Goldman Sachs Group Inc. is taking the “oil” out of oil services, rebranding its coverage of drilling and fracking providers in the latest sign of the energy industry’s shift away from fossil fuels.
“We are renaming our coverage to ‘Energy Services,’” Goldman analysts including Neil Mehta wrote Thursday in a note to investors. “We believe investors should evolve the framework of evaluating this sector from ‘traditional oil services’ to ‘energy services’ to better capture emerging drivers of long-term growth.”
In yet another indication of the shift, Schlumberger, the world’s biggest oil-services provider, on Thursday announced it had hired Katharina Beumelburg from Siemens AG for a newly created role overseeing sustainability. Beumelburg will report directly to Chief Executive Officer Olivier Le Peuch.
Companies and industry conferences have increasingly excised “oil” from their names amid growing investor pressure to limit the greenhouse gases that contribute to climate change. In December, National Oilwell Varco Inc. changed its name to NOV Inc. as it expands its engineering, manufacturing and project management services beyond oil and gas.
Energy service providers including Schlumberger, Baker Hughes Co. and Halliburton Co. have a chance to grow new businesses in digital technologies and the green transition and diversify into various industrial end-markets, according to the note. The bank values Schlumberger’s digital solutions business, which provides software and related services to energy companies, at as much as $20 billion.
However, the bread-and-butter oilfield service business will be challenging for the companies over the next several years as producers hold tight on spending and markets remain oversupplied and fragmented, according to the note.
This article was provided by Bloomberg News.