The world’s largest oilfield services company said Friday it’s continuing to grow its revenues in North American shale and even internationally as the industry slowly creeps toward a rebound.
Schlumberger’s second-quarter progress is primarily driven by the booming U.S. onshore market, especially in West Texas’ Permian Basin. The company’s onshore North American revenue jumped a whopping 42 percent from the first quarter of the year.
That compares favorably to a 23 percent increase in the active U.S. drilling rig count during the same period, noted Schlumberger Chief Executive Paal Kibsgaard.
But despite Schlumberger’s second-quarter revenues of $7.46 billion showing positive growth, the energy giant still posted a quarterly loss of $74 million because of $510 million in one-time impairment charges, primarily from its work in Venezuela, which remain mired in political and economic turmoil.
The relatively small loss compares favorably to a massive $2.2 billion loss during the second quarter last year, but less than a $279 million gain during the first quarter of 2017.
Still, Schlumberger touted its 8 percent revenue gain from the first quarter and a 4 percent improvement versus last year.
Even with U.S. oil prices remaining mired below $50 a barrel, Kibsgaard sees positive gains.
“Despite the significant costs associated with reactivating equipment, all of our U.S. land product lines were profitable in the second quarter, driven by higher pricing, market share gains, improved operational efficiency, timely resource additions, and proactive supply chain management,” he said.
The biggest boost of all came from a 68 percent jump in U.S. revenues from hydraulic fracturing, or fracking, as the industry heats back up.
Schlumberger’s international revenues even jumped 4 percent from the first quarter.
“While the activity outlook in North America for the second half of the year remains robust, we are now also seeing more positive signs in the international markets with increases in activity, Kibsgaard said.
“The strengthening in the international markets has so far been concentrated around land activity in Western Siberia and in the OPEC Gulf countries, but we are now also seeing an increasing number of new offshore projects being prepared … in many of the world’s shallow water basins.”
As part of this focus, Schlumberger announced late Thursday it’s doubling down on its Russian investments by acquiring a majority ownership stake in the Eurasia Drilling Co.
Schlumberger started a strategic alliance with the Russian oilfield services giant in 2011, and planned in 2015 to buy a 45.6 percent stake in Eurasia for $1.7 billion. But that deal fell through amid Russian regulatory concerns. Schlumberger is now planning to acquire a 51 percent stake in Eurasia.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more click here.