Schlumberger Books Third Loss This Year As Oil Crisis Bites

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The world’s largest oilfield services provider, Schlumberger (NYSE: SLB), reported on Friday its third consecutive quarterly loss this year as exploration and production companies drastically reduced demand for drilling in the U.S. and elsewhere due to the low oil prices and weak oil demand

Schlumberger booked a loss of US$82 million for the third quarter. The loss was much narrower than the second-quarter loss of US$3.434 billion, which was the second straight quarterly loss on the back of a dramatic revenue slump in U.S. shale and asset impairment charges in what “has probably been the most challenging quarter in past decades,” as CEO Olivier Le Peuch said in July.  

While the Q3 loss was much lower than in Q2, revenues at Schlumberger still declined in Q3 compared to Q2. Revenue declined by 2 percent sequentially, with North American revenue down 2 percent and international revenue down by 1 percent.

Compared to the same quarter last year, the revenue decline was dramatic—down by 59 percent in North America and down by 27 percent elsewhere.

Schlumberger’s exposure to North America is lower than that of Halliburton, for example. Moreover, Schlumberger said last month it was selling its North American fracking business to Liberty Oilfield Services for a minority stake in a new combined company after the oil price crash crushed the U.S. shale patch’s fracking activity.

Looking to the fourth quarter, CEO Le Peuch commented in the results release today:

“In North America, the conditions are set for continued momentum, with improving DUC well completion activity in US land and a modest drilling resumption in the US and Canada.”

“Overall internationally, we view the next two quarters as a period of transition for our industry at the trough of this cycle,” the executive said, but warned that “the near-term recovery remains fragile owing to potential subsequent waves of COVID-19 that could pose a significant risk to this outlook.”