(Reuters) - Oilfield services provider Baker Hughes Inc (>> Baker Hughes Incorporated) said on Thursday it was in preliminary merger talks with larger rival Halliburton Co (>> Halliburton Company).
A combination would help the companies better cope with weak oil prices. Global crude oil prices have slipped from over $100 in June to less than $80 this week amid excess supply and tepid demand growth.
Despite the market share boost that a tie-up of the No. 2 and No. 3 oilfield companies would bring, the combined entity would only be about half the size of market leader Schlumberger NV (>> Schlumberger Limited.).
Below is a breakdown of the market share of the top three oilfield companies in various services, according to data from Spears and Associates and Cowen and Co.
Company Units Service description Halliburton Baker Hughes Combined Schlumberger
Cementing Preparing and pumping 35 pct 16 pct 51 pct 27 pct
cement into a wellbore to
prevent leaks
Coiled Tubing Includes cleaning and 13 pct 11 pct 24 pct 21 pct
penetrating wellbores,
besides retrieving and
replacing damaged
equipment
Completion Products and services 28 pct 26 pct 54 pct 14 pct
Equipment and used in well completion
Services
Directional Drilling wells at 16 pct 18 pct 34 pct 31 pct
Drilling different angles and not
just vertically to better
reach oil and gas
reserves.
Drill Bits Apparatus used to cut 17 pct 24 pct 41 pct 27 pct
into rock in oil and gas
drilling
Drilling and Fluids used in drilling 25 pct 10 pct 35 pct 36 pct
Completion Fluids bore holes into the
ground and in completed
wells before the start of
production
Hydraulic Drilling technique where 26 pct 13 pct 39 pct 20 pct
Fracturing water, chemicals and sand
are blasted into wells to
extract oil and gas
LWD (logging while Drilling where logging 30 pct 16 pct 46 pct 45 pct
drilling) tools are incorporated
into the drill string,
helping transmit
formation measures to the
surface in real time
Surface Data Helps detect and avoid 15 pct 12 pct 27 pct 29 pct
Logging problems in drilling
Wireline Logging Helps measure properties 16 pct 12 pct 28 pct 44 pct
of an oil and gas
formation through
electrical cables
Below is a breakdown of Baker Hughes' and Halliburton's third-quarter revenues by operating region:
Revenue by region Halliburton
(in $ mln)
North America 4,724
Latin America 1,045
Europe/Africa/Commonwealth 1,464
of Independent States
Middle East/Asia 1,468
Revenue by region Baker Hughes
(in $ mln)
North America 3,155
Latin America 571
Europe/Africa/Russia Caspian 1,114
Middle East/ Asia Pacific 1,077
(Reporting by Swetha Gopinath, Shubhankar Chakravorty and Manya Venkatesh in Bangalore; Editing by Lisa Von Ahn)