Schlumberger reports Q3 revenue of US$ 12.6 billion

Schlumberger Limited reported third quarter 2014 revenue of US$ 12.6 billion, compared to US$ 12.1 billion in Q2 2014, and US$ 11.6 billion in Q3 2013.

Revenue and earnings

Third-quarter revenue was up 5% sequentially and increased 9% year-on-year with International Areas revenue of US$ 8.3 billion growing US$ 222 million, or 3% sequentially, while North America Area revenue of US$ 4.3 billion increased US$ 367 million, or 9% sequentially.

Income from continuing operations attributable to Schlumberger was US$ 1.9 billion, an increase of 8% sequentially and an increase of 14% year-on-year.

Commentary

Commenting on the results, Schlumberger CEO, Paal Kibsgaard said: “Strong activity in North America and robust growth in International Areas, led by Latin America and supported by Europe/Africa/CIS in spite of international sanctions in Russia, drove third-quarter results to a new record high.

“At the same time, Middle East and Asia proved highly resilient in the face of significant headwinds in Northern Iraq. All Areas and all Groups recorded growth, backed by new technology penetration and strong operational execution.

Geographical breakdown

“Geographically, results were led by North America and driven by Canada with a strong seasonal rebound on land and significantly higher east coast offshore activity. US land was also strong in spite of adverse weather. In Latin America, all markets recorded growth - particularly in Mexico, both on land and offshore - and in Argentina on unconventional resource development.

“In Sub-Saharan Europe/Africa/CIS, exploration activity in Angola and new projects in Congo and Equatorial Guinea together with a seasonal rebound in Russia more than offset a slowdown in Norway. Middle East and Asia results were solid, with strength in Saudi Arabia and Oman offsetting a significant slowdown in Northern Iraq and lower activity in India.

Sector analysis

“Among the Groups, Reservoir Production recorded the strongest sequential growth, with results led by Well Services pressure pumping activity in North America and Artificial Lift growing on revenue additions and further expansion. Completions also contributed to the quarter with stronger product sales. Drilling Group Technologies benefited from higher rig activity in many areas, stronger IPM work in Mexico, and high-technology services being deployed in a number of GeoMarkets. Testing Services technologies led growth in the Reservoir Characterisation Group, supported by stronger results for marine seismic services through the summer season although multiclient license sales fell. Overall, new technology from all Groups saw further market penetration to drive effective pricing in a competitive environment for basic services.

“During the quarter, the outlook for growth in global GDP softened somewhat on weaker data from Europe and China, although the effect of this was partially offset by strength in the US. Given the strength of the US economy and the ongoing efforts to stimulate and manage growth in Europe and China, we continue to believe that the slow but steady recovery in the world economy is intact.

Outlook?

“While market sentiments are currently driven by fear of short-term over-supply, and although the oil demand outlook has been revised slightly downwards, we see little reason at the present time to change our view that the challenges of maintaining non-OPEC supply outside North America, the lack of growth in OPEC sustainable production capacity maintaining tightness in OPEC spare capacity, and the continuing geopolitical risks in some key producing regions all lead to a supply-demand situation that is relatively well-balanced.

“Our view of the overall market continues to include a mix of economic and geopolitical headwinds and tailwinds. We therefore maintain the long-term hypothesis that we outlined in New York in June, believing in continued solid demand for our products, services, and expertise. We also firmly believe that opportunities exist for differentiated growth through new technology and greater integration, and that the transformational impact of our initiatives in reliability and efficiency will further support and accelerate our financial outperformance."

Adapted from press release by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/21102014/schlumberger-reports-q3-2014-results-1676/