When oilfield service companies enter developing economies: a new model for efficiency

Abstract

Purpose The purpose of this paper is to identify the most effective operational model for oilfield service companies in developing markets (e.g. Russian market). It proposes the comparative analysis of oilfield service industry regulation in several developed and developing markets, specifies industry and interaction between energy and service companies and advises the effective operation model applicable to the Russian market. Design/methodology/approach This paper’s methodology is based on collecting information and generalizing the experience of international oilfield service companies in developed and developing markets, thus identifying types of service company’s operational models and factors that determine the choice of strategy and operational model in different countries and markets, as well as identifying the most effective model for the developing market (e.g. Russian market). Findings The paper provides the case study for operational models implementation and calculation of their financial effect. It suggests that the integrated operational model is the most effective solution in developing markets in the case of operational risks and financial effect. Research limitations/implications Because of the great number of segments, types of works and projects in international oilfield service industry, only the drilling segment was chosen as the analysis object. This segment is the key segment in oilfield sector with 35% global share of total oilfield works. Originality/value This paper fulfils an identified need to study how oilfield service companies are able to increase profitability and decrease market access barriers using correct operational models that reflect different market specifics.