The largest provider of oilfield services, Schlumberger (NYSE: SLB), reported better-than-expected earnings for the fourth quarter on Friday and, like its rivals Halliburton and Baker Hughes, expects spending and activity levels to gain momentum this year.
Schlumberger’s earnings per share (EPS), excluding costs and credits, rose 37 percent, respectively, to $ 0.22, beating Refinitiv IBES ‘$ 0.17 estimates.
Schlumberger’s revenue also rose 5 percent, driven by strong activity and good execution in North America and international markets. Revenue in North America rose 13 percent in the fourth quarter compared to the third quarter.
The three largest oilfield service providers in the world – Schlumberger, Halliburton and Baker Hughes – all reported losses for the third quarter. However, the losses were significantly lower than those in the second quarter, ‘the most challenging quarter in recent decades’, as Schlumberger CEO Olivier Le Peuch said. The losses were lower between July and September, also due to massive cost savings after oilfield services companies laid off tens of thousands of workers.
For the fourth quarter, all three oilfield service providers reported this week that revenue has risen from Q3, expressing their optimism that demand for oil as well as drilling activity will increase this year. Baker Hughes posted its first quarterly net profit since oil prices plunged in March, while Halliburton reported adjusted net income, with North America’s revenue up 26 percent to $ 1.2 billion, respectively.
Schlumberger expects oil demand to recover no later than 2023 or earlier by 2019, Le Peuch announced in Q4 earnings today.
‘In North America, spending and activity momentum in the first half of 2021 will continue toward 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 the strengthening of demand for oil, higher spending is expected from the second quarter of 2021. Accelerated activities will extend beyond the short-cycle markets and will be broad, including overseas, as seen in the fourth quarter, ”said Le Peuch.
By Charles Kennedy for Oilprice.com
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