- Oil companies spent $12.5 billion on software in 2018
- Low oil prices may slow but won’t stop spending boost
BloombergNEF research shows that the oil and gas sector spent $12.5 billion on enterprise software in 2018 with companies such as SAP, Microsoft and Oracle. Leaders such as Shell, Equinor, BP and Chevron already spend hundreds of millions on cloud computing contracts and are working with AI startups.
In 2020 we calculate the oil sector will spend $1.4 billion on cloud computing and $1.1 billion on advanced analytics. As sensors and artificial intelligence become more prevalent, BNEF forecasts the sector to spend $15.7 billion in those spaces by 2030.
The current oil price crash will have an impact on oil company spending. But we do not believe it will dent their appetite, longer-term, for software. Cloud computing and analytics reduce operating costs and overheads, enhancing safety and reducing CO2 emissions.
Most of the software spending will be upstream, in exploration and production. Microsoft, Schlumberger, Baker Hughes, C3.ai and Halliburton all sell cloud or analytics applications.
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