Petrofac, the UAE-based EPC firm, is to team up with drilling and oilfield services giant Schlumberger, to win mammoth projects from national and international oil companies.
The companies will now look to bid jointly on major projects, as 2012 promises to be a boom year for exploration and production spending.
The news follows rumours late last year that Schlumberger was looking to acquire all or part of Petrofac. London-listed shares in Petrofac rose over 2% on the news, with Schlumberger’s short-dated share futures posting gains ahead of the opening of the New York Stock Exchange.
In a joint company statement announcing the co-operation agreement, Petrofac and Schlumberger say that Petrofac’s Integrated Energy Services division – launched to much funfair last year and headed by ex-BP executive Andy Inglis – and Schlumberger “will establish a working relationship to deliver integrated and high-value production projects in the emerging and growing production services and production enhancement market.”
Inglis, commenting in the joint statement, said: “Petrofac has always sought to partner selectively with companies that enable us to enhance our service offering to customers, and with Schlumberger we are able to combine our capabilities with those of a world leader in the subsurface domain with an unrivalled track record for technological innovation. The creation of this framework will enable us to bid jointly for projects of a scale that we would not pursue independently, and to develop them at a much faster pace. Petrofac and Schlumberger have a common approach and I am tremendously excited by the scope of the opportunities we see for our combined capabilities.”
Petrofac says the companies will not aim to capitalise any oil production, but will instead continues current charging structures. This could be particularly attractive to national oil companies in the Middle East, which often require a broad base of expertise for projects but are wary of – or constitutionally-constrained from – granting proprietary interests in oil often required by international oil companies.
The two companies already both work at the 1.24 million barrels per day Rumaila field in Iraq, where Schlumberger has been investing around $100 million annually in drilling and Petrofac has been conducting operations and maintenance support.
