Businessmodel of Halliburton

Customer Segments

Halliburton provides a range of products and services to various commercial operators within the energy industry, principally serving offshore and onshore upstream oil and natural gas companies. This includes multinational oil and gas majors, independent oil and natural gas operators, and national oil and gas businesses. The Company’s products and services cater to companies engaged specifically in locating hydrocarbons, managing geological data, drilling and formation evaluation, well construction and completion, and oil and gas production.

Halliburton counts many of the world’s largest upstream oil and gas groups among its customers. This includes companies such as Chevron, Exxon Mobil, Dow Chemical, Anadarko Petroleum, ConocoPhillips, Chesapeake Energy, and EOG Resources. For 2015 no single customer represented more than 10% of the Company’s consolidated annual revenue.

While the largest portion of the Company’s revenue is generated domestically, Halliburton serves an international customer base, conducting business in approximately 80 countries worldwide. Its revenue is organised into four geographic regions: North America, Latin America, Middle East and Asia, and Europe, Africa, and CIS. The Company notably has significant manufacturing operations the US, Canada, China, Malaysia, Singapore, and the UK.

Value Propositions

Halliburton provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company established as a market leader in its filed, having a track record for providing high-quality services, as is indicated by the Company’s ability to continually attract the business of well-known multinational oil and gas majors;
• Its broad range of products and services, with the Company offering an extensive portfolio of products and services that spans the entire lifespan of an oil or gas project from exploration to production;
• Its international reach, with the Company providing services to a global customer base, spanning 80 countries across Europe, the Americas, Africa, Asia Pacific, and the Middle East;
• Its commitment to research and development, with the Company committing a substantial portion of its resources each year to the development of new and innovative processes and products, enabling to provide cutting edge services to its customers around the world; and
• Its industry expertise and experience, with the Company employing specialist personnel across its numerous operating units, as well as a team of experienced industry executives. ### Channels

Halliburton operates a website at www.halliburton.com, through which it provides information on its various services, products, and operating locations. The Company additionally operates a number of regional websites that concern the Company’s operations in specific jurisdictions, namely its Eurasia and Norway websites. Halliburton also operates an online customer portal, which allows customers to view premium content, subscribe to newsletters, and receive product updates.

Most of Halliburton’s products and services are provided through the Company’s various in-house servicing and sales organisations. Its sales and service staff operate principally out of the Company’s network of small facilities, including dedicated sales, project, and support facilities, which are located across the Americas, Asia Pacific, Africa, Europe, and the Middle East. This includes a presence in China, Australia, Russia, India, Mexico, Turkmenistan, and the UK.

Halliburton operates its own completion and production, and drilling and evaluation facilities, as well as providing services to customers on-site around the world.

Customer Relationships

Halliburton provides a range of resources and content to customers on a self-service basis through its online customer portal, which enables customers to access premium content, subscribe to newsletters, and receive product updates without interacting with members of the Company’s sales and support teams.

Halliburton’s sales, however, are made through its in-house sales and service personnel, who work closely with the Company’s customers, interacting regularly with their purchasing staff, to accurately establish the needs and circumstances of each individual client. The Company seeks to establish long-term relationships with its major customers, with contract often spanning multiple years of the length of specific projects.

Customers receive ongoing support from Halliburton’s dedicated account management teams. New and existing customers can also receive more general support from the Company through an online contact form, which is available through the Company’s website. Alternatively, customers can interact with Halliburton directly, and receive regular updates regarding its activities, through its social media accounts, including with Facebook, Twitter, YouTube, Google+, and LinkedIn.

Key Activities

Halliburton is an oil and gas services provider. Its provides a range of products and services to customers operating within the upstream oil and natural gas industry, including multinational oil majors such as Chevron and Exxon Mobil.

The Company aligns its operations into two reportable business segments: Completion and Production, which delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift, and completion products and services; and Drilling and Evaluation, which provides field and reservoir modeling, drilling, evaluation and wellbore placement solutions that support the construction activities of its customers.

Halliburton provides services to an international client base, operating its business in 80 countries across the Americas, Asia Pacific, Europe, Africa, and the Middle East.

Key Partners

Halliburton works closely with a range of companies and organisations across its various operating segments and divisions. These partners can be categorised broadly as:

• Supplier and Vendor Partners, comprising suppliers of materials, equipment, tools, and technologies that are utilised in the Company’s core products and services, as well as suppliers of services that are utilised across the Company’s operating segments and divisions;
• Joint Venture Partners, comprising various oil and gas companies and service providers that provide products and services in partnerships with Halliburton through mutually owned entities;
• Research and Development Partners, comprising various oil and gas companies, research companies, and academic institutions that assist the Company in developing new processes and products;
• Strategic and Alliance Partners, comprising companies from a range of sectors that work closely with the Company, share certain resources, and collaborate on joint projects. Halliburton has launched a number of partnerships in recent years. This includes a resource development partnership with Gubkin Russian State University of Oil and Gas, an education partnership with the McCombs School of Business as the University of Texas, a technology partnership with China’s Xinjiang HDTD Oilfield Services, and a partnership with the Society of Exploration Geophysicist.

Key Resources

Halliburton’s key resources are its intellectual properties and technologies, its equipment and operating infrastructure, its IT and communications infrastructure, its sales and marketing channels, its partnerships, and its personnel.

Halliburton owns a large portfolio of patents and has a substantial number of patent applications pending, covering various products and processes. It also licenses technology covered by patents owned by others. Searches of records published by the US Patent and Trademark Office identified numerous patent applications filed in the name of Halliburton and its subsidiaries, including applications entitled ‘Selective electrical activation of downhole tools’, ‘Determining acid injection treatment parameters’ and ‘Receiving and measuring expelled gas from a core sample’.

Halliburton owns and or leases a range of properties that are key to its operations. This notably includes the Company’s network of manufacturing facilities, research and development laboratories, technology centers, and corporate offices spread across the Americas, Europe, Asia Pacific, and the Middle East.

Cost Structure

Halliburton incurs costs in relation to the development of its products and processes, the procurement of supplies and equipment, the operation of its manufacturing facilities, the maintenance of its It and communications infrastructure, the operation of its sales and marketing channels, the management of its partnerships, and the retention of its personnel.

In 2015 Halliburton recorded total operating costs and expenses in the amount of $23.80 billion. This principally included cost of services totalling $15.90 billion, as well as cost of sales totalling $5.21 billion. The Company accrued general and administrative costs in the amount of $200 million.

Revenue Streams

Halliburton generates revenue through the sale of various products and services to major, national, and independent oil and natural gas companies worldwide. This includes cementing, stimulation, intervention, reservoir modeling, drilling, evaluation, and precise wellbore placement solutions.

In 2015 Halliburton generated total revenue of $23.63 billion, down considerably on the $32.87 billion recorded by the Company in 2014. The Company attributed this decline in revenue to the depressed crude oil pricing environment. The majority of Halliburton’s revenue was generated by its Completion and Production segment, which recorded total revenue for the year of $13.68 billion. The Company’s Drilling and Evaluation segment recorded revenue of $9.95 billion.