The largest oil service provider, Schlumberger (NYSE: SLB), reported better-than-expected gains for the fourth quarter on Friday and, like rivals Halliburton and Baker Hughes, expects spending levels and activity gain momentum this year.
Schlumberger’s earnings per share (EPS), excluding charges and credits, rose 37 percent sequentially to $ 0.22, surpassing Refinitiv IBES ’$ 0.17 estimates.
Schlumberger’s revenues also rose, 5 percent sequentially, driven by strong activity and strong performance in both North America and international markets. Revenue in North America increased 13% in the fourth quarter compared to the third quarter.
The world’s three largest oil field service providers – Schlumberger, Halliburton and Baker Hughes – reported losses during the third quarter. However, these losses were significantly lower than those recorded in the second quarter, “the most challenging quarter in decades,” as Olivier Le Peuch, CEO of Schlumberger, had said. Losses were lower between July and September also due to massive cuts in spending after oil service companies fired tens of thousands of workers.
During the fourth quarter, the three oil field service providers reported this week that revenue has risen since the third quarter and expressed optimism that oil demand, as well as drilling activity, will increase this year. Baker Hughes posted its first quarterly net profit since oil prices crashed in March, while Halliburton reported an adjusted net profit, with U.S. revenue rising 26% sequentially to 1.2 trillion. dollars.
Schlumberger expects oil demand to recover to 2019 levels by 2023 or earlier, Le Peuch said in its fourth-quarter 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, after the seasonal effects of the first quarter of 2021 and, as OPEC + responds to the strengthening of oil demand, higher spending is expected from the second quarter of 2021. The activity accelerated will extend beyond short-cycle markets and will be broad, including offshore, as evidenced during the fourth quarter, ”said Le Peuch.
By Charles Kennedy for Oilprice.com
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