Schlumberger eyes international recovery, forecasts double digit growth
(Adds details from conference call)
By John Benny and Liz Hampton
July 20 (Reuters) - Schlumberger Inc said on Friday a recovery in international oil markets was underway, forecasting double digit growth in its biggest segment next year as higher oil prices support more expensive drilling projects.
The Houston-based company, a bellwether for the oilfield services industry, has benefited from increased production in North American shale fields, but has struggled to see improvements in international markets since oil prices crashed in mid-2014.
Brent crude futures, the global benchmark, topped $80 a barrel in the second quarter, its strongest level in roughly three and a half years amid an effort by major oil producers to cut production and stabilize prices and supply disruptions.
Revenue from Schlumberger's international business dipped 1.4 percent year-over-year to $5.07 billion, but rose 4 percent sequentially.
"The broader-based recovery has finally started," Chief Executive Officer Paal Kibsgaard said on the company's second quarter conference call.
He expects the company's international business to be fully mobilized by the fourth quarter of this year and forecast double digit growth for that segment next year.
"This is what people have been looking for - the inflection in the international business. It is starting to materialize now," said Societe Generale analyst Edward Muztafago, referencing the firm's sequential growth.
Shares of Schlumberger, the world's largest oilfield services company, were up 1.6 percent at $67.96 in early trading on Friday.
Revenue from Schlumberger's North America operations jumped about 43 percent to $3.14 billion.
Schlumberger warned that pipeline constraints in the Permian basin could slow growth in the coming months, but said it plans to continue deploying hydraulic fracturing fleets.
The services company has not yet seen an impact on Permian growth or pricing due to pipeline constraints, Kibsgaard said.
Schlumberger, which is seeking to vertically integrate its operations, said it now owns several sand mines and has capacity to cover 100 percent of its current and projected U.S. hydraulic fracturing work.
Total revenue rose 11.3 percent to $8.30 billion, but missed analysts' estimate of $8.36 billion, according to Thomson Reuters I/B/E/S.
The company posted net income attributable of $430 million, or 31 cents per share, in the second quarter ended June 30, compared with a loss of $74 million, or 5 cents per share, a year earlier. (Reporting by John Benny in Bengaluru and Liz Hampton in Midland, Texas Editing by Sriraj Kalluvila and Frances Kerry)
