American Oilfield Services Company Turns Its Gaze to the Middle East
On the eve, the American drilling rig manufacturer Helmerich & Payne announced plans to acquire British competitor KCA Deutag International Ltd., which has enough projects in the Middle East. Helmerich & Payne is not one of the “big four” oilfield services companies, for it the acquisition of a company for $1.97 billion with its capitalization of $4 billion is a risky bet, but the company is taking this risk.
Bloomberg observers see such actions by Helmerich & Payne as the beginning of a trend. In the United States, oil and gas production has reached historical highs, and a wave of mergers and acquisitions among shale companies has reduced the number of drilling rigs to the lowest level since 2021. “U.S. shale drilling activity appears to have peaked,” Bloomberg writes.
Expansion of drilling operations continues in the US Permian Basin and in New Mexico, unlike other shale formations. But even in the largest oil basin in the United States, Bloomberg Intelligence estimates growth this year at only 2%. While in the Middle East, according to Helmerich & Payne, drilling growth will be 9% annually until 2026.
It is not only Helmerich & Payne – the Big Four players SLB and Halliburton also believe that demand is higher in foreign markets, for example, in Saudi Arabia, and work there can compensate for the weakness of the US oilfield services market.
“If you want to succeed in the US, you need to be in the Permian. And if you want to succeed globally, you need to be in the Middle East,” said Helmerich & Payne CEO John Lindsay.
