Schlumberger has become the biggest oil-service industry player yet to abandon frac work in North America, a sign that activity in the U.S. shale patch may never revisit previous highs, according to Bloomberg.
The provider of drilling and oil-production equipment agreed to sell its U.S. and Canadian fracturing business to smaller rival Liberty Oilfield Services Inc. After similar exits over the past few years by Baker Hughes Co. and Weatherford International Plc, Halliburton Co. is now the sole global provider of well completions for shale, and even Halliburton has said it’s looking overseas for better growth.
For Schlumberger, the world’s top oilfield-services company, the deal is a massive reversal from its North American buying binge over the past few years, which added frac-sand mines, artificial-lift technology and Weatherford’s frac fleet.
For Liberty, meanwhile, buying Schlumberger’s OneStim unit in exchange for a 37% stake in the company means the oilfield contractor will more than double the size of its frac fleet in a market that has sidelined three-fourths of U.S. crews this year.
“The Covid pandemic has thrown the world for a loop, bringing serious threats to our industry,” Chris Wright, chief executive of Denver-based Liberty, told analysts and investors on a conference call. “But these dark hours are most fertile for opportunity.”