In a sector where projects routinely surpass the billion-dollar mark, contractors in the petroleum sector are on a different playing field from their counterparts in other sectors. Acutely influenced by the vagaries of global economics and expanding geographically into tougher, more remote project locations, the oil and gas market has contractors engaged in a spate of acquisitions and mergers as they aim to bolster resources and enhance skills needed to leverage project opportunities.

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It is the nature of the oil and gas markets, which often call for massive projects that come with a dizzying array of stakeholders and complex logistics, that is spurring the surge of consolidation, says Rob Smith, a senior vice president at Denver-based CH2M-Hill Cos. CH2M Hill has made three recent firm acquisitions to increase its capacity and capabilities in the oil and gas market. “The bottom line in this market is you need a lot of resources,” Smith says. “Scale is important to clients too. They want to know that you have the scale to deal with billions of dollars in risk.” In the past year, CH2M-Hill has acquired Anchorage, Alaska-based Veco Corp., Denver-based Trigon Co. and Houston-based Goldston Engineering Inc.

Mike Collier, vice president at Houston-based Willbros Group Inc., says his firm acquired Midwest Management Limited, a Canadian pipeline and facilities construction company, and Tulsa-based Integrated Services Co. (InServ) last year. In addition to expanded resources and capabilities, the acquisitions “expand our geographic presence and gives us access to new markets,” says Collier