Shiv Kapoor

Thoughts on Baker Hughes' BJ Services Acquisition

BHI has in my view done just fine on customer satisfaction considering the rapid rate of growth. I also believe that the BJS acquisition is an excellent one because looking into the outyears, companies without the ability to deliver IPM will go nowhere.

IPM is revolutionary in that it makes available expertise for a fee. In the past NOC's partnered with big oil for expertise and to share risk. Several NOC's are increasingly carrying higher risk and buying in expertise from OFS companies. I expect this trend to continue and strengthen. For major oil, expansion through risk sharing and execution is a considerable strength so they will continue to have a role to play; but even here outsourcing expertise to highly skilled external experts makes good sense.
I think WFT might have been a better fit and would see a future combine between BHI+BJS & WFT as making sense.