Schlumberger Records Flat Second Quarter

US oilfield services operator Schlumberger announced July 19 flat financial results for the second quarter of 2019, but the company noted that it is benefitting from an international recovery of exploration and production.

Net income under GAAP standards rose by 14% year on year to $492mn, although the inclusion of credits and charges saw profit fall by 17%. Revenue was flat at $8.3bn, as sales in North America dropped 11% to $2.8bn but international market revenue swelled by 8% to $5.5bn.

The company noted that these divergent results were a result of differing rates of E&P activity. In North America, E&P operator cash flow constraints have trimmed land investment, although offshore activity remains robust. International investment, meanwhile, is experiencing “a broad upturn in E&P investment and activity … in response to the accelerating decline of the mature production base,” a company statement reads.

“These results reflect the normalisation in global E&P spend that we were anticipating,” said CEO Paal Kibsgaard.

“Double-digit year-over-year growth during the first half of 2019 was posted in the Mexico & Central America, Latin America North, Sub-Sahara Africa, and Far East Asia & Australia GeoMarkets,” he continued, “while high, single-digit growth was seen in the United Kingdom & Continental Europe, Eastern Middle East, and South & East Asia GeoMarkets. Our results, therefore, continue to match our expectations of high, single-digit growth across our international business in 2019.”

From a macro perspective, Schlumberger expects oil market sentiments to remain balanced, the CEO added. “The oil demand forecast for 2019 has been reduced slightly on trade war fears and current global geopolitical tensions, but we do not anticipate a change in the structural demand outlook for the mid-term,” he said.

Schlumberger expects international E&P investment to grow 7-8% in 2019, while spending in North American onshore is set for a 10% decline.