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What’s next for oilfield services?

The oilfield services industry faces a difficult period of transformation. It is being forced to radically restructure to survive in a world striving towards net-zero carbon emissions. And it has to do this in the much lower profit environment of the past few years.

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What’s next for oilfield services?

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Companies race to innovate

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Environmental credibility matters

The pressure is immense now to secure a long-term future.

MANFRED VONLANTHEN CEO, Swire Energy Services

Oilfield services moves away from fossil fuels

To carve out a new future, many oilfield services companies are branching out into other sectors and extending their capabilities.

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of respondents say they are redefining their core business

The top 50 oil and gas service suppliers could replace up to 40% of their 2019 revenue of $220 billion by servicing the renewable markets, according to consultancy Rystad Energy.1

Our respondents expect to have shifted 64% of their portfolio to non-oil and gas business within the next five years, compared with 56% of projects today.

Among those diversifying their portfolios is Baker Hughes, which is repositioning itself as an energy technology company and looking to expand services to energy and industrial customers.

"We are already expanding into new frontiers, like hydrogen and carbon capture, that will come to play central roles in the energy transition,” says Baker Hughes CEO and Chairman Lorenzo Simonelli.2 To grow its portfolio in carbon capture storage and utilisation (CCSU), Baker Hughes acquired Norwegian technology solutions provider Compact Carbon Capture3 in 2020 and recently signed an agreement to explore CCSU opportunities with Italian offshore fabricator Rosetti Marino.4

Respondents expect to grow their portfolio in new energy sectors

What type of projects make up your company’s portfolio today? And what do you expect it to look like in 5 years’ time?

“If you don’t evolve your products and services and stay focused on traditional oil and gas solutions, then external funding becomes very difficult. You need to evolve your offerings and profile to obtain funding in this ESG-dominated environment.”

— Peter Hansen CEO, Welltec

Where are the opportunities?

Renewable energy and battery storage offer the greatest transition opportunities

Where do you see the greatest energy transition opportunities for your business in the next 2-3 years?

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of respondents see new renewable energy technology as the greatest energy transition opportunity for their business over the next two to three years

The rapid growth of offshore wind farms has attracted oilfield services companies such as Aberdeen-headquartered Swire Energy Services. In 2020, it rebranded in response.

“We could either just go down the pure oil and gas route and continue to invest in an industry that is increasingly challenged by investors and politicians,” says Swire’s CEO Manfred Vonlanthen. “Or we could expand and invest into the energy transition to look at how the company could develop over the next 10 years and beyond.”

Swire chose to establish a dedicated offshore wind division, and in 2021 it expanded its capabilities by acquiring Danish offshore wind services provider ALL NRG, and by investing in Portuguese wind technology company BladeInsight.

Looking at the growth perspective and the capacity expansion over the next 10 years, it goes without saying that there will be a huge need for services in offshore wind.

MANFRED VONLANTHEN CEO, Swire Energy Services

Another growing area in green energy is battery storage, which is essential to integrating intermittent renewable energy into the grid.

Battery and storage system development is set for boom times: 82% of respondents to our European survey earlier this year were expecting to launch a new battery product or storage system in the next 12 months.

Carbon capture shows promise

The area to move into often depends on the company’s existing work.

For example, 22% of respondents who consider CO₂ management as the greatest energy transition opportunity are likely to already have knowledge of well design, reservoir management and enhanced oil recovery technology. This allows for a natural extension into services associated with CCSU.

Welltec moves into carbon capture

Peter Hansen, CEO of Danish well-solutions provider Welltec, expects carbon capture and storage to amount to 5–10% of company revenue over the next decade. “Carbon capture is experiencing an exponential growth in interest from governments and industry players,” says Hansen. Using knowledge derived from an extensive track record in oil and gas markets, Welltec will be testing materials in its new CO₂ flow test centre, as a part of a consortium working on Greensand, Denmark’s carbon storage pilot project. “Our role is in storage and well completion design,” says Hansen. “Monitoring and selecting materials such as packers, valves and systems that can be sustained in the harsh corrosive environment of CO₂.”

The other way to use CO₂ in oil and gas is to capture and reinject it into wells for enhanced oil recovery (EOR), allowing operators to keep exploiting reservoirs in mature fields. Today, the only profitable industrial large-scale carbon sequestration projects are large-scale CO₂ EOR ones.5

How to exploit the new opportunities

Product development is tipped to yield major innovation over the next 12 months

In which of these areas do you expect major innovation or disruption in the next 12 months?

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Where are the opportunities?

Renewable energy and battery storage offer the greatest transition opportunities

Where do you see the greatest energy transition opportunities for your business in the next 2-3 years?

0%

of respondents see new renewable energy technology as the greatest energy transition opportunity for their business over the next two to three years

The rapid growth of offshore wind farms has attracted oilfield services companies such as Aberdeen-headquartered Swire Energy Services. In 2020, it rebranded in response.

“We could either just go down the pure oil and gas route and continue to invest in an industry that is increasingly challenged by investors and politicians,” says Swire’s CEO Manfred Vonlanthen. “Or we could expand and invest into the energy transition to look at how the company could develop over the next 10 years and beyond.”

Swire chose to establish a dedicated offshore wind division, and in 2021 it expanded its capabilities by acquiring Danish offshore wind services provider ALL NRG, and by investing in Portuguese wind technology company BladeInsight.

Looking at the growth perspective and the capacity expansion over the next 10 years, it goes without saying that there will be a huge need for services in offshore wind.

MANFRED VONLANTHEN CEO, Swire Energy Services

Another growing area in green energy is battery storage, which is essential to integrating intermittent renewable energy into the grid.

Battery and storage system development is set for boom times: 82% of respondents to our European survey earlier this year were expecting to launch a new battery product or storage system in the next 12 months.

Carbon capture shows promise

The area to move into often depends on the company’s existing work.

For example, 22% of respondents who consider CO₂ management as the greatest energy transition opportunity are likely to already have knowledge of well design, reservoir management and enhanced oil recovery technology. This allows for a natural extension into services associated with CCSU.

Welltec moves into carbon capture

Peter Hansen, CEO of Danish well-solutions provider Welltec, expects carbon capture and storage to amount to 5–10% of company revenue over the next decade. “Carbon capture is experiencing an exponential growth in interest from governments and industry players,” says Hansen. Using knowledge derived from an extensive track record in oil and gas markets, Welltec will be testing materials in its new CO₂ flow test centre, as a part of a consortium working on Greensand, Denmark’s carbon storage pilot project. “Our role is in storage and well completion design,” says Hansen. “Monitoring and selecting materials such as packers, valves and systems that can be sustained in the harsh corrosive environment of CO₂.”

The other way to use CO₂ in oil and gas is to capture and reinject it into wells for enhanced oil recovery (EOR), allowing operators to keep exploiting reservoirs in mature fields. Today, the only profitable industrial large-scale carbon sequestration projects 2 are large-scale CO₂ EOR ones.5

How to exploit the new opportunities

Product development is tipped to yield major innovation over the next 12 months

In which of these areas do you expect major innovation or disruption in the next 12 months?

Where are the opportunities?

Renewable energy and battery storage offer the greatest transition opportunities

Where do you see the greatest energy transition opportunities for your business in the next 2-3 years?

0%

of respondents see new renewable energy technology as the greatest energy transition opportunity for their business over the next two to three years

The rapid growth of offshore wind farms has attracted oilfield services companies such as Aberdeen-headquartered Swire Energy Services. In 2020, it rebranded in response.

“We could either just go down the pure oil and gas route and continue to invest in an industry that is increasingly challenged by investors and politicians,” says Swire’s CEO Manfred Vonlanthen. “Or we could expand and invest into the energy transition to look at how the company could develop over the next 10 years and beyond.”

Swire chose to establish a dedicated offshore wind division, and in 2021 it expanded its capabilities by acquiring Danish offshore wind services provider ALL NRG, and by investing in Portuguese wind technology company BladeInsight.

Looking at the growth perspective and the capacity expansion over the next 10 years, it goes without saying that there will be a huge need for services in offshore wind.

MANFRED VONLANTHEN CEO, Swire Energy Services

Another growing area in green energy is battery storage, which is essential to integrating intermittent renewable energy into the grid.

Battery and storage system development is set for boom times: 82% of respondents to our European survey earlier this year were expecting to launch a new battery product or storage system in the next 12 months.

Carbon capture shows promise

The area to move into often depends on the company’s existing work.

For example, 22% of respondents who consider CO₂ management as the greatest energy transition opportunity are likely to already have knowledge of well design, reservoir management and enhanced oil recovery technology. This allows for a natural extension into services associated with CCSU.

Welltec moves into carbon capture

Peter Hansen, CEO of Danish well-solutions provider Welltec, expects carbon capture and storage to amount to 5–10% of company revenue over the next decade. “Carbon capture is experiencing an exponential growth in interest from governments and industry players,” says Hansen. Using knowledge derived from an extensive track record in oil and gas markets, Welltec will be testing materials in its new CO₂ flow test centre, as a part of a consortium working on Greensand, Denmark’s carbon storage pilot project. “Our role is in storage and well completion design,” says Hansen. “Monitoring and selecting materials such as packers, valves and systems that can be sustained in the harsh corrosive environment of CO₂.”

The other way to use CO₂ in oil and gas is to capture and reinject it into wells for enhanced oil recovery (EOR), allowing operators to keep exploiting reservoirs in mature fields. Today, the only profitable industrial large-scale carbon sequestration projects 2 are large-scale CO₂ EOR ones.5

How to exploit the new opportunities

Product development is tipped to yield major innovation over the next 12 months

In which of these areas do you expect major innovation or disruption in the next 12 months?