The oil service industry: who supplies what, and how to read the figures

Who the suppliers are

The service and supply industry provides goods and services to the oil companies in every phase of a field's life. It is usually the operator, the company that runs the work on the field, that selects the suppliers and signs the contracts. The Norwegian industry consists of roughly 2,000 companies. According to a study by Rystad Energy, its turnover was NOK 374 billion in 2020, of which about 30 % came from international markets (norskpetroleum.no, read 5 Oct 2026).

According to norskpetroleum.no, the needs change with the phases:

• Exploration: seismic surveys, data processing, geological and geophysical services, drilling rigs and well services.
• Development: engineering services, platforms built at yards, and equipment packages that are manufactured and installed.
• Operations: vessels, maintenance and other services. Production can last for decades, so there are also larger upgrades, such as new processing equipment and more wells.

When a field shuts down, the wells must be plugged and the installations removed or otherwise disposed of, which is also work for suppliers. Suppliers' revenue is the oil companies' costs. On norskpetroleum.no, costs on the shelf are divided into investments, operating costs, exploration costs, and decommissioning and disposal costs. Which of these a company lives off says a lot about how much its revenue will swing.

The segments

• Seismic and geodata: acquiring and processing seismic, either for one oil company or at the supplier's own risk for sale to several (multi-client data). Example: TGS.
• Drilling and wells: drilling contractors such as Odfjell Drilling and Borr Drilling hire out rigs with crews. Well service companies provide cementing, logging and well completion, among other things.
• Subsea: equipment such as templates, Christmas trees and control systems, and installation of pipelines, risers and umbilicals from construction vessels. Example: Subsea 7.
• Yards and fabrication: building topsides, substructures and modules.
• Engineering, maintenance and modifications: studies, engineering and work on installations in operation. Aker Solutions provides studies and engineering services as well as maintenance, modifications and decommissioning, among other things.
• Vessels and production ships: DOF Group has offshore vessels and subsea services, and BW Offshore leases out and operates production ships (FPSOs).

Distinguish between suppliers that own expensive assets, such as rigs, vessels and production ships, and suppliers that mainly sell hours and expertise. The first group has high fixed costs and often a lot of debt, so its results swing with dayrates and utilisation. The second can adjust staffing more easily but takes risk in fixed-price contracts. Large suppliers are often in several segments and countries, so read the segment reporting.

Project phases and the PDO

The authorities divide the planning of a development into three stages (PDO/PIO guidelines, 2022). Feasibility studies end with the decision to concretise (BOK). Concept studies lead to the decision to continue (BOV), when one concept has been selected. Pre-engineering, usually called FEED (front-end engineering and design), matures the solution up to the investment decision, the decision to implement (BOG). The plan for development and operation (PDO) is then submitted.

Two rules matter for suppliers. Material contractual commitments may not be entered into, and construction work may not start, before the PDO is approved, unless the Ministry of Energy consents. Licensees that obtain consent do so at their own risk. The PDO must also describe the contract strategy and how suppliers will be selected (PDO/PIO guidelines). The large development contracts are therefore closely tied to investment decisions. The rest of the road from discovery to field is in the guide to offshore installations.

Contract types and who carries the risk

The contract decides who pays when something goes wrong:

Norsk Industri and Offshore Norge have had a joint board for standard contracts on the shelf since 2012. The Norwegian Total Contract NTK 25 is recommended when the supplier is responsible for engineering, procurement, construction and possibly installation of large components, known as EPC or EPCI. The client can issue variation orders, and the supplier must start the work even if the price has not yet been agreed. If the work is late at agreed milestones, the supplier pays liquidated damages, up to a cap filled in for each contract (NTK 25, 5 Dec 2025).

A fixed-price contract can give a good margin, but also large losses. Under the accounting standard IAS 37, a provision must be made for an onerous contract, one where the unavoidable costs of meeting it exceed the benefits expected from it. A project that goes badly can therefore cause a large one-off loss in a single quarter.

Reading a supplier's quarterly report

• Order intake: the value of new contracts in the period, often including increases in contracts the company already has. A large frame agreement can give a high order intake in one quarter even though the work is spread over many years.
• Order backlog: the value of contracted work not yet performed. Companies calculate it differently, especially for options and frame agreements, so read the definition. Look at when the work is due as well; some companies split the backlog by year.
• Book-to-bill is order intake divided by revenue in the same period. Above 1 means the backlog is growing.
• Revenue on long contracts is usually recognised as the work is performed (IFRS 15), while payments follow the payment schedule. Profit and cash flow can therefore diverge.
• Margins, for example earnings before interest, tax, depreciation and amortisation (EBITDA) as a percentage of revenue, should be read by segment. Look out for one-off items such as provisions for onerous contracts.
• For rig and vessel owners: utilisation and dayrates, see the guide on the rig market.

Order intake, backlog and book-to-bill are alternative performance measures, not accounting line items.

What drives the cycle

• Investments drive the development side: engineering, yards, subsea and installation. Investments on the shelf, excluding exploration, were NOK 243 billion in 2025 and are estimated at NOK 230 billion in 2026 and NOK 212 billion in 2027 (norskpetroleum.no, read 5 Oct 2026).
• Exploration activity drives demand for seismic, rigs and well services.
• Operations give steadier demand for maintenance, modifications and vessels, because producing fields must be maintained.
• The oil price works with a lag. Oil companies invest on the basis of the prices they expect over a field's life, and it takes years from decision to production. If prices fall sharply, new projects may be postponed. That shows up first in order intake and later in revenue. Total costs on the shelf were at a record high in 2014, and after the oil price fall that year the supply industry went through several years of transition (norskpetroleum.no, read 5 Oct 2026).
• Tax and policy can bunch decisions together. The temporary changes to the petroleum tax from 2020 applied, among other things, to investments in developments with plans delivered before 1 January 2023 and approved before 1 January 2024 (norskpetroleum.no, read 5 Oct 2026).
• Other markets, such as work abroad and offshore wind, can dampen or amplify the swings at home.

On the analysis page you can compare a supplier's share price with Brent under stock versus oil price.

Where to find the figures

• The service and supply industry and investments and operating costs on norskpetroleum.no, run by the Ministry of Energy and the Norwegian Offshore Directorate.
• Statistics Norway publishes the operators' estimates of oil and gas investments every quarter, split into exploration, field development, fields on stream, and shutdown and removal, among others.
• Quarterly reports are on the companies' investor pages and in the stock exchange announcements on Newsweb. The calendar on the analysis page shows when they are published.
• NTK 25 and the other standard contracts are published by Offshore Norge and Norsk Industri.
• Fields under development are on the field pages. See also the guides on annual reports and the rig market and offshore vessels.

Sources

• The service and supply industry – norskpetroleum.no – number of companies, turnover in 2020, what is supplied in each phase and the transition after 2014, read 5 Oct 2026
• Investments and operating costs – norskpetroleum.no – cost categories, investments 2025–2027 and the 2014 peak, read 5 Oct 2026
• Guidelines for PDO and PIO (Ministry of Petroleum and Energy and Ministry of Labour and Social Inclusion, 12 Sep 2022, in Norwegian) – feasibility studies, concept studies and pre-engineering, contracts before PDO approval, contract strategy
• Norwegian Total Contract 2025 (NTK 25) – Norsk Industri and Offshore Norge, 5 Dec 2025 – standard contract board, EPC(I), variation orders and liquidated damages
• Petroleum tax – norskpetroleum.no – the temporary tax changes from 2020
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets – IFRS Foundation – onerous contracts

The guides are written by OESA students to explain concepts and how things fit together. They are not investment advice. Figures that are not definitions carry a source and a date; if you find an error, let us know at philipstave@oesa-global.com.