The largest oil service provider, Schlumberger (NYSE: SLB), reported better-than-expected earnings for the fourth quarter on Friday and, like rivals Halliburton and Baker Hughes, expects spending and activity to gain. momentum this year.
Schlumberger’s earnings per share (EPS), excluding expenses and loans, increased 37% sequentially to $ 0.22, exceeding Refinitiv IBES ‘$ 0.17 estimates.
Schlumberger’s revenues also increased by 5% sequentially, driven by strong activity and strong execution both in North America and in international markets. North American revenues increased 13% in Q4 compared to Q3.
The world’s three largest oil service providers – Schlumberger, Halliburton and Baker Hughes – reported losses for the third quarter. However, these losses were significantly lower than those observed in the second quarter, “the most challenging quarter in decades,” as Schlumberger CEO Olivier Le Peuch had said. Losses were lower between July and September, also due to massive cuts in spending after oil service companies laid off tens of thousands of workers.
For the fourth quarter, all three service providers for the oil industry this week reported rising revenues from the third quarter and expressed optimism that oil demand, as well as drilling, will increase this year. Baker Hughes posted its first quarterly profit since oil prices plummeted in March, while Halliburton reported adjusted net income, with North American revenue rising 26% sequentially to $ 1.2 billion.
Schlumberger expects oil demand to return to 2019 levels by 2023 or sooner, Le Peuch said in today’s Q4 earnings statement.
“In North America, the momentum of spending and activity will continue in the first half of 2021 towards maintenance levels, although moderated by the discipline of capital and the consolidation of industry. Internationally, as a result of seasonal effects in the first quarter of 2021 and as OPEC + responds to stronger oil demand, higher spending is expected from the second quarter of 2021. Accelerated activity will extend beyond markets with a short cycle and will be extended, including offshore, as seen in the fourth quarter, “said Le Peuch.
By Charles Kennedy for Oilprice.com
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