Schlumberger in quarterly profit surge

Schlumberger, one of the world’s largest oilfield services providers, recorded an increase in its profit and revenues during the first quarter of 2018 when compared to the same period last year.

Namely, the company on Friday posted revenues of $7.8 billion for the first quarter of 2018, an 14% increase compared to $6.9 billion in the same period of last year.

Furthermore, net income attributable to Schlumberger was $525 million in 1Q 2018 compared to $279 million in the year-before period, which is an increase of 88%.

It is also worth mentioning that in the last quarter of 2017 Schlumberger recorded a loss of $2.3 billion.

Schlumberger Chairman and CEO, Paal Kibsgaard, commented: “Looking at the global oil market, the absence of global stock builds in the first quarter, supported by the OPEC- and Russia-led production cuts, confirm that the oil market is in balance. More importantly, after three consecutive years of dramatic underinvestment in global E&P spending, the worldwide production base has started to show the anticipated signs of weakness with noticeable year-over-year production declines appearing in several countries such as Angola, Norway, Mexico, Malaysia, China, and Indonesia.

“With Libya and Nigeria producing at near-full capacity, Venezuelan production in free fall, the potential of new sanctions against Iran, and rising geopolitical risks, the only major sources of short-term supply growth to address global production decline and strong worldwide demand are Saudi Arabia, Kuwait, the UAE, Russia, and the US shale oil industry.

“However, production challenges in US shale are emerging that are linked to infill drilling well-to-well interference, the potential lower production of step-out drilling from Tier 1 acreage, and significant infrastructure constraints. It is, therefore, becoming increasingly likely that the industry will face growing supply challenges over the coming year and a significant increase in global E&P investment will be required to minimize the impending deficit.

Looking ahead, Kibsgaard said that Schlumberger remains optimistic about the outlook for sustainable activity growth in its global business over the course of 2018 and into 2019.

He explained: “This is driven by higher customer activity and our ability to capture a major share of the emerging opportunities as performance-based contracts and integrated projects continue to gain traction as the preferred business models for many of our customers. Recent contract awards, which include the major lump-sum turnkey (LSTK) contracts in Saudi Arabia, additional wins elsewhere in the Middle East and Latin America, and new projects in the US Delaware Basin, are examples of this market trend.”

Offshore Energy Today Staff

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