Monday, November 20, 2017

Schlumberger, Baker Hughes Warn of N. America Slowdown

Posted by October 20, 2017

Schlumberger Ltd and Baker Hughes, the world's top two oilfield services firms, warned on Friday of a slowdown in North America and a challenging year ahead as crude oil prices stay volatile.
 
Schlumberger said investments in North America were moderating as energy companies increasingly shied away from chasing higher production at the cost of financial returns.
 
"Oil prices remain volatile and, as a result, our customers remain cautious," Baker Hughes Chief Executive Lorenzo Simonelli said.
 
The company, in its first report to include GE Co's oil and gas business since their merger, reported a quarterly profit that missed analysts estimates by a wide margin.
 
Schlumberger reported a 53 percent jump in revenue from North America, its biggest market, in the latest quarter, but cautioned that activity had been slowing.
 
"In the U.S. Gulf of Mexico, activity continued to weaken in the third quarter, and the outlook remains bleak for this region based on current customer plans," Schlumberger said.
 
The company's results and warnings come amid slowing drilling activity in North America.
 
U.S. rig counts have been falling for several weeks and recently hit a four-month low, while production has grown at a slower rate than the U.S. Energy Information Administration's estimate.
 

Shares of both companies were volatile in premarket trading. Schlumberger was last up 0.16 percent, while Baker Hughes were down just over 1 percent.

 

Reporting by Nivedita Bhattacharjee and Yashaswini Swamynathan 

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