New Western Atlas division raises eyebrows in oil patch. (Western Atlas International Inc.)

Exploration and production unit blurs line between traditional oil companies and service firms

Western Atlas International Inc. stirred up the oil patch last month by creating an exploration and production services division.

The Houston-based oil services company will now accept compensation based on sharing the risks and rewards of finding and developing energy reserves. The move pushes Western Atlas to the brink of being an oil company without crossing the line.

The new division blurs the line between traditional companies that develop reserves and the service firms that support these efforts. Oil companies get understandably nervous when service firms …