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The largest oilfield services provider, Schlumberger (NYSE: SLB), reported on Friday better-than-expected earnings for the fourth quarter and, like its rivals Halliburton and Baker Hughes, expects spending and activity levels to gain momentum this year.
Schlumberger’s revenue also rose, by 5 percent sequentially, driven by strong activity and solid execution both in North America and in the international markets. Revenue in North America increased by 13 percent in Q4 compared to Q3.
The three largest oilfield services providers in the world—Schlumberger, Halliburton, and Baker Hughes—all reported losses for the third quarter. Yet, those losses were significantly lower than the ones seen in the second quarter, “the most challenging quarter in past decades,” as Schlumberger’s chief executive Olivier Le Peuch had said. The losses were lower between July and September also because of massive cuts in expenses after oilfield services companies laid off tens of thousands of workers.
For Q4, all three oilfield services providers reported this week revenues rising from Q3, and expressed optimism that oil demand, as well as drilling activity, will pick up this year. Baker Hughes booked its first quarterly net profit since oil prices crashed in March, while Halliburton reported adjusted net income, with North America revenue rising by 26 percent sequentially to $1.2 billion.
Schlumberger expects oil demand to recover to 2019 levels no later than 2023 or earlier, Le Peuch said in the Q4 earnings release today.
“In North America, spending and activity momentum will continue in the first half of 2021 towards maintenance levels, albeit moderated by capital discipline and industry consolidation. Internationally, following the seasonal effects of the first quarter of 2021, and as OPEC+ responds to strengthening oil demand, higher spending is expected from the second quarter of 2021 onwards. Accelerated activity will extend beyond the short-cycle markets and will be broad, including offshore, as witnessed during the fourth quarter,” Le Peuch said.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com