Jeff Miller, the chief executive officer of Halliburton, thinks the U.S. oilfield service sector is heading for a wave of consolidation.
Speaking at the Barclays CEO Energy-Power Conference in New York on September 4, Miller said service providers are feeling the pinch because upstream operators are spending less. Under current market conditions, he said, exploration and production companies want to reduce their outlays on service contracts, especially when efficiencies are difficult to achieve and productivity gains slow.
Because of these developments, struggling companies are more likely to get caught up in a rush towards consolidation, he argued. He also speculated that the slow-down in U.S. shale projects would make pressure-pumping service providers particularly vulnerable to M&A campaigns.
If this scenario comes to pass, Halliburton will probably remain on the sidelines and focus on optimizing its existing assets, Miller added. “Building is cheaper for us,” he remarked.