Schlumberger, Cameron Ink Subsea Joint Venture

Oilfield service companies Cameron and Schlumberger announced Thursday they have formed the OneSubsea joint venture (JV) to manufacture and develop products, systems and services for the subsea oil and gas market.

Cameron and Schlumberger will hold 60 percent and 40 percent interests in the JV, through which the companies will offer a step change in reservoir recovery for the subsea oil and gas industry through integration and optimization of the entire production system over the life of the field.

"This new joint venture, which combines the forces of two world-class companies, is uniquely positioned to optimize complete subsea production systems and help our customers improve production and recovery from their subsea developments," said Schlumberger CEO Paal Kibsgaard in a statement.

"The broad scientific and technology platform that Schlumberger brings will enable a total system approach, leading to a unique and differentiated offering in this rapidly growing market," Kibsgaard noted.

Cameron Chairman, President and CEO Jack B. Moore said in a statement that the joint venture with Schlumberger "provides a power marriage of their oilfield services technology and our subsea equipment heritage. It leverages Cameron's flow control expertise, world class manufacturing and aftermarket capabilities."

The agreement calls for Cameron to contribute its existing subsea division and receive $600 million from Schlumberger, while Schlumberger will contribute its Framo, Surveillance, Flow Assurance and Power and Controls businesses. Cameron will manage the joint venture and will consolidate it for financial reporting purposes. Cameron will reflect minority interest in its financial statements for Schlumberger's interest in the JV.

The combination of Cameron's subsea equipment franchise and Schlumberger's services capability should strengthen Cameron's already formidable position within the subsea competitive landscape, according to a Nov. 15 GHS Research analysts note.

"If Schlumberger can successfully leverage its reservoir characterization and completion capabilities to materially enhance recovery factors subsea, this joint venture may ultimately enhance Cameron's share of the most complex full field subsea development projects," GHS said.

In September, Schlumberger had unveiled plans to expand into the subsea market at the Barclays Capital Energy CEO Conference. Barclays analyst James C. West noted that Schlumberger's joint venture with Cameron would create a powerful force in the subsea processing market.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com

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