Oil company technology suppliers are shifting to data centers

Companies supplying infrastructure to oil companies have begun to turn to data center infrastructure. They are banking on this technology to drive their next phase of growth and help transform their businesses. They are doing so as demand for drilling services slows in the US markets.

With oil prices falling to around 60 dollars per barrel, US oil producers are also cutting their exploration budgets. The price of US oil is under pressure from OPEC, significantly affecting investment in the sector. On the other hand, energy demand continues to grow, not only in the US but around the world, and one reason is the increase in consumption associated with the expansion of artificial intelligence.

Leading global oilfield equipment suppliers such as SLB, Halliburton and Baker Hughes have recently joined the trend of supplying power equipment, turbines and data solutions to meet rising demand for computing capacity.

Baker Hughes is seeing strong growth in its industrial and energy technology segment, which includes gas turbines, power grids and digital platforms. The unit recorded more than 4 billion dollars in new orders in the third quarter, taking its backlog to a record 32 billion dollars.

Large data centers use these turbines to generate power, while the Cordant Asset Health platform helps monitor the availability and efficiency of entire systems. Baker Hughes has already recorded orders this year for 1.2 gigawatts of data center solutions.

Halliburton, meanwhile, is relying on a partnership with Texas-based gas power technology supplier VoltaGrid. The companies will jointly invest in international projects, starting in the Middle East.

“The demand for energy and AI is something I’ve never experienced before,” said Jeff Miller, Halliburton’s chief executive.

SLB has established a standalone digital division, which is now its fastest-growing business. The unit focuses on cloud and AI software, automation tools for remote operations, seismic data services and digital consulting to help clients modernize and migrate to the cloud.

SLB reported an 11% quarter-on-quarter increase in digital revenue for the three months ended September 30, with annual recurring revenue reaching 926 million dollars.
The company also offers data center infrastructure solutions.