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Alex Kimani

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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Big Oil Paying Millions To Social Media Influencers To Target Millennials

  • Big oil and gas companies are paying millions to influencers on social media and PR firms to market their companies to a younger audience.
  • Nora Capistrano Sangalang--a TikTok and Instagram influencer with 1.7 million followers--has partnered with Shell to promote their loyalty program.
  • Exxon Mobil’s newly minted ‘Low Carbon’ segment is the kind of sustainable businesses that Big Oil is desperately trying to be identified with by younger generations.
Millenials

Big oil and gas companies like Exxon Mobil Corp. (NYSE:XOM) and Shell Plc (NYSE:SHEL) have been working with social media influencers and PR firms that help them target millennials and younger generations, Business Insider has reported. According to the publication, more than 100 influencers have partnered with oil companies since 2017.

"They are trying to win the trust of a younger generation. They're not just promoting a particular product, but trying to alter their perception in the public eye and maintain their social license" Sam Bright, DeSmog's UK deputy editor, has told The Post.

"Many don't know we are also, in a disciplined way, investing billions in low-carbon solutions and products in support of a balanced energy transition. Making customers aware of those products by way of advertising on social media is one way we pursue business performance and a valid part of our marketing activities,"Shell spokesperson Curtis Smith has told The Post.

"ExxonMobil, like many companies, works with influencers to educate consumers about the full benefits of our rewards program," Julie King, a spokesperson for ExxonMobil, has told Insider.

Nora Capistrano Sangalang--a TikTok and Instagram influencer with 1.7 million followers--has partnered with Shell to promote their loyalty program while Meredith Steele--a TikTok influencer with 1 million followers--partnered with ExxonMobil last year to promote their rewards app. 

But Big Oil companies aren't working alone. Edelman, a public relations firm, is working with Shell to promote it to millennials and younger audiences

"The company tasked Edelman with the job of giving millennials a reason to connect emotionally with Shell's commitment to a sustainable future. We needed them to forget their prejudices about 'big oil' and think differently about Shell,"  Edelman's website reads.

Sustainable Businesses

Exxon Mobil’s newly minted ‘Low Carbon’ segment is the kind of sustainable businesses that Big Oil is desperately trying to be identified with by younger generations

Back in February, Exxon pulled the plug on its 14-year-long algae biofuels project, becoming the last oil company to abandon what was once considered the fuel of the future. The whole idea was not without merit, though. Algae do have some clear advantages over other biofuel candidates, mainly because these photosynthetic microorganisms are super-efficient at converting sunlight into biomass, have high lipid content of up to 80% for some varieties and are more versatile than, say, corn, a common biofuel crop. 

Unfortunately, Exxon and its Big Oil cohorts discovered that it's too tough to make the economics of algae biofuels competitive with those of much cheaper crude, with algae-based bioproducts firm Cellana estimating that crude would have to hit ~$500/bbl for algae biofuels to compete successfully. Related: Ecuador Rejects Oil Drilling In The Amazon

But Exxon is not about to give up on its non-oil ventures. In April, Exxon CEO Darren Woods told investors that the company’s Low Carbon business has the potential to outperform its legacy oil and gas business within a decade and generate hundreds of billions in revenues. Woods outlined projections showing how the business has the potential to hit revenue of billions of dollars within the next five years; tens of billions in 5-10 years, and hundreds of billions after the initial 10-year ramp-up. However, whether Exxon is able to actualize its dream will depend on regulatory and policy support for carbon pricing, as well as the cost to abate greenhouse gas emissions, among other changes, Ammann said.

Exxon believes that this will result in a "much more stable, or less cyclical" that is less prone to commodity price swings through predictable, long-term contracts with customers aiming to lower their own carbon footprint. For instance, Exxon recently signed a long-term contract with  industrial gas company Linde Plc. (NYSE:LIN) that involves offtake of carbon dioxide associated with Linde’s planned clean hydrogen project in Beaumont, Texas.  Exxon will transport and permanently store as much as 2.2M metric tons/year of carbon dioxide each year from Linde’s plant. Back in February, Linde unveiled plans to build a $1.8B complex which will include autothermal reforming with carbon capture and a large air separation plant to supply clean hydrogen and nitrogen.

Exxon is not the only Big Oil company pursuing carbon capture on a grand scale. Back in February, oilfield services company Schlumberger Ltd (NYSE:SLB) discussed its newly carved SLB New Energy unit. According to Gavin Rennick, president of SLB New Energy is all about impact and scale, with a new mantra to ‘Target Billion-Dollar Opportunities Only’. And, just like Exxon, Schlumberger has big dreams for its new business: Rennick told BNEF the unit is expected to hit revenue of $3 billion by the end of the current decade and at least $10 billion by the end of the next decade. SLB will focus on five key niches, each with a minimum addressable market of $10 billion.

•Carbon solutions

•Hydrogen

•Geothermal and geoenergy

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•Energy storage

•Critical minerals

Of these segments, Rennick says carbon capture, utilization and sequestration (CCUS) is the fastest growing opportunity thanks to the significant boost it got from the U.S. Inflation Reduction Act (IRA).

By Alex Kimani for Oilprice.com

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