M&A in Rig Operation Industry

Melika Mohammadpour
BD Expert


Technological and structural changes in the global economy and in the energy sector are among the requirements to diversify analytical studies of the energy economy, management and investment in industries, especially the oil industry. The upstream segment of the oil industry includes studies and actions related to exploration, drilling, exploitation, conservation of oil resources, transfer, storage or any activity that leads to the optimal and maximum withdrawal of oil resources, and feeds the downstream industries. According to a previous study by the author, using the AHP methodology to prioritize investment in the Iranian oil industry based on key investment criteria (value added, attracting foreign investment, risk management and linking to the domestic economy) and using the Expert Choice software has been calculated. In this industry, the investments mostly are focused on upstream section. One of the specific upstream segments is rig operation industry.
Drilling Market Structure
Peter Drucker, the father of modern management science,Peter Drucker, the father of modern management science, states that each company has two main tasks: innovation and marketing. If one looks at the most successful global brands in every part, including industrial and retail, or production and services, the meaning of Drucker’s words becomes clearer. All industries in the economy have diverse markets and the structure of the market is the nature and extent of competition between similar firms in an industry. An essential factor in determining the effective and appropriate tools for marketing in an industry is to know the market structure of that industry.
The perfect competition market is a market for competition, where many independent buyers and sellers informant of different situations (prices, etc.) exchange similar products.
In monopolistic competition all perfect market conditions exist, except the condition of standard goods. In  other words, the products offered by vendors can be
In multilateral monopolies, several buyers and sellers are active. If the number of vendors is few, sale multilateral monopoly happens and, if the number of buyers islimited, a multilateral purchase monopoly occurs.

Perfect monopoly occurs when there is only one supplier on the market. In this case, the strength of the firm in controlling the market and the price are almost complete. Monopoly results from three factors: geographic factors, technology and natural factors.
The Comparison of different markets

M&A in Rig Operation Industry01









The status of drilling industry market

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The market for drilling rigs is in the state of multilateral monopoly according to the features proposed in the supply and demand segment. One of the key features of multilateral monopoly is the difficulty of entering the industry, which is due to the nature of the capitalism of the industry, with high investment and compliance with certain standards and laws, and therefore leaving the industry has a high inertia. Now, we want to analyze the state of the rig operation industry with the concepts of competition and competitive strategies in business management and through the five-factor Porter model.

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