DW Comments on Recent Developments in Global Oilfield Services Sector
Douglas-Westwood (DW), an energy business strategy, research and commercial due diligence services provider, commented Monday that amidst the gloomy days of August when Brent crude oil prices bottomed out at $42 a barrel, the acquisition of Cameron by Schlumberger ($14.8 billion) took place as one of the largest mergers in the oil patch, following the tie-up of Halliburton and Baker Hughes ($32 billion) in November 2014. This consolidation has resulted in an integrated service & equipment provider covering the full oil & gas lifecycle from reservoir to first flow.
Our latest research suggests that the Global Oilfield Services sector will face a 36 percent decline in expenditure in 2015, prompting industry players to cut costs and reposition themselves through shedding underperforming/non-core business units. Prior to the Cameron merger, Schlumberger had already cut 15 percent of its workforce while the former had been consolidating business lines since 2014, selling several business units to GE and Ingersoll Rand, and subsequently the Letourneau jackup designs, rig kits and aftermarket service businesses to Keppel in late August 2015.
This move suggests a strategic intention towards integration of equipment and service/engineering to improve on efficiency and cost effectiveness of field development. The market will be watching closely for the reaction to the ‘pore-to-pipeline’ proposition. Is this the future? Or is it taking the ‘one-stop-shop’ approach too far?
WHAT DO YOU THINK?
- Top Oilfield Services Firms Signal Fourth-Quarter Uncertainty (Oct 20)
- Schlumberger's Latest Asset Deal Raises Fresh Concerns Ahead Of 3Q (Oct 19)
- Offshore Start-Up Borr Drilling Aims To Expand Fleet, Keep Costs Low (Aug 30)
Company: Cameron Corporation more info
- Keppel O&M Completes Acquisition of Cameron's Offshore Product Division (May 03)
- EU Clears Acquisition Of Cameron By Schlumberger (Feb 05)
- Cameron Stockholders Vote Yes to Schlumberger Merger (Dec 17)
Company: Douglas-Westwood more info
- DW Comments on Iran-Saudi Arabia Tensions and the Impact on Oil Price (Jan 08)
- Douglas-Westwood Provides Outlook for Offshore Industry in 2016 (Dec 28)
- Douglas-Westwood Estimates $68B Investment in FPS Units in 2015-2019 (Nov 04)