Good morning, here's what the Oilman has for you today:

• Oilfield Majors Get Increasingly Dependent on Fore …

• Wall Street Strikes Back at Activists

• Tweet of the Day

Oilfield Majors Get Increasingly Dependent on Foreign Business

The top players in the oilfield services space are growing more dependent on their overseas business.

At home, business is shrinking as the number of drillers shrinks, too.

No more “Drill, baby, drill”… for now

 The consolidation wave riding through U.S. shale was bound to affect OSPs.

And affect them it has.

Halliburton reported a 12% drop in its rig count in North America for the second quarter.

SLB reported a 6% revenue decline in North American operations.

Overseas business, meanwhile, is booming.

Halliburton reported its 12^th quarter in a row of growth in that segment.

SLB saw its foreign revenue spike 18%.

Foreign business is good.

Even after Saudi Arabia dropped its plans to expand production capacity.

For now, this business is making up for the decline at home.

The question is, how long would this decline last?

Doing more with less and its drawbacks

The shale industry has been maturing.

It has continuously sought to do more with less.

And it has been successful—so much so that it may not need as much OSP business as before.

The consolidation wave also points in that direction.

There will probably never again be a massive sprouting of wildcatters in U.S. oil.

This means OSP majors would remain dependent on their foreign operations.

This means intensified competition for new international businesses.

Until shale returns to boom mode.

This could happen as soon as next year if Halliburton’s CEO is right.

Wall Street Strikes Back at Activists

Wall Street heavyweights have had enough of climate activists.

They are refusing to cave to pressure to spend more on the transition.

Unless it starts making money.

No climate police

Wall Street bankers have been quite vocal supporters of the energy transition.

They have also been quite vocal in forcing oil and gas to shift into transition mode.

Funny thing, they’re not that loud anymore.

Now, they’re talking about returns on transition investments.

And they’re talking about them as a necessary condition for making those investments.

The transition “has to create returns at the same time as it decarbonizes.”

“It’s not either or, it’s both,” says the climate chief of KKR.

The CEO of UBS, for his part, warned activists not to expect banks to act as a ”climate police”.

Which is exactly what activists want.

The concept of business as a whole appears to be alien to them.

And that’s why they can’t understand why oil and gas are still alive and kicking.

That’s why: because they make money.

And reliable energy.

Waiting for that shoe to drop

The transition is already collapsing.

It’s a matter of time before the process becomes impossible to ignore.

This is why banks are speaking up.

They cannot afford to keep pretending they’re not seeing it.

If they did, they wouldn’t be banks, after all.

Follow the money and all that.

In this case, the money is on reliability and profitability.

Shocking, right?

Tweet of the Day

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