The teaming of energy and tech has been inevitable since the oil prices started experiencing a dip. A consistent low price for oil and its related products has significantly dented the projected earnings of big Oil Companies like Chevron and Exxon.
The energy companies have resolved to create a partnership between the big tech companies and oil field service providers to streamline their operations and cut down on their costs. It has created a new frontier in digital oil services that industry leaders expect to grow by up to 500% in the next five years. The estimated cost savings are in the region of $ 150 billion for the energy companies and an even larger market for tech-solution companies in cloud computing.
The industry players state that they will primarily target cost-cutting efforts at general operations to streamline operations and create efficiencies that have been a challenge. Some of the leading data services solutions providing organizations like Amazon and Microsoft and Oil field services providing companies like Baker Hughes and Schlumberger have made strides by getting into contracts with some leading Oil production companies.
Over the past decades, big oil companies have been using tech solutions primarily in their oil drilling operations which ride on precision and data-based decision making. However, there has been an industry-wide reluctance by the energy companies in sharing their core market data for fear of disclosure of marketing techniques that could potentially jeopardize their position in the market. However, the shift is apparent and inevitable to stay afloat and withstand the fluctuations of the market.
Over the last year, Chevron and Exxon have entered into arrangements with Microsoft as Schlumberger deepened its partnership with Alphabet, Google’s parent company, in May of this year. Amazon, too, has made strides in locking up the new market by signing up Bp and Shell as some of their clients.
According to John Gibson, current CEO of Flotek and a former chairman and CEO of Energy technologies for energy investment bank Tudor, the industry’s magnitude of storage and capacity has made it possible for the industry players to achieve only things a dream in the prior years. His efforts have been pivotal in the teaming up of energy and tech.