Schlumberger Reports Y-o-Y 33% Decrease in Revenues

US-headquartered Schlumberger reported a 33% decrease in revenues in the first three quarters of the year with respect to the same period in 2014.

“Schlumberger third-quarter revenue decreased 6% sequentially driven by a continuing decline in rig activity and persistent pricing pressure throughout our global operations” Schlumberger Chairman and CEO Paal Kibsgaard commented in a note released on Friday. 

Schlumberger also explained that the market is progressively creating the conditions for an oil price increase, but even more complexities for oilfield services providers. 

“The fundamental balance of supply and demand continues to tighten, driven by both solid global macroeconomic growth and by weakening supply as the dramatic cuts in E&P investments are starting to take effect.  We expect this trend to continue as the oil market further recognizes the magnitude of the industry’s annual production replacement challenge” Kibsgaard continued.  

This will not automatically translate into positive news for Schlumberger, as seasonal adjustments and long-term trends might not play in favour of services companies. 

“For oilfield services, the market outlook for the coming quarters looks increasingly challenging with activity expected to be reduced further, as lack of available cash flow exhausts capital spending for a number of our customers, leading them to take a conservative view on 2016 E&P spending in spite of any gradual improvement in oil prices” Kibsgaard said. 

At the beginning of the month, after failing to receive approvals from Russian authorities, Schlumberger gave up its takeover offer for Eurasia Drilling. 

Earlier this week, The Financial Times reported that Eurasia Drilling Co. (EDC) minority shareholders could soon go to court to challenge the management’s buyout proposal. Last week, core shareholders filed a Merger Proposal.

According to some reports, Schlumberger is still trying to buy a stake in Russia’s EDC stake.