The Oilfield in 2019 - Sequeira Partners · industry still grows-20% -10% 0% 10% 20% 30% 40% 50%...
Transcript of The Oilfield in 2019 - Sequeira Partners · industry still grows-20% -10% 0% 10% 20% 30% 40% 50%...
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Prediction from last year’s meeting
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One year ago we
assumed these
markets would grow
in 2018
0% 5% 10% 15% 20% 25%
Lift
Trees
RigEqpt
SolidsCntr
MudLog
Testing
Packers
Mud
Directional
Tblr Svs
Bits
Chemicals
DH Tools
Land Drlg
CTS
Wireline
WellSvs
Cement
Rental
Frac
FracTrks
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We also predicted $60 oil in 2018
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We also predicted $60 WTI oil in 2018
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Will there be an oil industry in 20 years?
• This is the question we ask on the campus of Stanford University each January as part of an MBA lecture series.
6
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Is frac good or bad?• This is the question we ask everywhere and to everybody.
• Will you answer the same way the Stanford MBA students answered?
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We asked CEOs what are the
greatest threats to continued
oilfield growth?
0% 10% 20% 30% 40% 50% 60% 70% 80%
Environment
Labor
Technology
OPEC
Economy
What are greatest threats to continued growth?
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Oil demand grows due to population growth
80
85
90
95
100
105
2012 2013 2014 2015 2016 2017 2018 2019 2020
Mill
ion
bp
d
Global Oil Demand
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Threats? Politics & Environment
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With $60 oil in 2019, the entire industry
still grows
-20% -10% 0% 10% 20% 30% 40% 50% 60% 70%
Unit Manufacturing
Hydraulic Fracturing
Oil Country Tubular Goods
Downhole Drilling Tools
Rental & Fishing Services
Surface Equipment
Coiled Tubing Services
Completion Equipment & Services
Cementing
Well Servicing
Drill Bits
Inspection & Coating
Artificial Lift
Land Contract Drilling
Solids Control & Waste Management
Contract Compression Services
Wireline Services
Production Testing
Casing & Tubing Services
Directional Drilling Services
Surface Data Logging
Drilling & Completion Fluids
Floating Production Services
Logging-While-Drilling
Specialty Chemicals
Petroleum Aviation
Supply Vessels
Geophysical Equipment & Services
Rig Equipment
Offshore Construction Services
Subsea Equipment
Offshore Contract Drilling
2018 2019
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The global oilfield
grows in 2019
-40%
-30%
-20%
-10%
0%
10%
20%
30%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
20
07
20
09
20
11
20
13
20
15
20
17
20
19
Mill
ion
s
Annual Change TOTAL
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The global oilfield
grows in 2019
-40%
-30%
-20%
-10%
0%
10%
20%
30%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
20
07
20
09
20
11
20
13
20
15
20
17
20
19
Mill
ion
s
Annual Change TOTAL
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Permian? Drilling & frac are
decoupled
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
2014 2015 2016 2017 2018 2019 2020
Permian Drilling vs Completion Footage
Permian Horizontal Completions Permian Horizontal Wells
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Land Contract Drilling
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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Directional Market
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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Frac Market
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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Frac Market
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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Offshore Contract Drilling
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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Offshore Contract Drilling
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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Subsea Market
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19
Millions of USD
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How do oil company boards think?Short term.
• Capex discipline assuming $60 oil
• Worries about “peak demand” and climate change
• Offshore exploration takes 8-10 years for first oil
• Technology-based efficiency gains 22
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