O&G Services Firms Target Small Companies
for Growth

April 23rd, 2010 • Filed Under
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From Reuters

Cash-rich large oilfield service companies have been snapping up smaller rivals as they move to broaden their product lines, and may now be setting their sights on niche players to help them move deeper into new markets around the globe.

Deals

With companies pushing the boundaries of technology and the cost of discovering oil and gas having risen three-fold over the past decade, the need for bundled services have risen. “National oil companies do outsource to big one-stop shops and so companies like Schlumberger and Halliburton would look to provide that,” a portfolio manger, who oversees investments in a number of oil services firms told Reuters.

The shopping started last year when Baker Hughes (BHI.N) bid $4.8 billion for BJ Services. This year, sector leader Schlumberger Ltd (SLB.N) coughed up $11.3 billion for Smith International and $1 billion for France’s Geoservices. Earlier this month, Halliburton (HAL.N) bid $240 million for Boots & Coots.

“Somebody who has got four pieces would want to add two more to complete the picture,” said the New York-based fund manager, who did not wish to be named.

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