Schlumberger Ltd. and Cameron on Thursday said they have created OneSubsea, a joint venture (JV) to leverage their expertise to manufacture a complete subsea production system from pore space to export space to unlock reserve potential from offshore developments.

The new company would offer a "step change in reservoir recovery" for the subsea industry by integrating and optimizing the "entire production system over the life of the field," the companies said. A key priority is to strengthen research and engineering investment, including complementary projects. Under the JV the partners would manufacture and develop products, systems and services for the subsea oil and natural gas market.

"Our new venture with Schlumberger provides a powerful marriage of their oilfield services technology and our subsea equipment heritage," said Cameron CEO Jack B. Moore. Cameron, which would manage the JV, would contribute its existing subsea division to OneSubsea and receive $600 million from Schlumberger. Schlumberger would contribute its Framo, Surveillance, Flow Assurance and Power and Controls businesses.

Cameron designs, manufactures and installs technology. Schlumberger, the world's largest oilfield services provider, in the offshore concentrates on well completions, subsea processing and platform integration. The agreement between Cameron (60%) and Schlumberger (40%) is subject to regulatory approval.

"This new joint uniquely positioned to optimize complete subsea production systems and help our customers improve production and recovery from their subsea developments," said Schlumberger CEO Paal Kibsgaard.

Analysts with Tudor, Pickering, Holt & Co. said in a note to clients that Schlumberger was contributing its "crown jewel" subsea pump company, Framo and the related businesses, which may indicate a "seismic shift" in offshore production systems. The "million dollar question" is the potential estimated ultimate recovery uplift from integrated production designs. Analysts said they would be "watching carefully."

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