Schlumberger has said it expects 2016 to be another tough year for the oil fields services market.
Outlining its Q3 2015 results, it reporting revenue of $8.47bn, a drop of 33% from $12.64bn a year ago, and 6% from the second quarter of 2015, due to a continuing decline in rig activity and persistent pricing pressure.
“….. for oilfield services, the market outlook for the coming quarters looks increasingly challenging with activity expected to be reduced further, as lack of available cash flow exhausts capital spending for a number of our customers, leading them to take a conservative view on 2016 E&P spending in spite of any gradual improvement in oil prices,” said Schlumberger chairman and CEO Paal Kibsgaard said
“In addition, the winter season will have the normal impact on activity in the fourth quarter, which this year is unlikely to be offset by the usual year-end sales of software, products and multiclient licenses.”
The company has announced thousands of job cuts this year, and did not rule out laying off more staff in 2016.
“In light of conservative customer budgets for next year, we are therefore entering another period during which we will continually adjust resources in line with activity, as the recovery now appears to be delayed. We remain focused on managing our cost base, and are further accelerating our transformation programme to help offset the impact of lower service pricing.
“As we navigate the current commercial landscape, we still look to strike a balance between market share and operating margins, while continuing to seek opportunities to extend our portfolio through targeted M&A, such as our transaction with Cameron, where integration planning is already well advanced.”
