How Will You Ride the Slide in 2023? The Case of the Global Service Companies!

By Gerard Kreeft

A service company by its very definition is dependent on the fickleness and whims of the marketplace, but more specifically the oil and gas producers.

For starters, OPEC’s predicted oil production has varying scenarios. The cartel’s long-term forecast is now predicting a global production of 110Million barrels per day up to 2045(see below).

This optimistic prediction is at odds with Wood Mackenzie’s AET-2(Accelerated Energy Transition)

scenario which states that oil and gas demand in 2050 will be 70% lower than today. From

2023 onward oil demand drops with year-on-year fall of around 2Million barrels per day(BPD). Total

oil demand by 2050 is down to 35MillionBPD.

The current blip on the radar screen could well be caused by the reprieve that oil companies and hence their service companies are getting from higher oil prices that started with the Ukraine conflict. Deepwater is the fastest growing upstream oil and gas resource, according to Woodmac’s interpretation. Production in that terrain is expected to hit 10.4MillionBOEPD in 2022 and will reach 17MillionBOEPD by the end of the decade. Even if oil production is on a long term decline the deepwater exploration and development will continue to be the heartbeat driving the industry.

Yet in spite of higher needs for oil, the share price of the three major service companies, has lagged behind the Dow Industrial index.


The company has rebranded itself in two pillars: the traditional oilfield services and equipment (OFSE) and Industry and Energy Technology (IET), offering new energy services for the energy transition. BH’s investment programme is focused on revenue growth, margin enhancement, and improving ROIC ((return on invested capital). In 2022 total revenue of $20.5Billion are anticipated.

Up to 2030 IET is seen as the real growth engine, doubling revenues from $8.5Billion to $17Billion. Key drivers are LNG, CCUS (Carbon Capture, Utilization, and Storage) and H2 services and technology.


The company is involved in every stage of the oilfield life cycle: exploration, well construction, completions, production and abandonment. Key strategic priorities are profitable international growth, maximizing value in North America and automation of the value chain.

Halliburton is also dedicated to helping customers decarbonize legacy production bases. The company is pledged to reducing Scope 1 & 2 emissions by 40 percent from its baseline of 2018.

Revenue in 2021 was $15Billion.

The company’s energy transition solutions include CCS, CO2 storage and geothermal services.


Schlumberger is of the view that the current oil industry revival is driven by the underinvestment of the past. E&P capital is poised to accelerate E&P capital across all geographic and operating boundaries to drive new production capacity increases.  Digital and decarbonization are gaining momentum.

FID (Final Investment Decision) for the period 2022-2025, in Schlumberger’ estimation, will be $397Billion as opposed to $267Billion in the period 2016-2019. This is an increase of 49%, which is large by any measure.  Offshore represents five times the revenue potential of onshore.

The company indicates that it is reducing emissions and environmental impact with practical, quantifiably proven solutions through partnership across the industry. CCS is one of these measures.

Financial Overview & Summary

Dow Jones Industrial Index in the period January 2018- December 2022 rose 31%: increasing from 25,295 to 33,147. Yet in that same time frame the three major service companies have seen their share price tumble, in spite of a revival in the oil and gas market.

BH has seen its share price fall the least: $29 December 2022, and $34 January 2018, a drop of 13%.

Halliburton’s share price January 2018 was $52 and $39 December 2022, a drop of 25%.

Schlumberger’s share price January 2018 was $74, and December 2022 was $53, a drop of 28%.

By all indications the major service companies have fallen out of favour with major investors. Increased oil and gas activity is no longer a guarantee that this will increase the value of a company’s share price.

Yes, all three service companies are pledged to further decarbonizing their asset base as well as further digitalization. Yet in the final analysis the service sector is dependent on the oil majors who determine the pace and strategy of the sector. As long as the oil majors continue to see their dominant operations within the scope of the E&P world the service sector’s future has been determined.

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands.  He writes on a regular basis for Africa Oil + Gas Report, and is a guest contributor to IEEFA (Institute for Energy Economics and Financial Analysis). His book ‘The 10 Commandments of the Energy Transition ‘is on sale at



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