CMA receives proposals which may address competition concerns in oil services deal
CMA considers that undertakings offered by oilfield services provider Schlumberger (SLB) could resolve competition concerns in the UK relating to its acquisition of ChampionX, a global provider of chemical solutions, oilfield services and equipment.
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The Competition and Markets Authority (CMA) is considering SLB’s offer of undertakings to resolve the competition concerns it identified during its Phase 1 investigation of SLB’s acquisition of ChampionX.
SLB and ChampionX are leading global suppliers of oilfield services, equipment and related technologies. Both companies have significant operations (including UK assets) supplying important inputs to oil and gas companies and other oilfield services firms in the UK North Sea. They hold substantial positions in the UK markets in which the CMA has identified competition concerns.
The undertakings offered include:
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the sale of SLB’s UK production chemical technologies (PCTs) business to a CMA-approved buyer
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the sale of ChampionX’s global US Synthetic business, which supplies market-leading polycrystalline diamond (PCD) bearings used in certain directional drilling services by SLB’s rivals in the UK, to a CMA-approved buyer
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a licence covering relevant intellectual property and know-how to a CMA-approved alternative developer of quartz sensors and transducers supporting the growth of a strong alternative supplier in this segment, together with agreements to provide SLB’s rival suppliers of permanent downhole gauges (PDGs) in the UK access to ChampionX’s market-leading quartz sensors and transducers for an interim period
Having provisionally found that these undertakings could address its concerns, the CMA now has 40 working days to consider them in more detail, including seeking third-party feedback. If satisfied, the CMA will proceed to clear the deal subject to its final acceptance of the undertakings.
The CMA is concerned that the deal – if allowed to proceed without remedies – could cement the companies’ substantial positions in highly concentrated markets, potentially leading to higher costs, fewer alternatives and reduced innovation, impacting the competitiveness of the UK’s oil and gas industry.
Sorcha O’Carroll, Senior Director for Mergers at the CMA, said:
Effective competition in the oil and gas industry drives innovation, pushing companies to reduce costs and develop more efficient ways to produce energy. It also helps ensure that prices remain competitive, benefiting consumers whilst allowing companies to meet global energy demands.
We are continuing to engage constructively with the companies on the proposals they have put forward to resolve our competition concerns. We’ll also consider any feedback we receive on these undertakings before reaching a final decision
More information can be found on the Schlumberger / ChampionX case page.
Notes to Editors:
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The CMA found in its Phase 1 decision that the merger could result in reduced competition in the supply of production chemicals that are used in oil and gas production in the UK North Sea. The CMA also found that the merger could harm competition in the supply of directional drilling services using rotary steerable system (RSS) and in the supply of PDGs, by restricting the access to key inputs (PCD bearings and quartz sensors/transducers, respectively) for SLB’s rival producers in these markets.
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PCTs are essential for optimising performance, safety, and efficiency of oil and gas operations by improving production rates and preventing issues like corrosion.
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Directional drilling services using RSS enable precise control over wellbore trajectory, improving drilling efficiency and accuracy while minimising risks and costs in complex oil and gas reservoir environments. PCD bearings are an important input to directional drilling services, particularly well-suited for operating under harsh conditions, such as the conditions in the UK North Sea.
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PDGs provide continuous, real-time monitoring of downhole conditions such as pressure, temperature and fluid levels, helping optimise production and ensure the safety and efficiency of oil and gas operations. Quartz sensors, incorporated into transducers, are typically used within PDGs for high-value assets in offshore areas and are known for their robustness and accuracy in harsh downhole environments.
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For media enquiries, please contact the CMA press office on 0203 738 6460 or press@cma.gov.uk.