The increasing complexity of today’s drilling process places considerable attention on the role of drilling contractors. However, there are drilling-related services not traditionally provided by drillers that play an equally important role in determining the quality and profitability of a well.
For the purposes of EnergyPoint’s independent surveys, these other services fall into five segments: drilling fluids, fishing, cementing, directional drilling and measurement-while-drilling (MWD). Generally speaking, survey results suggest customers have high regard for the drilling-related services they provide. In fact, the category’s customer satisfaction scores have outperformed EnergyPoint’s broader index of oilfield products and services since 2004.
It’s when we drill down into the details that disparities emerge. Looking at customer satisfaction ratings for each of the five offerings comprising drilling-related services, we note that directional drilling and MWD services sit at the bottom of the group. While numerous factors likely explain this, we believe a couple of key issues are at work:
First, both directional drilling and MWD have undergone relatively rapid uptake. This is the result of several trends, including i) the need for greater productivity in the drilling phase to offset the shrinking size of wells; ii) the industry’s ability to pinpoint and exploit smaller—but still commercially viable—pockets of hydrocarbons; iii) and the increased use of horizontal drilling for unconventional wells. Unfortunately, this rapid growth has hurt service quality, especially compared to more staid segments like drilling fluids, fishing and cementing services.
Second, is the nature of the services themselves. Both directional drilling and MWD are drilling-related. This means greater interaction with and dependence upon third parties. External factors such as drilling contractors, rigs, and bottom-hole assemblies also come into play. In other words, multiple inputs must be in sync to achieve top performance. This may not be the fault of the service segment itself, but rather, a result of kinks along the supply chain.
Predictably, suppliers with little or no exposure to directional drilling and MWD segments tend to rate higher within the category. M-I SWACO, one of the industry’s more dominant and focused suppliers of drilling and completion fluids and services, rates first in drilling-related services since 2006. Pressure-pumping specialist BJ Services rates second.
It’s a different story for the integrated players. Although Halliburton rates near average, Schlumberger, Baker Hughes and Weatherford fall below the mean.
In terms of the offerings themselves, the more mature segments—drilling fluids and fishing services—score highest with customers.
