National Oilwell Varco, Schlumberger Team Up (NOV, SLB, BP)
One oilfield services giant, Schlumberger (NYSE:SLB), and one large oilfield services and well manufacturing company, National Oilwell Varco (NYSE:NOV), have announced plans to form a joint venture focused on intelligent well-drilling. National will own 55% of the venture and be the operator. Schlumberger will own 45% and provide expertise in drilling technology.
The new JV uses National’s data-capturing downhole tools to providedrillers with “more accurate knowledge of the drilling environment andformation parameters.” Drillers will better be able to determine theprobability for success for based on virtually real-time data on thegeology and the well’s position inside the reservoir.
This is all great, but cutbacks in exploration could doom the venturebefore it starts. For example, BP plc (NYSE:BP) announced yesterdaythat it was suspending work on a $120 million gas processing plant itwas building on the Alaskan North Slope. The company cited rising costsand falling crude prices for the delay.
Schlumberger’s share price dipped nearly 6% yesterday, while National’sprice fell about 10%. The joint venture is not likely to turn thatslide around.
November 20, 2008