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Oilfield Services Looking Beyond Oil and Gas

Traditionally, major oilfield service contractors such as Baker Hughes, Saipem and Halliburton focused on upstream drilling, well and seismic services. However, just as BP, Shell and Total have diversified into power generation and distribution and renewable energy storage, so oilfield service contractors have followed suit.  

According to consultants Rystad Energy, oilfield service contractors’ share of revenues from non-upstream activities rose from 22 percent in 2014 to 27 percent in 2018 and could even be higher. According to Audun Martinsen, head of oilfield services research at Rystad Energy, “if pure-play contractors within drilling, well services and seismic – which have little to offer outside the upstream oil and gas industry – are removed from the equation, activities outside of upstream accounted for nearly 30 percent of last year’s revenues.”

The reasons for diversification

Anticipated improvements in energy efficiency, increased penetration of  renewable energy, the coming electrification of transport and government promises of a low carbon economy by 2050, have combined to bring forward anticipated peak demand for oil and gas as soon as the late 2020s. Quite naturally, both oilfield contractors and oil and gas companies are reacting to these market trends. Read more

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