(Bloomberg) – Schlumberger Ltd., the world’s largest oilfield services company, agreed to sell its U.S. fracking business to a smaller rival following a collapse in demand.
Schlumberger said Tuesday its OneStim unit will be combined with Liberty Oilfield Services Inc. in exchange for a 37% stake in the smaller company valued at about $448 million.
OneStim helps customers extract oil and gas from shale wells. Demand for its services has contracted rapidly this year following the slump in global oil prices amid the effects of the Covid-19 pandemic. In July, Schlumberger described the decline in the unit’s sales as “precipitous,” contributing to a 40% plunge in revenue in the second quarter compared with the first quarter.
The Liberty deal is the latest move by Schlumberger Chief Executive Officer Olivier Le Peuch to adjust to the tough market conditions of 2020. The company said in July it’s cutting more than 21,000 workers.