Oilfield Services Industry Analysis
2014
Team 2: Oilfield Services Industry Analysis
Oilfield service companies have had a stronghold in the drilling industry since the advent of directional drilling and hydraulic fracturing. While the former was first used on production well sites in the late 1940s, the latter was invented in 1947 by Floyd Farris and J.B. Clark. However even with these technologies being available as early as the 1940s, the first real commercially repeatable systems was used in the 1990’s, pioneered by George Phydias Mitchell.
An oilfield service company is generally broken into the following segments: seismic imaging, drilling, characterization, completions, subsea, production, well intervention and well testing. Although oilfield services do have some overlaps within the oil and gas industry in areas such as, equipment, procurement and construction firms (EPC firms), software application development firms and international consultancies. The oilfield services industry also enjoys a global demand, with mid-major oilfield service firms competing domestically, with onshore land based operations and production. While the majors are truly global, including, Halliburton,
Schlumberger, Baker Hughes and Fluor, mid-major companies do not have the capital to do so.
Using the Porters Five Forces Model and Stakeholder Theory an evaluation of the industry from a holistic perspective follows (Refer to Appendix B for a diagram of the analysis)
Bargaining Power of Buyers
The buyers from oilfield services companies are Oil and Gas Exploration and Production
(E&P) companies and are generally divided into three distinct segments. The first segment is the
Multinational Integrated Oil and Gas Companies (the majors), comprising upstream (E&P), downstream (refineries and trading) and midstream (pipelines) and operating units. The majors include firms such as Exxon, British Petroleum (BP), Chevron and Shell. The second segment is comprised of National Oil and Gas companies
Team 2: Oilfield Services Industry Analysis
Oilfield service companies have had a stronghold in the drilling industry since the advent of directional drilling and hydraulic fracturing. While the former was first used on production well sites in the late 1940s, the latter was invented in 1947 by Floyd Farris and J.B. Clark. However even with these technologies being available as early as the 1940s, the first real commercially repeatable systems was used in the 1990’s, pioneered by George Phydias Mitchell.
An oilfield service company is generally broken into the following segments: seismic imaging, drilling, characterization, completions, subsea, production, well intervention and well testing. Although oilfield services do have some overlaps within the oil and gas industry in areas such as, equipment, procurement and construction firms (EPC firms), software application development firms and international consultancies. The oilfield services industry also enjoys a global demand, with mid-major oilfield service firms competing domestically, with onshore land based operations and production. While the majors are truly global, including, Halliburton,
Schlumberger, Baker Hughes and Fluor, mid-major companies do not have the capital to do so.
Using the Porters Five Forces Model and Stakeholder Theory an evaluation of the industry from a holistic perspective follows (Refer to Appendix B for a diagram of the analysis)
Bargaining Power of Buyers
The buyers from oilfield services companies are Oil and Gas Exploration and Production
(E&P) companies and are generally divided into three distinct segments. The first segment is the
Multinational Integrated Oil and Gas Companies (the majors), comprising upstream (E&P), downstream (refineries and trading) and midstream (pipelines) and operating units. The majors include firms such as Exxon, British Petroleum (BP), Chevron and Shell. The second segment is comprised of National Oil and Gas companies
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