Tech firms ramp up efforts to woo the energy industry
A Hotel in Houston teemed with oil-and-gas executives on March 11th, the start of a CERAWeek. IHS Markit, a research firm which organised the shindig, lined up America’s energy secretary, the chief executives of BP and Chevron (two of the world’s largest oil companies), and other luminaries. Among the dark suits was an open-collared newcomer: Andy Jassy, head of Amazon Web Services. Speaking to a vast ballroom, he extolled the cloud-computing giant’s virtues of moving quickly and learning from failure. Mr Jassy was there not just to offer management advice to what were once the world’s most valuable companies. He was also after their custom.
Energy companies are keen to produce oil and gas more efficiently, as they grapple with volatile prices and uncertain long-term demand. Digital investments promise to cut costs and boost output. Tech giants like Amazon, Microsoft and Alphabet, as well as a clutch of startups, want to help. For all of Silicon Valley’s professed support for clean power over fossil fuels, the energy industry represents a huge opportunity. Oil companies’ valuations are dwarfed by tech firms’, but their coffers remain deep (see chart).