Shell, BP rank highest among majors in Pike biofuels report

Although the biofuels industry is still in its infancy stage, it already accounts for almost 30 billion gallons of production. The amount of biofuels currently produced can be considered a mere trickle, but over the next decade, biofuels are expected to play an increasingly important role. This is due in part to mandates imposed by at least 31 countries all over the world. The growth of the biofuels industry does not run counter to the interests of Big Oil because the world’s largest oil companies have been formulating strategies to bring biofuels to commercial scale. A new Pike Pulse report published by Pike Research states that Shell and BP are two oil majors best positioned to develop and profit from the growth of biofuels.
“Pike Pulse Report: Biofuels Commercialization by Oil Majors”

“While Pike Research does not perceive any of the oil majors to be outright industry leaders at this stage, several companies have demonstrated a solid foundation for growth and long-term success,” said senior analyst Mackinnon Lawrence in the most recent report released by Pike. “Shell and BP both have advantageous near-term positions for ethanol production from sugarcane and strong commitments to commercializing advanced biofuel pathways.” This is because both companies are pursuing strategies that are based on rapid scale-up in Brazil. Brazil has a very efficient sugarcane market which represents one of the most actively growing biofuels markets, and has the potential to supply sugar for advanced conversion technologies which produce “drop-in” fuels as well. In the Pike Pulse assessment, Shell scored slightly higher than BP largely because of its US$12 billion venture with Cosan, a leading global producer of ethanol from sugarcane. BP, on the other hand, has been an early pioneer in the development of advanced biofuels. The company has made multiple investments in a number of potentially breakthrough feedstocks, and participates actively in R&D efforts. BP has also built a strong portfolio consisting of early-stage investments. Ranked third is France’s Total, which has mapped out a strategy similar to the ones developed by Shell and BP. However, Total’s commitment has been quite conservative and is aimed at the development of a delivery supply chain for biofuels, focused mostly in Brazil.
The “Pike Pulse Report: Biofuels Commercialization by Oil Majors” presents an evaluation of 10 of the leading publicly held international oil majors. It rates the companies based upon 12 criteria for strategy and execution, such as production strategy and roadmap, partnerships, geographic reach, investment portfolio, distribution network and market impact. Pike Research is a market research and consulting firm which provides in-depth analysis of clean technology markets all over the world. (March 20, 2012)