Oil & gas merger
28 Feb 2010
Schlumberger, the world’s largest oil services group, has acquired Smith International in an all-share deal valued at $12.4 billion (£8bn).
The takeover of the oil & gas industry products and services supplier is said by Schlumberger to be in response to the growing requirements for increased levels of drilling to sustain and increase world oil and gas production. Increasingly, there is a need to drill wells in more challenging environments and Smith’s drilling technologies and expertise will complement the measurement and steering expertise of its new parent.
“The next breakthrough will be through engineered drilling systems that optimise all the components of the drillstring,” explained Schlumberger chairman and CEO Andrew Gould. “This step-change in drilling performance and well productivity must come from combining measurement and steering capabilities with the engineering and design of the complete bottom-hole assembly.”
The downturn in the oil services industry has driven the merger of the two companies as their respective values would likely to have been out of alignment at the top of a cycle. Their combined capabilities will enable greater exploitation of resources such as shale gas and deep water fields.
Schlumberger employs 77,000 people and had revenues of $22.7bn last year. Smith had a turnover of $8.2bn, employing 21,000.
