Flowserve (FLS) and Dresser-Rand (DRC) Dominate Oil/Gas Niches

By Guest Author: Robert Williams, PhD, P.E.

There are many companies involved in all aspects of the oil/gas industries but very few gain a significant market dominance. Some achieve this by acquisitions of various significant companies. Referring back to the last oil/gas industry perspective re: automation companies, an example of such acquisition is Emerson Process Control acquiring Rosemount instrumentation which has extensive, and some cases, an exclusive market within the industry. Similarly, with the two companies listed in this industry perspective. Their corporate history is too diverse to elaborate on in this brief article and hyperlinks are provided to their individual websites at each company name.

We should point out that Self Investors market specialist Tate Dwinnell has featured these companies but they are not currently included in the Model Portfolio.

Since all companies are categorized into industry groups, e.g. DRC – Diversified Machinery, there is no explanation as to the significance of each company within that industry group. The intent of this industry perspective is to increase the reader’s awareness in this respect.

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Major oil companies have installed so many of these companies’ products that they become standardized in that product. Consequently, due to standardized engineering, operation, maintenance and training any new project becomes a sole source for that product. A prime example would be centrifugal compressors on natural gas pipelines and jet pumps in refinery delayed coking process.

Dresser-Rand Group Inc.(DRC) is the global supplier of custom-engineered rotating equipment solutions for the applications in the oil, gas, petrochemical and process industries. The products and service applications include oil and gas production; high-pressure field injection, gas lift, and enhanced oil recovery; natural gas processing; gas liquefaction; gas transmission and storage; refining; petrochemical production; and general industrial markets, such as paper, steel, sugar, distributed power and United States Navy. The Company operates globally with manufacturing facilities in the United States, France, United Kingdom, Germany, Norway, China and India. It operates a range of products and clients to the global client base in over 140 countries from the global locations in 18 US states and 26 countries.

DRC is a global leader in the turbo-machinery market, providing compressor and gas power turbine technology for the following primary industries: gas lift/injection, gas gathering/storage/transmission, ethylene, fertilizer, refineries and chemical production. Dresser-Rand has delivered in excess of 2000 gas turbine driver packages for generators and compressors world-wide. DRC also provides gas turbines which are used for base load and standby power generation applications. More than 900 of gas turbine units have been supplied into over 62 countries.

The concern about carbon dioxide emitted by traditional coal-fired power plants can be alleviated by the fairly new technology known as carbon capture and storage which offers a viable method to capture most of that carbon dioxide gas and store it underground. DRC has the technology to help reduce carbon dioxide emissions by the carbon capture and storage process.

:::: >>> Get More Dresser-Rand Analysis Here

Flowserve Corporation (FLS) is a manufacturer and aftermarket service provider of comprehensive flow control systems. The Company is engaged in developing and manufacturing precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications. Through the manufacturing platform, the Company offers a range of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting. The Company operates in three business segments: flow serve pump division for engineered pumps, industrial pumps and related services; flow control division for engineered and industrial valves, control valves, actuators and controls and related services, and flow solutions division for precision mechanical seals and related products and services. In April 2009, the Company acquired CALDER AG.

In the oil and gas industry FLS has provided equipment for crude oil handling and treatment, heavy oil steam processing, sub-sea developments, water injection recovery and water handling and treatment. In the refining world they are involved with hydro-cracking, distillation, delayed coking, etc., for transportation – crude oil and petroleum products pipelines and gas processing involving LNG, NGL, GTL (gas to liquids) and natural gas processing/treatment. For these process applications FLS provides pumps, valves, seals, instrumentation, actuators and steam systems.

:::: >>> Get More Flowserve Analysis Here

Earnings Estimates

DRC                                              FLS

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Please peruse the following DRC and FLS stock charts and refer to your strategic stock trading plan as to when to invest, if at all.

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Author Bio

Robert is a valued contributor to Self Investors and provides great insight into the oil industry.  He has 40 years of experience which includes oil/gas engineering in crude oil/petroleum products/natural gas, refining, processing and pipelines on all continents, except South America and Antarctica, from Alaska and Australia pipelines to S.E. Asia offshore, from UK North Sea to Los Angeles fuel truck racks and from Romanian pipelines to West Africa FPSO.

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