Partnership between New Schlumberger & Weatherford
chlumberger Ltd. and Weatherford International Plc are forming a joint venture aimed at taking on the king of fracking, Halliburton Co.
Schlumberger, the world’s biggest oil-field service provider, will own 70 percent and be the operator of the hydraulic fracturing partnership, to be known as OneStim, the two companies said Friday in a joint statement. Weatherford, the No. 4 oil-field servicer, will own 30 percent and receive a one-time cash payment of $535 million. Halliburton is the world’s largest provider of fracking services.
Fracking, in which service companies blast water, sand and chemicals underground to release trapped hydrocarbons, has been one of the most battered businesses in the oil patch during the two-year market downturn. Weatherford said in February it had shut down its fracking unit and would sell the business after profits evaporated.
The new joint venture, expected to close in the second half of the year, will bring Schlumberger closer to its chief rival, Halliburton, which has a total fleet of fracking pumps that add up to 3 million horsepower, according to Spears & Associates, a Tulsa-based oil-field consultant. Schlumberger currently has about 2 million horsepower, while Weatherford has an estimated 800,000 to 1 million.
"They would be on par with Halliburton in terms of horsepower," Richard Spears, vice president at Spears & Associates, said Friday in a phone interview. "I wouldn’t put them on par with Halliburton in terms of revenue, because Weatherford isn’t bringing any business to them. It’s just trucks."