Supplier/Services Relationship—Gains and Losses, 1982 to 1984

Abstract

This paper WrM presented at the SPEIIAOC 19SSOrillingconference held in New Ortaen% Loubiana, Mach~s. l=. Themat~al ie-to~t ii by the author. Permission to copy ia rea!rbtad to an abatraot ot no! more than S00 worde. Write SPE, P.O. Sox S3SSS6, Richardson, Texae 7rMSwS3a. ABSTRACT During the drastic boom-bust turnaround2. Inventories--thoughsti11 far too high--have between 1979 and 1983 the service and supPlY been reduced through curtai 1ed production, part of the industry -along with the drilling write-offs, scrappage, auction sales, etc. and production sectors -provided too much This has provided some reduction in the capacity.We were caught with too much financialburdens of high inventorycosts. inventory. Much of the capacity and inventory was purchased with borrowed funds at high 3. Most of the remaining companies have interest rates.When activity dropped, we consolidated and reorganized to reduce cost had to bite the bullet and cut our costs. Prices of operations. There will be more became soft and discountingbecame a detrimental consolidations in the future to balance way of life. Bold steps have been taken to the over capacitywith availablemarket. meet the current market.When the drop started in 1982 several very serious It is mandatory that we know and understand the needs of the industry so that we will provide