Schlumberger Ltd. and frequent partner Cameron International Corp. agreed Wednesday to merge in a deal estimated to be worth $14.8 billion, combining complementary technology portfolios that they said would be the industry's first "complete" drilling and production systems.
The transaction between the world's No. 1 oilfield services company, with principal offices in Houston and Paris, and Houston-based Cameron would create a "pore-to-pipeline" products and services company. Cameron, whose portfolio spans upstream to downstream markets, reported $10 billion-plus in revenues for 2014. On a proforma basis, the combined company had 2014 revenues of $59 billion. Schlumberger valued the deal at $14.8 billion, while independent reviews set the value on Wednesday at closer to $12.7 billion.
"This agreement with Cameron opens new and broader opportunities for Schlumberger," Schlumberger CEO Paal Kibsgaard said. Last summer, before oil prices plummeted, Kibsgaard had highlighted how the exploration and production industry had to transform to deliver increased performance at a time of range-bound prices (see Daily GPI, June 26, 2014). Last month he also said the recovery in North America was months away (see Daily GPI, July 17).
"With oil prices now at lower levels, oilfield services companies that deliver innovative technology and greater integration while improving efficiency, which our customers increasingly demand, will outperform the market."
The world's No. 2 and No. 3 global oilfield operators Halliburton Co. and Baker Hughes Inc. last year agreed to a $35 billion merger, which is scheduled to be completed later this year (see Daily GPI, July 13; Nov. 17, 2014).
"We believe that the next industry technical breakthrough will be achieved through integration of Schlumberger's reservoir and well technologies with Cameron's leadership in surface, drilling, processing and flow control technologies," Kibsgaard said. "Deep reservoir knowledge further enabled by instrumentation, software and automation, will launch a new era of complete drilling and production system performance."
The combination also would "achieve significant efficiency gains through lowering operating costs, streamlining supply chains and improving manufacturing processes while leveraging the Schlumberger transformation platform."
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