Schlumberger’s acquisition of ChampionX needs closer examination

There is a risk that competition in the markets for production chemicals, permanent well monitoring, and directional drilling will be weakened if Schlumberger is allowed to acquire ChampionX. Therefore, the Norwegian Competition Authority needs to conduct further analyses of the acquisition.

To assess the competitive effects of the acquisition, the Norwegian Competition Authority has collected and analysed detailed information from the two companies, as well as from customers and competitors. The authority’s preliminary assessment is that competition in several markets could be weakened if Schlumberger is allowed to acquire ChampionX.

– Both companies offer production chemicals and related services to oil and gas companies on the Norwegian continental shelf. Together, the companies have a high market share in this market, and the acquisition will result in customers having one less supplier to set against each other in tenders when purchasing production chemicals. Therefore, further analyses are necessary to understand how Schlumberger’s acquisition of ChampionX will affect competition in this market, says Acting Deputy Director of the Department for Construction, Industry, and Energy at the Competition Authority, Hanne L. Falkanger.

Furthermore, there are vertical relationships between the companies, where ChampionX, among other things, offers quartz transducers and diamond bearings that Schlumberger and Schlumberger’s competitors use as inputs in their offerings of permanent well monitoring and directional drilling in Norway. The Norwegian Competition Authority is concerned that the acquisition could also lead to weakened competition in these markets.

The companies have proposed remedial measures in phase 1. The Norwegian Competition Authority has assessed the companies’ proposed remedial measures and concluded that they are not sufficient to mitigate the anti-competitive effects of the acquisition.

– Our preliminary assessment is that there is reason to fear that the acquisition could limit competition in several markets. In the coming period, the Norwegian Competition Authority will continue to work on these assessments to determine whether it is appropriate to stop the acquisition,” says Acting Deputy Director Hanne L. Falkanger.