Schlumberger Sees International Growth as Key in Transitional Year
The contractor expects international revenue will see double-digit growth in the second half of 2021 as compared to the same period last year.
Schlumberger bested analysts' estimates for the first quarter of 2021 in a face of lower revenues impacted somewhat by divestitures in recent months. The oilfield services giant reported revenue of $5.2 billion for the quarter, down 30% year-over-year and 6% lower sequentially. Net income for the 3-month period, excluding charges and credits, was $299 million, or 21 cents per share. Analysts had anticipated earnings of 19 cents per share, according to IBES data from Refinitiv.
The contractor sees the North American activity leveling off at production maintenance levels in 2021 as oil demand gradually returns. The region accounted for just 19% of revenue during the first quarter of the year compared to almost 30% last year. The company expects the best opportunities for growth in 2021 will be in international markets.
“International activity is poised to ramp up through year-end 2021 and beyond,” said Schlumberger Chief Executive Officer Olivier Le Peuch. “We expect to significantly benefit from this anticipated shift to increased international activity due to the strength and breadth of our international franchise. Consequently, we are increasingly confident that our international revenue will see double-digit growth in the second half of 2021 as compared to the same period last year, which implies potential upside to the already robust growth that is anticipated in 2022 and beyond.”
Late last year, Schlumberger sold OneStim, its North American pressure pumping business, to Liberty Oilfield Services in exchange for a 37% stake in the company. The divestment was part of Schlumberger’s larger corporate shift toward high-grading and rationalizing its business portfolio to expand margins, minimize earnings volatility, and focus on less capital-intensive businesses.
“Looking ahead, we continue to be encouraged by constructive macroeconomic drivers,” added Le Peuch. “While the world is still grappling with COVID-19 infection rates, vaccination programs and fiscal stimulus packages are expected to support a rebound of economic activity and oil demand recovery through the year.”
Schlumberger continues to push both digital and physical boundaries with the research into and the development of products and services designed to improve decision-making processes as well as more efficient operations in the field.
Recently, Schlumberger and Equinor announced a strategic project, in collaboration with Microsoft, to deploy Schlumberger’s DELFI cognitive E&P environment with seamless integration to the contractor’s OSDU Data Platform – a software solution for storing, organizing, migrating, and accessing subsurface data. This is the first major deployment of the OSDU Data Platform, which will streamline strategy planning for Equinor.
In Mexico, Schlumberger is collaborating with Pemex, using a new digital workflow that can accelerate the time from prospect lead to drilling by identifying and de-risking exploration opportunities in weeks rather than months. Enabled by the DELFI environment, the work flow—called prospect-focused imaging—is helping Pemex more quickly generate value from its assets in the Gulf of Mexico Campeche Basin.
During the first quarter, Schlumberger subsidiary OneSubsea built the first all-electric manifold for the BP Trinidad and Tobago LLC Matapal gas project. It is a combination of a block valve manifold design and standard interfacing drop-in-place electric actuators. The contractor called the project a major milestone in its electric technology roadmap.