Schlumberger posts strong first quarter growth


Oilfield services company Schlumberger has reported a 38 per cent increase in its first quarter profits from US$944 million for Q1 2011 to $1.3 billion for the same period in 2012

The quarterly results benefitted from a strong growth in oilfield services in the Gulf of Mexico, North Africa and the Middle East.

Schlumberger CEO Paal Kibsgaard said in a company statement, "Pricing sentiments are starting to move upwards as the majority of the large international contracts have now been rebid and service capacity is tightening further."

Oilfield services segment revenue was $9.9 billion, a year-on-year increase of 22 per cent, which was boosted by strong double-digit revenue growth in all three sections of reservoir characterisation, drilling and production.

Schlumberger's sales fell to $10.61 billion from $10.97 billion a year ago, which the company said could be considered as a "normal seasonal drop", but its distribution revenue increased 4 per cent sequentially and 19 per cent year-on-year to hit $713 million, helping it sustain its international margins. The company's WesternGeco business contributed significantly to the increase.

Schlumberger's performance in international markets remained strong, held up by high oil prices in the quarter. Its drilling rigs outside the US and Canada during the quarter increased 1.2 per cent to 1,189 and with the company stating that drilling activity will remain robust, it is expected to climb by more than 10 per cent this year.

Looking ahead, the oilfield service provider said, "Oil demand in 2012 appears to have stabilised and supply continues to be limited by weak non-OPEC performance and narrow spare capacity margins. These effects should limit any oil-price decline."

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