Critical Thinking 6

Halliburton

By

Sam Speak

Intro

Halliburton has positioned itself in the Rocky Mountain Region (Colorado to North Dakota) over the last 3 years as a large, reliable company with superior oilfield service capabilities (Go Further, Faster) primarily in Production Enhancement, or frac. During the recent boom, it has captured a majority market share and set itself up well for the coming years in retaining it.
The Market* Oilfield is a very dynamic industry, fluctuating widely with the price of crude oil and technology (Williams, 2011). It is these large fluctuations that have led to the boom-and-bust nature of the business, including the recent boom in North America thanks to elevated prices and hydraulic fracturing technology. Unlike most other industries, this instability in oilfield has elevated the importance of readiness and mobility. In coal mining, for example, coal is often found in one area, has a relatively constant price, and can be mined in one or several locations for many years. The company that mines the most efficiently generally wins. Oil is different-it flows, for one thing. Once leases are open to purchase, companies rush in to buy up land, and punch as many holes along the edges of those leases as possible, before their neighbors do the same thing and drain some of their reserves. (This occurs less readily in tight reservoirs) A drilling rig is rarely on one land well for more than several weeks, let alone years. Thus, the company that offers their services the soonest, punches the holes the fastest, or completes the most fracs usually wins.

The Competition Halliburton has a number of competitors in the Rocky Mountain Region, chief among which are Schlumberger and Baker Hughes. All offer a similar range of services, and globally Schlumberger is still the market leader in oilfield services (GN Solids, 2011).