- Packers Plus Energy Services, a company built on the North American shale oil boom, is turning to the Middle East to weather a new round of spending cuts by producers amid warnings of a looming oil glut.
The last time supplies overwhelmed demand, oilfield service suppliers cut 100s of thousands of jobs and top firms gushed red ink. Memories of that sharp downturn in late 2014 have executives such as Ian Bryant, chief executive officer of privately-held, Calgary-based Packers Plus, again cutting jobs, seeking safe harbors, mergers, or putting business units on the market.
That drop has Bryant’s Packers Plus, which historically catered to North American onshore producers, looking beyond shale and toward markets in the Middle East for future business. In the last 18 months, other top service firms, including the world’s top oilfield services company Schlumberger , added or acquired new hydraulic fracturing fleets in a bet that a backlog of uncompleted shale wells would grow their businesses.
Some investors and executives believe a wave of mergers and restructurings will be required to prop up declining margins.