With the price of crude oil still languishing, the oil services industry is seeing orders dry up. Backlogs have been cleared, but new orders appear few and far between. As capital expenditure on oil and gas exploration and production has been slashed, so, too, have been the rates that oil services companies can charge for the work they do.
Should current price levels for crude oil persist, the existences of some oil services companies may start to become somewhat precarious. Others, on the other hand, may see opportunity. Amongst the largest, Halliburton is seeking to acquire Baker Hughes, and Schlumberger, Cameron. The current landscape will, however, probably change significantly. And, while already important, the cost benefits to be derived from advances in technology will likely become ever more important.
WTI Spot Price: 20 Oct 2014 – 20 Oct 2015 (USD)
Source: Bloomberg
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