Schlumberger and Halliburton Suggest Major Changes in Business Models

Paal Kibsgaard, Schlumberger CEO, suggests big changes are coming for the way service companies and oil operators work together. Kibsgaard said in the 1st quarter conference call, "We believe that the industry needs to think differently, in order to reduce project costs and increase project value. And we see closer collaboration between operators and the large service companies as a key element in achieving this goal. And this closer collaboration should also include more performance-based contracting models." Halliburton President, Jeff Miller, said customers are asking for price discounts due to low oil prices, but the service company wants to focus on "all around efficiency and contracting, which is how to better work with Halliburton to take system costs out of drilling."