The world’s big oil companies have all sorts
of potential changes on the drawing board,
including new fuel options, restaurants and
shops, and package-delivery services.
Some are experimenting with mobile apps to
speed the refueling process, or testing services
that bypass the gas station altogether
and deliver fuel directly to consumers, or
looking at ways that a shift by consumers to
car sharing or autonomous vehicles could
create opportunities for oil companies to operate
“We try to disrupt
is good for the
be good for us”
Istvan Kapitany, Head of Retail, Shell
erpecnews is published by McLean Events, Conferences and Media Ltd. 21
It’s all part of oil companies’ efforts to adapt
to changing consumer habits and new technologies
that threaten to upend the business
of selling gas. According to a report published
last year by the consulting firm Wood
Mackenzie, electric cars are likely to reduce
gasoline demand in the U.S. by 5% and possibly
by as much as 20% by 2035. Improved
fuel efficiency is expected to have an even
greater impact. Automated vehicles and the
spread of car sharing could also fundamentally
change the market in the long term.
Most large oil companies have been skeptical
of the impact electric cars will have
on fuel consumption. But some are already
experimenting with catering to both electric
and gas-fueled vehicles in certain markets,
as well as providing other fuels. They are
also seeing an opportunity to differentiate
themselves by offering services beyond refueling
Over the next 12 to 18 months, Shell will run
a series of experiments around the world to
help determine the best way to adapt its fuel
stations. One area of focus is on the possibilities
for providing access to alternative
fuels like hydrogen, liquefied natural gas
and electric chargers at refueling stations.
Shell has opened five LNG fueling stations
for trucks along the U.S. interstate highway
system and four in the Netherlands. It is
about to start offering fast-charging service
for electric cars at gas stations in the U.K.
and the Netherlands.
Others have similar efforts under way. BP
has 50 sites globally with electric charging.
France’s Total SA is planning to install 300
charging stations across Europe and 400
hydrogen fueling points throughout Germany
by 2023. Over the next five years it plans
to build 350 natural-gas stations in Europe.
Earlier this month, it acquired Europe’s
third-largest provider of natural gas for vehicle
fuel, adding 100 natural-gas fueling
stations to its portfolio.
Exxon Mobil which has largely reverted to
a licensing model in the US for its network
of fuel stations, is looking at developing a
new type of gasoline for the more fuel-efficient
cars that are expected to hit the market
in the years ahead because of tougher
regulatory standards around the world. It
has engineers in New Jersey working on
a turbocharger fuel that can give fuel-efficient
engines the same acceleration as a
A renewed focus on retail
Though many major oil companies reduced
their ownership of retail stations in recent
years, squeezed by weak margins and
tough competition, their refining and gasoline
retail divisions proved their worth when
oil prices slumped in 2014, helping to provide
a cushion against the financial drag felt
in the exploration and production business.
So, some big oil companies are now opening
new stations and upgrading existing
sites, eyeing opportunities in emerging
markets where fuel demand is rising and
scrambling to differentiate themselves in an
increasingly competitive environment.
BP is planning to open 200 retail stations in
Mexico this year and has secured a license
to open as many as 3,500 in India. The company
is in the midst of a $1.3 billion deal
to acquire supermarket chain Woolworths
fuels business in Australia. That would add
527 gas stations, already paired with Woolworths
markets, to BP’s business there. BP
has had success elsewhere in joining with
well-established retail brands. In the U.K.,
for instance, many BP stations have Marks
& Spencer food outlets.
“Fifteen years ago it was just fuel,” says Alex
Jensen, VP for BP’s retail arm in Europe.
Now, in the U.K., half of BP’s customers
don’t even fill up when they visit a station,
but just come in to buy food, she says.
BP also is experimenting with a mobile payment
app to make stopping for gas quicker
and easier. The app allows users to select a
fuel station to stop at, which fuel they want
and how much of it they need. The app tells
users when a pump is ready for them, set to
their specifications, so all a user has to do is
put the hose in the fuel tank. After the car is
refueled, payment is made with a credit or
debit card users have entered into the app.
Shell also is considering a mobile payment
app, as well as lockers at gas stations where
customers could pick up items they ordered
online. It is also looking to experiment with
restaurants, but currently just offers convenience
food like Costa Coffee in the U.K.
and bubble tea in Asia. Others are pursuing
similar models and looking at even bigger
changes in the long term.
In Hungary, oil company MOL Group is considering
ways to integrate its retail offering
with the development of autonomous cars
and the expansion of ride sharing. MOL’s
retail chief, Peter Ratatics, envisions the
company one day running a fleet of vehicles
and providing services around that. In
10 or 15 years’ time, customers could even
decide while they’re at work what they want
for dinner and have a MOL car pick them
up with the groceries already loaded in the
back, he explains.
This spring, Shell will start testing a fuel-delivery
service in the Netherlands. Using an
application designed in-house, customers
can request that Shell come and refill their
cars while they shop, eat or sleep. The company
is even considering adding coffee delivery
to the service.
Pilots for the initiative showed it wasn’t without
some teething problems, not least overly
helpful passersby shutting fuel doors that
the consumers had left open for Shell to fill
the tank before Shell had actually arrived.
But if these kinks can be worked out, the
company will look at options to provide the
service on a wider scale. “We try to disrupt
ourselves,” explains Shell’s head of retail,
Istvan Kapitany. “Whatever is good for the
consumers should be good for us.”
Nick Needs commenting on an article in the
Wall Street Journal by Sarah Kent.