Mergers and acquisitions, it seems, are like buses.
Industry analysts – and employees – waited 18 months for Halliburton and Baker Hughes to conclude talks, agree terms and negotiate anti-trust hearings, only for these ultimately to scupper the deal. Indeed, Deputy Assistant Attorney General David Gelfand with the US Department of Justice’s Anti-trust Division argued that the merger would have “raised prices, decreased output and lessened innovation in at least 23 oilfield products and services critical to the nation’s energy supply.
”Given the long wait, and the rollercoaster of oil prices in the meantime, the value of the deal had declined to around US$28 billion by the time it was scrapped.Yet another flurry of activity – and some speculation – saw a raft of deals arrive all at once in these past few weeks.
Most notably, FMC Technologies and Technip announced their intention to combine to create TechnipFMC, a US$13 billion company described by the two as “a leader in subsea, surface and onshore/offshore, driven by technology and innovation.” In some ways it is unsurprising – the deal builds on the work of Forsys Subsea, the firms’ joint venture launched in 2015, which aimed to maximise cost and efficiency by bringing engineering teams together as early as possible during subsea projects.
We can deduce that the experiment was a success.Moreover, its creation marks the new company’s entry to the “big league” of oil services, as some analysts have put it, and a partnership capable of challenging the Big Three firms.
News of a US$4.4 billion takeover of the US’ Memorial Resources by Range Resources broke on May 16. Meanwhile, whispers abound – the latest being a rumoured bid for Apache by Occidental Petroleum, albeit one of which both companies have denied any knowledge. All this has commentators tentatively speculating that more mergers are on the cards, potentially signalling a turning point if buyers now anticipate a price rebound. It is by no means conclusive, but it does mark the end of a prolonged period of little action in the market.From an innovation perspective, new collaborative agreements and corporate models are as encouraging as new equipment.
This month we speak to Exceed, which aims to offer just such a model in order to become a decommissioning “one-stop shop.” The company’s commercial director, John Anderson, tells us more in our decom-focused supplement.If you prefer your innovations robotic, x-ray emitting or face-meltingly hot, we still have plenty of that too.
This month, Norway’s Eelume unveiled a snake-like subsea robot for use in subsea IMR, both the most interesting and most terrifying thing we have seen this year.
Visuray also shows us how to see inside wells with x-ray imaging, and we explore Interwell’s thermite-based solution for plugging and abandonment.
All this, as well as temperature monitoring from LumaSense Technologies, the importance of cybersecurity, rigless P&A solutions and more…The team and I are pleased to present the June edition of InnovOil.