This article first appeared on the BNEF mobile app and the Bloomberg Terminal.
- Shell and IBM partner on digital technologies for mining
- Latest in trend of energy firms forming software businesses
Shell and IBM have launched a digital services marketplace for mining companies called Oren. Shell isn’t the only oil major keen to exploit its software analytics originally developed for internal operations. BP is also selling software for applications such as smart cities.
While selling software to peers in oil and gas raises competitive issues, selling to adjacent extractive industries like mining can make more strategic sense. Mining also makes sense because it has been slower to digitalize than oil, and can benefit from many of the same technologies used in oil and gas.
Mining giant Rio Tinto is a digital technology leader but hasn’t indicated plans to sell its digital analytics tools. Mining firms today source most of their digital technologies from equipment and service providers like Sandvik or Caterpillar.
Digitalization in mining will grow because of its potential to improve yield, safety and sustainability. Entering the space now puts Shell in a position to capture market share as technology adoption accelerates.
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