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Schlumberger cuts spending by 30%

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Oilfield Technology,

As reported by Reuters, Schlumberger is to cut spending by 30% this year from last year’s levels in response to the Covid-19 pandemic and the Saudi-Russia oil price war.

The company expects a rapid reduction in active drilling and hydraulic fracturing activity, estimating the number of rigs in operation could fall to levels last seen during the 2016 downturn.

Oil prices have fallen by more than half this year, diving below US$24/bbl on Tuesday, as coronavirus curtails demand and top suppliers Saudi Arabia and Russia began pumping full bore to grab share in a slumping market.

The twin supply and demand shocks have driven major oil companies to slash spending by up to 50% this year and pushed oilfield services providers for price cuts.

Earlier this year, Schlumberger had already outlined an aggressive cost-cutting strategy for North American operations, which CEO Olivier Le Peuch on Tuesday said positioned the firm for the latest downturn in prices.

The company said the spread of coronavirus would likely impact some field crews and operations, and it was preparing for logistical disruptions as countries implement restrictions.

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