Halliburton Branches Into Data Centers as Frack Demand Slows
World’s Biggest Fracker Has Sealed Deal With VoltaGrid
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Halliburton Co. is diversifying into data center power generation amid slackening worldwide demand for oil field fracking.
The world’s biggest fracker has sealed a deal with VoltaGrid to provide electricity generation to data centers, marking the company’s first major foray into powering the booming artificial-intelligence sector. The venture, initially focused on the Middle East, will provide turbines, reciprocating engines and proprietary VoltaGrid technology to data center developers, the companies wrote in a statement.
Halliburton ranks No. 8 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 1 among petroleum and chemical carriers.
Halliburton rose as much as 12% for the biggest intraday advance in more than five months. The stock was buoyed both by strong third-quarter results released earlier Oct. 21 as well as the AI-power venture, analysts said.
“Data center collaboration with VoltaGrid is a surprise and likely more impactful to stock” than better-than-expected earnings, Marc Bianchi, a TD Cowen analyst, wrote in a note to clients.
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Halliburton, which before now had been mum on data center opportunities, follows oil field competitors Baker Hughes Co., SLB and Liberty Energy into the burgeoning industry. For its part, Liberty has surged more than 30% in the past four trading sessions since announcing plans to vastly expand its mobile power-generation unit. Baker Hughes ranks No. 26 on thepetroleum and chemical carriers sector list.
“The demand for power and for AI is like nothing I’ve ever seen,” Halliburton CEO Jeff Miller told analysts and investors during an Oct. 21 call.
With oil pricesslumpingin the face of a looming global supply glut, prospects for oil field contractors are dimming from shale fields and deepwater drilling to wildcat exploration. Executives have alsowarnedthat blistering tariffs are squeezing them with soaring costs. Halliburton said spending by North American oil clients is below so-called maintenance levels, or the minimum investments required to prevent crude production from declining, Miller said.
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