SLB, the world’s biggest oil-services provider, posted its first sequential dip in North American sales since the start of 2021 as explorers ramp up spending in the Middle East and elsewhere in the world.
(Bloomberg) — SLB, the world’s biggest oil-services provider, posted its first sequential dip in North American sales since the start of 2021 as explorers ramp up spending in the Middle East and elsewhere in the world.
The Houston-based contractor that helps clients drill oil wells and map underground pockets of crude, anticipates its overall sales to grow in the final three months of the year, it said Friday in a statement. SLB posted quarterly earnings that surpassed expectations after excluding certain items. Shares fell 1.8% in pre-market trading in New York.
“The oil and gas industry continues to benefit from a multiyear growth cycle that has shifted to the international and offshore markets where we are the clear leader,” Chief Executive Officer Olivier Le Peuch said in the statement. “Upstream spending is accelerating as operators continue to invest in long-cycle developments, production capacity expansions, exploration and appraisal, and enhanced gas production.”
SLB, formerly known as Schlumberger, is seen as a bellwether for the oil-and-gas industry, with its operations in oilfields across the world providing an insight into the health of the broader energy sector that relies on fossil fuels. SLB is the first of the biggest oilfield contractors to post third-quarter results, with rivals Baker Hughes Co. and Halliburton Co. scheduled to report next week.
Oilfield contractors are pivoting to more work overseas amid a slowdown in US shale activity. SLB gets more than three-quarters of its sales from outside North America. A 19% drop in US oil rigs so far this year has investors wondering when service companies will be able to replace that lost revenue.
“There likely won’t be a parabolic inflection in the US land rig count, but confirmation of this just moving incrementally higher should be enough to give investors confidence that pricing and margins are stabilizing to possibly moving higher,” Luke Lemoine, an analyst at Piper Sandler, wrote Oct. 15 in a note to investors.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.