SOURCE: Rothman Research

Rothman Research

April 09, 2010 08:41 ET

Tapping the Interest in Shale-Gas by Oil Services Titans

JOHANNESBURG, SOUTH AFRICA--(Marketwire - April 9, 2010) - www.rothmanresearch.com -- Since 2000, United States has lead the course in shale-gas exploration, drilling and production sparking interest in other industrialized nations as it made an economic success out of this venture. The U.S. has seen its natural gas reserve surge significantly, since the turn of this century, and this has been possible due to great advancements in hydraulic fracturing and horizontal drilling technologies. Furthermore, the shale-gas rush has transformed the energy landscape, driven Western oil companies' ambition to new growth and brought some major restructuring in the oil services industry. This rush has sprung a number of M & A activities in the oil services energy emerging from the top players like Baker Hughes, who recently acquires BJ Services for $5.5 billion, and Schlumberger's $11 billion takeover bid for Smith International Inc. (NYSE: SII). 

*Direct & free downloadable report on Smith International Inc. is available by signing up now at http://www.rothmanresearch.com/article/sii/23405/Apr-09-2010.html  

Schlumberger, the industry's premier, is aiming to secure access to superlative shale-gas technology just like Baker Hughes' acquisition of BJ Services gave it control over BJ's pressure-pumping technologies and other services that would be crucial for shale-gas exploration and drilling. "Actions speak for themselves; you are not going to see these kind of strategic moves unless the stake is highly lucrative... right now the titans of this industry are at daggers drawn to maximize their presence and stature.... Baker Hughes, third largest in the space... Schlumberger, the leader... and if there was any doubt about Halliburton Co. (NYSE: HAL), the industry's crowned prince, it should be said that in the shale-gas business it already has a head-start with some micro takeovers in the past, making it the principal provider of shale-rock pressure pumping services," commented Jack Benassi of www.rothmanresearch.com 

*Complimentary downloadable research on Halliburton Co. is accessible upon registration at http://www.rothmanresearch.com/article/hal/23406/Apr-09-2010.html  

The one main challenge, however, remain the negative environmental externalities specifically stemming from hydraulic fracturing which is overwhelmingly unpopular with eco-friendly activists. One of their most abrupt claims is that some chemical components of fracturing fluids, if leaked, can have devastating effects on aquifers and underground water sources. Efforts have been made by the government to regulate the fracturing fluids chemical composition, but a number of companies have been caught in breach of those regulations.

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