OIL & GAS LOSSES! Schlumberger Posts $10B Loss in 2019

[ceo_energemsier + 1,818]

Schlumberger Posts $10B Loss in 2019

 

 

 

was $2.5 billion, a 14 percent sequential decline due to customer budget exhaustion and cash flow constraints.

In its North America land market, Schlumberger implemented what it refers to as the “scale-to-fit” strategy, which includes reducing capacity and restructuring the company’s operations.

“In North America, we are continuing to scale-to-fit our organization and portfolio by repurposing or exiting underperforming business units, focusing on asset-light operations and expanding our technology access business models,” said Le Peuch. “In alignment with our stated strategy, we are cautiously optimistic that the high-grading of our portfolio will promote margin expansion and the improvement of returns in the North America land market. It has also led to the closing of a significant number of facilities and, unfortunately, workforce reductions.”

[Douglas Buckland + 6,308]

Read...North American operations are slowing down significantly.

Keep in mind that the ‘health’ of an oilfield is not associated with the wellbeing of the operators, but in the ‘health’ of the third party service companies. Operators generally do not have the ability to drill, cement, log or perform ANY of the operations to construct or complete their wells.

If the service companies are downsizing in or leaving a region it will become extremely difficult for any operator to pursue a drilling campaign. Furthermore, it will become more expensive as the third parties will want payback for the years the operators hammered the service company rates in an effort to get their cost per barrel down.

Of course, in the oilfield, what goes around comes around. When oil was around $100/bbl, the service companies were ‘raping’ the operators....

[wrs + 893]

Well the day rates for rigs were still running over $20k/day as recently as October so I don't think they are getting "raped" by the operators.

[0R0 + 6,251]

I guess they are not expecting a substantial rise in oil prices any time soon. If they did, they would have figured out some way to hold on to operational capacity rather than exit weak geographies. 

[Tom Kirkman + 8,860]

9 hours ago, 0R0 said:

I guess they are not expecting a substantial rise in oil prices any time soon. If they did, they would have figured out some way to hold on to operational capacity rather than exit weak geographies. 

Sounds about right.