The giants of tech are always on the hunt for the next bastion of growth, and they have lately set their sights on the oil and gas industry where there is a lot of data being collected. That’s the argument Alphabet Inc.’s Google (GOOG) is using to court energy companies, recently saying at an industry conference covered by The Wall Street Journal that only 5% of the data the industry collects is being used.
“Companies in the oil and gas industry will either be a catalyst for change or they will be a casualty of change,” said Google's Darryl Willis during an industry conference according to the WSJ. Before his recent move to Google, Willis was a long-time executive at BP PLC serving the company for nearly three decades. (See also: Energy Stocks Could Enter Bear Market.)
Microsoft Also Eyeing Oil and Gas
But Google isn’t alone in offering its cloud-based services to manage the oil and gas industry’s data. Both Microsoft Corp. (MSFT) and Google in recent months have inked data deals with Chevron Corp. (CVX), Equinor AS (EQNR), Total SA (TOT) and Repsol SA worth billions of dollars collectively. Jason Zander, executive vice president of Microsoft Azure, its cloud-based service, confirmed to the Journal that the software giant is focusing more on the energy industry.
But while the tech titans are pushing to get more business from the oil and gas industry, they are also facing pushback from the players who are wary of sharing data with companies that could become direct competitors as both sides invest more in clean energy. “I can imagine us competing with, but also partnering with digital companies,” said Maarten Wetselaar, the head of the gas and new energies business at Royal Dutch Shell (RDS.A), to the Journal. “There’s a very different competitor set that could emerge in this business.” (See also: Amazon Rivalry at Core of Partnership With Walmart: Microsoft CEO.)
Energy Companies May Not Be Willing Partners
Google and Microsoft are aware of the concerns and have been taking steps to assuage them. Take Willis at Google: He told the paper that the focus is on being the partner of choice for the energy industry, not a competitor. Meanwhile, Zander of Microsoft said the company understands the concerns of the oil and gas industry that information-service providers may eventually became even indirect competitors. “Our message is: ’We are not in these industries. I’m not in retail. I’m not in energy,’” he told the WSJ.