable O&G brand by consultancy

Anglo-Dutch energy giant remains the world's most valuable oil and gas brand with a value of $36.8bn, up from $31.6bn last year, in Brand Finance's annual rankings

Shell’s asset disposal programme and geographic pullback have helped it to consolidate the strength of its brand.
Shell’s asset disposal programme and geographic pullback have helped it to consolidate the strength of its brand.

Royal Dutch Shell has maintained its status as the world’s most valuable oil and gas brand in valuation and strategy consultancy Brand Finance’s annual list of the world’s major companies.

Shell remains the world’s most valuable oil and gas brand with a value of $36.8bn, up from $31.6bn last year. The Anglo-Dutch energy giant’s asset disposal programme and geographic pullback have helped it to consolidate the strength of its brand, which has been upgraded from AA+ to AAA-.

‘Shell’s long-standing partnership with Ferrari continues to deliver returns, with a demonstrable price premium attributable to the association with the world’s most powerful auto brand’, Brand Finance says in a press release.

As part of its ‘Make the Future’ initiative, Shell enlisted the help of six popstars from around the world for its ‘Best Day of My Life’ video, which became one of the most viral ads of 2016. “The enhanced strength of Shell’s brand will enable it to maintain or improve margins, even as revenues fall,” Brand Finance CEO David Haigh commented.

Chinese energy majors Sinopec and PetroChina have secured the second and third ranks respectively, as according to Brand Finance these companies ‘are growing rapidly’. As in so many other of Brand Finance’s brand value league tables, Chinese brands are just on the cusp of taking the number one spot.

Sinopec and PetroChina’s brands are worth $29.6bn and $29bn respectively and even with far lower rates of growth than this year (47% and 43%), both could easily overtake Shell in 2018.

“Sinopec is planning a $10bn IPO of its retail business which includes over 30,000 sites. A clear understanding of brand value drivers will be a useful tool in extracting maximum value from the listing and post-sale brand management will become even more critical as shareholders demand accountability,” Haigh comments.

Every year, Brand Finance values the brands of thousands of the world’s biggest companies. Brands are first evaluated to determine their power/strength (based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation) and given a corresponding letter grade up to AAA+.

Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand, which is projected into perpetuity to determine the brand’s value. The world’s most valuable oil and gas brands are ranked and included in the Brand Finance Oil & Gas 50 2017.

In brand value terms, the last year has been perhaps surprisingly successful for oil and gas brands. Just seven of the top 50 have lost brand value, with dozens of major brands seeing double digit growth. Oil prices saw a fairly steady increase across 2016 as supply became slightly more constrained, helping to improve revenues. After a drop at the beginning of the year, Brent Crude prices nearly doubled in value from early January to the end of December.

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