Statoil’s UK PR campaign: a quiet power play
- 19 Sep 2012, 12:00
- Ros Donald and Chris Peters
Author: Oyvind Hagen/Statoil
If you've read a climate or energy story on the Telegraph
website over the past week, you may have seen that Norwegian oil
and gas company Statoil has
sponsored a series of articles in partnership with the newspaper.
Discussing the UK's energy future, the series so far offers a
fairly measured view of the energy challenges the country faces. By
presenting itself as a moderate voice in the energy debate and
emphasising its green credentials, Statoil told us it wants to
boost natural gas's image and replace coal in the future of the UK
energy mix. But is the company's stragegy as soft - and green - as
The Telegraph series
Statoil has so far produced four articles as part of its series,
Fueling the UK'. The series represents a significant
investment. Based on the Telegraph's
advertising rates, it appears to have cost Statoil at least
£100,000 so far. And it doesn't seem shy of exploring the
challenges as well as the opportunities for the gas industry.
first piece by Statoil blogger Amy Wilson is a scene-setter
outlining natural gas's "unique position" in balancing "reliable,
available and relatively cheap" fossil fuels and the need to
decarbonise using "expensive" renewables, which still need backup
from conventional fuels. Incidentally, the piece appears strongly
inspired in places by an earlier
BBC report, following the BBC's lead in saying the government
wants to "almost completely decarbonise" UK electricity
production by the 2030s, and reproducing a quote from head of
campaign group Sandbag, Baroness Worthington, in which the peer
advocates replacing coal-fired power with gas.
The other articles are a mixture of news and opinion. They
include opposing pieces by two economists - a pro-gas and
nuclear call to arms by
Ruth Lea (citing reports Carbon Brief has analysed here and here)
and a reminder that the UK must balance carbon cutting and energy
Paul Ekins. The news pieces encompass new
tax breaks for North Sea oil and gas producers and a letter by
the UK's Committee on Climate Change (CCC) opposing the
government's apparent keenness to increase gas-powered
Statoil's media campaign
The Telegraph series seems to be part of a much larger campaign.
Last May, Media
Week reported that advertising agency UM London had landed a £2
million contract to run Statoil's first ever UK marketing campaign,
aimed at raising the company's profile in the UK. According to
"[The campaign] aims to target an
'informed elite' audience of business leaders, government ministers
and senior civil servants as they plan to shape the policy for the
UK's future energy mix".
The campaign is targeting other high-profile media outlets: it
produced an advertising feature in the Times
last year, and is also co-lead sponsor of the Financial Times's
FT Global Energy
Leaders Summit, taking place in London this week.
Carbon Brief contacted Statoil to ask how much it was spending
on advertising Europe-wide, but the company declined to provide
details. A spokesman spelled out how important the UK campaign is
to Statoil, however. He said:
"The investment reflects our strong gas
position and commitment to gas as an energy source for the future.
Our ambition is to highlight the positive contributions of natural
gas in UK, also from a climate perspective where natural gas can
result in lower emission by replacing coal in the power mix."
The voice of reason
From the tone of the Telegraph campaign it appears that an
important part of the Statoil campaign is to be seen as a natural
energy partner for European governments, especially the UK. The
company is the second-biggest retailer of natural gas to the
European Union, behind Russian gas incumbent Gazprom.
Gazprom has suffered a serious downturn in its fortunes of late.
From the European Commission's investigation of the company for
suspected abuse of dominance in the gas supply market, to news that
Russian independent suppliers are challenging its dominance, the
once apparently invincible Gazprom looks
increasingly embattled - a far cry from the company which shut
entire gas supply only a few years ago because the country had
failed to pay its bill.
Statoil is well-placed to exploit Gazprom's weakness, as well as
the reputation for volatility it has earned in previous years. So
the campaign seems designed to present the Norwegian company as a
more dependable alternative.
The greener option?
Aside from Gazprom, Statoil's other big rival is the coal
industry. As is clear from its statement to us, Statoil is keen to
promote gas as both the clean alternative to coal and a bridge fuel
to renewables. By marketing itself as a greener option, Statoil
wants to make itself more attractive to policymakers than cheaper
There is a second part to its green message: Statoil is also
promoting its expertise in carbon capture and storage (CCS)
technology, which it's keen to market to the UK. The company runs a
$1 billion carbon capture and storage facility and technology
centre at its Mongstad refinery, and Statoil is keen to market CCS
as an important part of the future energy landscape.
Statoil executive Rune Bjoernson
claimed at a conference last year:
"A combination of natural gas, offshore
wind and, in the long term, carbon capture and storage at gas-fired
plants can allow Europe to meet its environmental emissions targets
quickly and affordably."
But how tangible is Statoil's CCS promise? Critics point out
that Statoil has only managed to make its Mongstad facility work at
cost - 10 times over the facility's original budget. Although
the facility is technologically innovative, it is still
unclear how Statoil will be able to exploit its advances on a
commercial scale to the timetables politicians appear to
It's also reasonable to question Statoil's commitment to
renewables in light of its recent actions. Last November, the
company threatened to suspend gas supplies to the UK unless the
scaled back its commitment to renewables. That's not something
it's mentioned so far in its Telegraph campaign. At the time, the
Times quoted Rune Bjornson, Statoil's natural gas executive
"There are other places we can export
the gas to apart from the UK. We have the gas you need if you want
It's not quite the level of realpolitik of Gazprom's heyday, but
the message seems roughly the same.
Statoil's strong hand
Statoil has been gaining ground in the UK since last October
when DECC announced an
energy partnership with the Norwegian state - which owns
two-thirds of Statoil. Former energy minister Charles Hendry
said the agreement confirmed:
"...the importance of Norwegian natural
gas to UK energy needs as an essential part of our longer term
energy security, and it boosts cooperation on CCS and the
development of renewable energy and interconnection."
But things have really picked up since Statoil's ultimatum last
DECC said in a statement this July:
"The Government [...] is today
confirming that it sees gas continuing to play an important part in
the energy mix well into and beyond 2030, while meeting our carbon
Statoil also looks set to benefit from the Treasury's latest gas
exploration tax breaks, having announced in August that it has
new gas field in the North Sea.
The CCC's challenge
The way is not entirely clear for the company: the
Conservatives' coalition partners, the LIberal Democrats are still
against an all-out gas push, and the CCC's
letter made clear that such a policy could be illegal under the
climate change act.
response indicates Statoil doesn't have much to worry about,
"After 2030 we expect that gas will
increasingly be used only as back up, or fitted with Carbon Capture
and Storage technology. But, alongside up-scaling of renewables,
nuclear new build, and eventually with carbon capture and storage,
gas has an important role to play in the transition to a low carbon
The outcome of the UK's coming energy choices will be crucial
for the gas industry all over Europe. The UK is the only EU member
state with legally-binding
carbon reduction targets, and it is an influential player in the EU
What's more, gas plant is a long-term investment: combined cycle
gas plant has a lifespan of around 30 years - a fact that the
International Energy Agency flagged last year when it warned the
world could lock itself in to
warming above two degrees Celsius if it continued to bring new
fossil fuel installations online. So if new UK gas plant are built
- with Statoil supply contracts in place - Statoil can guarantee
its income for years to come.
The head of Statoil's Arctic unit, Rúni Hansen, spoke yesterday
at the FT summit of the company's need to work with Arctic
communities, building support for the company's drilling activities
in the region. Likewise, Statoil's interest in persuading the UK
it's both green and reliable is clear - even if it is willing to
bypass the diplomatic route in favour of zero-sum tactics, as it
demonstrated last year.
How does Statoil's PR campaign fit in to the plan? By appearing
to promote debate in the Telegraph and at the FT summit, it might
achieve its ambition to shape UK energy policy, but it also runs
the risk of looking like it lacks answers to the questions it
poses, on climate and CCS. In addition, by courting more publicity,
it may also face questions about the robustness of its claims -
especially its bid to be seen as part of a decarbonisation
Whether or not the company succeeds won't be immediately obvious -
the effects are likely to be just as subtle as the campaign itself.
Maybe, given the way that the UK's energy policy is going,
Statoil's soft PR tactics are working already.