Larger oilfield service companies are more able to provide technological advantages
The large-cap OFS names such as Baker Hughes, Schlumberger, and Halliburton have the scale to develop and implement new technologies more easily than their smaller competitors. This is especially beneficial to the large caps, as recent drilling trends have called for more advanced techniques (think horizontal drilling, intensive fracking, and long well laterals).
Companies believe technology will be instrumental in gaining market share and commanding higher margins
The major OFS names have also commented that technology would be an advantage for them. The CEO of Baker Hughes commented:
Schlumebrger stated on its call that it was seeing “highly competitive pricing on basic services and slow-but-steady activity growth… for new technology,” and that it could command a premium for new technology as well.
Plus, Halliburton commented that the introduction of new technologies in its Latin American segment would allow it opportunities to upsell.
All three companies also discussed specific technologies that they believed would help upstream energy producers in developing unconventional resources.