Corporate Miscellany (March 1998)

Halliburton and Dresser merge and engage IBMfor global communications infrastructure while Schlumberger just grows and grows!

Halliburton and Dresser have merged in a $7.7 billion deal to form the largest oil service group in the world. The combined company will be called Halliburton Company and remain headquartered in Dallas, with a work force of approximately 100,000 employees world-wide. Dresser is a nuts, bolts and pump company so while there may be long term synergy there will be no quick gains in terms of IT technology transfer. Dick Cheney, Halliburton's chairman and chief executive officer, who will be CEO of the combined company, said, "Halliburton and Dresser are an outstanding business and cultural fit. This is a win-win combination for both companies' shareholders, customers and employees. It represents a major step forward toward our goal of creating a fully integrated oilfield and engineering and construction services company with a global leadership position. The ability to provide complete, seamless solutions for customers is becoming the critical factor in winning large international service contracts. We will have the broadest range of capabilities in the industry and will remain focused on meeting the multiple and growing needs of customers worldwide."

Halliburton have just awarded IBM Global Services a seven-year outsourcing contract that will create one of the largest private networks in the world. Under the terms of the agreement, IBM Global Services will provide IP-based wide area network services, service desk support, local area network management, server management and e-mail administration for more than 26,000 Halliburton employees (or perhaps that should be 100,000 now) located in 54 countries. In addition, IBM Global Services will provide Internet services to Halliburton including hosting Halliburton's Internet Web site. The Halliburton/Landmark plans for a linkage with EDS (announced in PDM Vole 1 N° 1 back in 1996) appear not to have born fruit.

Meanwhile Schlumberger have just announced a healthy year for 1997. Oilfield Services revenue increased 25% and pre-tax operating income increased 58%. The robust growth was fairly evenly spread geographically and across all services. Schlumberger have been doing some quiet reorganization of their own. Applying Hamel-like methodology Schlumberger initiated a self-examination program "Forum 2005" back in 1996. A group of 36 young, diverse Schlumberger people were challenged "to imagine what the world would be like in the year 2005, and describe the sort of company they wanted Schlumberger to become".

Many of their recommendations are now being implemented. As of February 1, 1998, the business is organized in two groups, Solutions and Products. The Solutions Group is organized along geographic lines to develop, sell and implement all oilfield services as well as customized and integrated solutions to meet specific client needs. The Products Group is responsible for product development across the organization as well as training and technical support for each type of service in the field to ensure the highest standards of service to clients. Another result of Forum 2005 is that information technology will be deployed to "make all the relevant knowledge available to the user when and where it is needed". Baird described Schlumberger's development work in knowledge management as part of an industry-wide effort "to improve our ability to capture knowledge, integrate and preserve it and then make what has been learned quickly and easily available to anyone who will be involved in the next business decision. Our aim is to learn faster and learn forever." One encouraging aspect of Schlumberger's financial success is that it appears to have been achieved through "upsizing". The Schlumberger headcount has risen by 32% over the last five years to reach 63 500 in 1997.