Eying digital push, Schlumberger strikes cloud-computing deal with IBM

DENVER, Sept 8 (Reuters) - Top oilfield service provider Schlumberger NV said Tuesday it will tap technology from International Business Machines Corp to bring oilfield software to countries such as Saudi Arabia and Russia that have strict data sovereignty laws.

Schlumberger develops software called Delfi that energy producers use to locate and extract oil more efficiently. The company is shifting toward delivering Delfi from cloud-based or distributed servers, tapping providers such as Alphabet Inc’s Google and Microsoft Corp.

Some countries, however, do not have any data centers offered by those public cloud providers and have laws requiring data to be stored locally. That means Schlumberger’s cloud-based software must be run on a locally run, private data center, or on a “hybrid” of public clouds and private data centers.

Under the deal announced Tuesday, Schlumberger will use an IBM technology called Red Hat OpenShift to make such hybrids work easier.

IBM’s technology forms a layer between Schlumberger’s Delfi software and the data centers where the software runs that allows the software to move back and forth to wherever customers need it.

“We have realized in the last few quarters, last few months that we didn’t have the flexibility,” Schlumberger CEO Olivier Le Peuch told Reuters in an interview. “It has helped us expand the market access and expand the reach of our solution.”

The data-heavy oil and gas industry has long been seen as slow to digitalize but in recent years has made a push to utilize cloud computing, artificial intelligence and internet-of-things technology in its operations.

For IBM, the Schlumberger deal gives it a flagship oil-and-gas customer as it refines its cloud computing strategy, part of which has involved helping customers in fields such as financial services solve thorny technical and regulatory challenges.

“The technology, once it’s in production, is what drives revenue for both of us,” IBM Chief Executive Arvind Krishna told Reuters. (Reporting by Liz Hampton in Denver and Stephen Nellis in San Francisco; Editing by Lisa Shumaker)