The combination of NOCs restricting access to easier-to-reach reserves, elephant-sized field potential and technological improvement has made deepwater development a critical source of international and national oil company growth in some portions of the globe. Additionally with the push to conquer more challenging reservoirs (deeper, higher pressure and temperature wells), more robust and expensive equipment and services are needed.
Additionally, operators are frustrated with some of the quality assurance /quality control inadequacies of existing service providers creating an opening for those who can provide superior service to capture market share.
Meanwhile oilfield services M&A activity has plunged to its lowest level since 2005 due to a lack of available debt capital and high volatility in valuations within the sector. As a result, oilfield service company valuations are at near record lows relative to replacement costs and Net Asset Values (NAVs).