Why the oil and gas industry might be facing its Kodak moment
Last week, I spent two days at EIT InnoEnergy’s The Business Booster (TBB) event in Paris. It was a whirlwind of energy, innovations and insights. During the first day, I had the privilege of sitting in with Dr Steven Chu, former US Secretary of Energy and Nobel prize winner for Physics, on a media interview with the Guardian. While the journalist questioned him on the energy transition and the role of fossil fuels, he said something which struck me – “Oil and gas companies have to be part of the solution, but reinvention will be key, otherwise they face the same fate as Kodak”.
Kodak famously stayed steadfast to the film industry as digital photography, which they helped invent, took hold of the market. In fact, Kodak’s demise was characterised by the management team’s inability to see digital as a disruptive technology that could truly change the sector.
While we know that’s not true of the oil and gas sector, not everyone will embrace the energy transition quickly enough and in the right way. So, what can companies operating in the space learn from other industries that have faced similar, pivotal challenges?
Let’s take a look at an iconic brand like IBM. In 1896 it was a tabulating machine company, then during the 1940s it helped collect data during the war effort and in the 1960s it became a business computer specialist selling large computers to corporates and governments. The 1980s came around and IBM led the personal computer revolution, followed by a swift change in the 1990s into a services company, at the time it was making $6 billion from services. Fast forward to the 2000s and it was making $33 billion. This shape-shifting attitude is what has made IBM successful – quick to anticipate and respond to market changes to stay relevant.
Now, if we look at the oil and gas space, there are some brands already revitalising and reinventing themselves – just look at Equinor. Its name change in March 2018 was a huge leap. The Norwegian oil and gas operator had been known as Statoil for almost 50 years. But the company knew that the energy transition was coming and it made the bold move to be one of the first companies to dive in headfirst and its name was only the start. However, it’s not only operators who face this decision, oilfield services companies who serve the sector also need to consider refreshing their brands too.
In fact, this is such a hot topic, that for the first time, TBB, as a sustainable energy event, ran a session on new horizons for the oil industry, including speakers from Equinor, GA Drilling and Total Ventures.
Perhaps next year in Berlin, we’ll see more oil and gas (energy) companies involved in TBB? One thing is for sure, the energy transition is here – the real question is, which oil and gas companies will lead the sector’s reinvention and who will face the fate of Kodak?
If you want to know more about how we can help revitalise and refresh your brand for the energy transition – get in touch.