Pre-Fabrication Company Calls the Marcellus' Bluff
Even among the northeastern shale basins, the “lower for longer” downturn is still packing a wallop to the oil and gas industry. Within the last four months, almost 25,000 jobs in the Marcellus basin have been obliterated, according to the Marcellus Shale Coalition.
Perhaps most alarming is that the bulk of those jobs are not temporary gigs filling in at Mom-and-Pop start-ups, rather, it is operations at the larger exploration and production (E&P) companies – including Chevron Corp. and Noble Energy Inc. – that have been interrupted by per-barrels oil prices that don’t justify the production cost.
In fact, those smaller shops might have an advantage the mid-cap companies haven’t had either the balance or the incentive to pursue.
Despite the hardships throughout oil and gas, some companies have learned to diversify. Super majors have known this for years, and what’s more, they tend to that have the bandwidth to dip their toes into a number of spots in the supply chain. But as it turns out, smaller independents can also make it a successful approach.
Ron and Faith Clark have a history firmly rooted in the middle of Pennsylvania shale country. While it’s easy to find folks in the state who will gush over the abundance brought about by the mighty Marcellus, that’s not the case at Clark Technology Systems Inc.
The company, formed in 1990 when the husband and wife team bought $25,000 in prefabrication equipment, already had a steady supply of work with about 80 percent of it coming from energy majors.
And once the Marcellus showed off what it had hidden, new companies came in droves to make money off the basin.
“We would exist better without the Marcellus,” Ron Clark told Rigzone. “When Marcellus came in, everyone and their brother started all these businesses. That just ends up being more competition. The Marcellus was the worst thing that happened.”
He explained that all the competition has pushed some companies, mostly the smaller equipment suppliers into the dust because each one has dozens of companies vying for the same work.
“With the downturn, all the fabricators started stealing each other’s work,” he said.
The roar of the Marcellus did change the playing field, Faith Clark said, especially for those companies in the north and middle parts of the state. But if they were far south enough, their work was already steady based on projects outside of the Marcellus and employees still had work.
“We made the decision not to go after Marcellus, but to go after the work of other companies that needed products because all of the fabricators went to the Marcellus,” she said.
Still, Clark has cultivated contract work for its services at major oil companies, such as Chevron, and others.
“Everything we build is going into a refinery or a petrochemical refinery somewhere, all over the world,” she said.
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