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Oil and gas companies have looked beyond their own sector to diversify revenue streams, most notably in power. Now they are using digital technology expertise as another way to build new revenue.
Shell and BP are two leading examples. Shell estimates that digital tools will contribute to one-fifth of its commercial revenue growth by 2025. BP has spun off its seismic analytics technology, which has achieved $100 million savings for the company, among three other startups in its portfolio.
The two companies have different approaches. Shell uses digital technology to create complementary services for existing customers, boosting downstream sales. BP sells technologies to oil peers and other industries such as construction and smart cities, creating new revenue decoupled from its usual clients.
As oil majors struggle with a demand crisis, diversifying into selling technology expertise could be one way forward. We would expect oil firms to sell software they have proven internally, to smaller peers and companies in emerging markets.
