To say it’s been a volatile year for our industry would be a major understatement. Prices hit record lows, workforces became leaner than lean, signs pointed to long-term declines in petroleum demand and the election plus subsequent policy changes caused major disruption. It felt as if we were on the playground fending off bullies.
While I’d like to say this is familiar territory, the E&P landscape is almost unrecognizable these days. Watching stocks plummet is still downright frightening and sets a scary precedent for the year to come. And if the economy is slow to recover, more financial and operational cuts will be an inevitability. This has left everyone in the industry venturing into 2021 unsure of what to expect.
Despite it all, we’re resilient, and many E&P firms are already in a race to rebuild. This is not an easy endeavor, of course, especially with several organizations competing for the same talent, regulatory challenges inherent in this space and pressure from shareholders to make up earnings. When I watch our industry recover time and again, it’s truly the definition of resilience.
Time for People to Take Notice
However, resilience doesn’t necessarily pay the bills, and companies in the oil and gas industry need to start reminding the public that there’s more to our ranks than ConocoPhillips and BP. Flying under the radar, as most operators do, is no way to entice investors to stake anything into a company—or to attract the next generation of talent. E&P companies need to start rethinking their marketing strategies and investing more than 4% of their total company budget, which is the norm.
When I started at Enertia, social media wasn’t even on our radar. Now, it’s a huge part of our marketing. Our accounts are our personality, allowing us to engage with customers in ways we never could before. While social media isn’t the only option, it has increased our presence in an industry that defined a lot of agreements with handshakes. The industry is changing, and a strong digital footprint is a necessity.
This, naturally, leads to the question: How should E&P companies reimagine their marketing strategies for the future? These tips are the best places to start:
1. Branch out from traditional paths. E&Ps are constantly looking to improve shareholder confidence. When you buy a Ford — or any brand — seeing another Ford serves as an endorsement of your decision to make the purchase. That same feeling can happen for investors by diversifying your marketing channels. This isn’t to say you must run TV ads, but your targeted campaign should explore new avenues to reach individuals outside the industry. Expand your organization’s brand and messaging into other investor markets by moving beyond traditional E&P channels.
2. Establish proof of life. Some organizations just don’t make it, and a gentle reminder that you’re still in business goes a long way in this industry. Even if your survival is the result of an M&A, get the word out — just like Chevron did when it acquired Noble Energy for $13 billion in October and Devon Energy and WPX Energy did when they joined forces in a $12 billion merger in September.
Under normal circumstances, these moves can help companies expand into new geographic areas and reach new customers. In a pandemic, they can keep all parties solvent. Investors want to hear about companies well-positioned to weather any storm, so share your success stories for optimal growth. Just remember to issue more than a press release on the matter to maximize the value of your resilience.
3. Add character through community involvement. Companies are more than just organizations, and the public wants to learn more about the individuals behind them. Consumers and investors alike want to see team members actively participate in the community, weaving the business into the fabric of society. Build a campaign around your company’s character, culture and initiatives outside the industry — highlighting, for instance, your philanthropic work or your involvement with educational institutions that helps bridge the gap between seasoned experts and the next generation entering oil and gas. Share those stories to invite stakeholders into the culture of your organization.
4. Become a resource. No man is an island. The same holds true for companies, and it sometimes takes an exchange for others to take notice. Consider providing resources or services to potential partners or investors. Think about how you can help those inside and outside the oil and gas industry and your organization. What can you offer that shifts or even expands your organization’s identity? Maybe it’s a strategy used for partnerships and acquisitions or a document on merging cultures.
At Enertia, for example, we offer checklists that help operators when selecting ERPs. Even if they don’t choose Enertia, we want to provide something that’s genuinely helpful. Outside of the industry, we’ve partnered with organizations such as Esri to ensure that we’re working together to better operators’ experience and their knowledge of available resources.
There’s so much noise in the E&P industry—so many distractions getting in the way of capturing positive attention. Now is the time for companies to direct the narrative and try new marketing tactics to stay top of mind.
Shell reached an agreement for the sale of its Permian Basin business to ConocoPhillips for $9.5 billion in cash, confirming rumors the supermajor was considering exiting the key shale asset.
BP last reduced its dividend in 2010, when it was suspended for three quarters following the deadly Deepwater Horizon rig explosion.
Shell hit record earnings from its vast retail division, despite the impact on demand of the COVID-19 pandemic, which it said continued to generate "significant uncertainty."