National Oilwell Varco is the tool man that provides goods and services to exploration and production companies operating in oil patches around the world. The company makes, distributes, and services oil and gas drilling equipment for land and offshore drilling rigs. Its mechanical components include drawworks, mud pumps, cranes, jacking systems, automated pipehandling tools, top drives, and traveling equipment. Other products include masts, derricks, substructures, and cranes. National Oilwell Varco operates in more than 900 locations on six continents, including a network of 270 distribution service centers, to serve its oil and gas company customers.
Its Rig Technology segment (its largest segment) serves supplies drilling contractors, oilfield service companies, and oil and gas companies with major drilling equipment and spare parts. Its Petroleum Services & Supplies segment provides a range of products and services used to drill, complete, remediate oil and gas wells and service pipelines, along with other oilfield tubular products. Both segments are dependent to a large degree on oil prices and the global demand for oil exploration. Finally, its Distribution & Transmission segment provides maintenance, repair, and operating supplies (MRO) and spare parts to drill site and production locations across the globe.
The robust oil and gas market in 2011 spurred greater demand for National Oilwell Varco's products and services, which coupled with acquisitions, helped to lift the company's revenues and net income by about 20% for the fiscal year. Each of its business segments - Rig Technology, Petroleum Services & Supplies, and Distribution & Transmission - saw revenues increase 12%, 35%, and 21%, respectively, in 2011 over 2010.
Mergers and Acquisitions
Acquisitions continue to play a big part of National Oilwell Varco's strategy. In mid-2012 it agreed to acquire Robbins & Myers, a provider of services and equipment to the upstream oil and gas industry, in an all-cash transaction for $2.5 billion. Robbins & Myers' complementary products include downhole tools, pumps, and valves. This will be the company's second-largest acquisition since it bought Grant Prideco for about $7.2 billion in 2008. That year it also bought Canadian equipment distributor CE Franklin for about $240 million.
Earlier in 2012 National Oilwell Varco bought parts and supplies provider Wilson International from Schlumberger. Wilson has an extensive supply chain portfolio, with which National Oilwell Varco expects to take advantage of new market opportunities. It also bought Denmark-based flexible pipe maker NKT Flexibles (a joint venture between NKT Holding and Subsea 7) for $670 million.
In total, National Oilwell Varco bought 10 companies for more than $1 billion in 2011 and 12 companies for $556 million in 2010. Significant acquisitions include that of oilfield equipment maker and services provider Ameron in a $777 million deal, a move that helped to expand National Oilwell Varco's Fiberglass & Composite Tubulars business.
National Oilwell Varco took its current form when National Oilwell and Varco International merged in 2005. – less