From start-ups to those that have been in business for 20-plus years, almost all oilfield services companies have experienced challenges in finding work. The difficulty of finding work was very apparent back in 2014 with the crash of the oil industry. Many companies went out of business and many of those that did survive, took major hits as they drastically cut prices to get consistent work. With that being said, the oil industry is beginning its rebound, and new opportunities in the oilfield are starting to come.
I thought it would be interesting to interview a foreman from one of the larger oil producers in the Permian Basin to get his insight of the current state of the industry and how companies can get on the vendor list for companies like his.
He was able to give great insight and advice for both large and small oilfield service companies that are looking to grow their business. One of the most significant pieces of advice that I took from the interview was “not biting off more than you can chew.” He wasn’t talking about taking too big of a bite of your sandwich, but overpromising and underdelivering in regards to the work you can handle. He said he often sees companies trying to grow too quickly and diversify their business, but not having the personnel or the cash flow needed to hire more employees to cover all the work.
“Word of mouth travels fast around here, and we are not Googling these service companies in the Permian deciding if we will work with them or not,” he stated. “It is difficult and takes time to build a good reputation, but a bad reputation can start as quickly as after the first job.”
So, what do you do if you’re starting up a new company and do not have a reputation?
He suggested to call or show up on site because the foreman’s not likely to call you and for sure will not be ringing your doorbell.
He said they hire new and smaller companies all the time for at least one job to see how well they do. Yes, you may have to come in at a lower price, but if you do well, you’ll more than likely get more work. Doing good work can also help you find other opportunities in the area. As he stated, “word travels fast.”
Other than word of mouth, he stressed safety records. A good safety record, even if you are a company close to or in bankruptcy, can still get you work with producers in the industry.
As of recently, we have all been seeing things pick up. It is evident to this foreman as he has seen an increase in the amount he has to pay his service providers. He expects this trend to continue and would welcome more established companies on his vendor list.
The foreman I spoke to wanted to leave his name and company out of this article, but if you’re an oilfield service company and are looking to grow in the Permian Basin, give me a call at 952-656-3444. I would be happy to pass your information along to him.
Author: Jade K.