With operations in over 1,160 locations worldwide, National Oilwell Varco (NOV 0.32%) is a leading provider of equipment and services to the oil and gas industry through its three segments; Rig Technology, Petroleum Services & Supplies, and Distribution & Transmission. CEO Merrill "Pete" Miller has held a number of senior executive positions with NOV, beginning in 1996. Miller also serves on the boards of Chesapeake Energy Corporation (CHKA.Q), Offshore Energy Center, Petroleum Equipment Suppliers Association, and Spindletop International.
National Oilwell Varco traces its roots back to the 1840s. In this video segment Miller explains the company's development over the years, where it saw its opportunity, and how it used its acquisition strategy to position itself as a leading supplier to the oil and gas industry worldwide. The full version of the interview can be found here.
A full transcript follows the video.
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Taylor Muckerman: Just to touch on your company now a little bit more specifically, acquisitions are obviously a big part of your current business model, and in the past. I'm just wondering if a light bulb suddenly went off, or if that was your ultimate goal from the get-go, of you coming on with National Oilwell Varco to try and build that standard operating procedure for rigs, worldwide.
Miller: Absolutely. We had a vision, and that vision goes back to 1996.
NOV is actually a fairly old company. The oldest part of us dates to the 1840s and the oil well side of it dates to 1863 with Colonel Drake, so we've been around for a long time.
But the modern version of NOV started in about 1996 and, quite frankly, the whole industry was coming out of a terrible -- I won't even call it recession; it was a depression -- from about the early '80s to the mid '90s. This was a tough, tough business, and a lot of companies that made equipment went out of business. They went by the wayside.
We could see what was going to happen in the future. Equipment, anything mechanical, wears out. You can't say that it's going to last forever. It won't last forever, so it wasn't exactly rocket science. What we did is we started going out and buying distressed companies.
We were able to bring them together -- if you look at the things that we did in the late '90s, early 2000s -- and then probably the game changer for us was when Varco and National Oilwell came together. That was in 2005.
Then in 2008 we bought Grant Prideco, which gave us even more, and then in the interim there we were buying an awful lot of different (unclear) companies. We probably, in the last 12 years, have done 300 acquisitions, but every one had a specific purpose, and every one was part of a strategy to be the manufacturer for the oilfield.
Other people didn't want to do it. Schlumberger (NYSE: SLB) didn't want to be the manufacturer. Halliburton (NYSE: HAL) didn't want to. They were doing other things; that's OK. That's what we wanted to do, so let us have it, and now we've become the predominant manufacturer in the oil field.
