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Top Oilfield Service Providers See Multi-Year Recovery Ahead

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The three largest oilfield services providers in the world expect the vaccine-driven recovery in global oil demand to continue through the coming quarters and lead to the next upcycle in demand for oil drilling and completions.

Halliburton Company (NYSE: HAL), which generates the largest share of its revenues from North America, was the first to report last week its Q2 financials and give an estimate about the industry going forward.

Improved North American and international markets for drilling, completion, and production helped Halliburton book a higher net profit for the second quarter than analysts had estimated. Halliburton also reported rising revenues both in North America and internationally and higher operating income quarter over quarter as the markets continued to improve, said the company.

“The positive activity momentum we see in North America and international markets today, combined with our expectations for future customer demand, gives us conviction for an unfolding multi-year upcycle,” said Jeff Miller, Halliburton’s chairman, president, and CEO.

Baker Hughes, whose Q2 loss was smaller than the losses booked for Q2 2020 and Q1 2021, reported stronger revenues and orders and continues to see improving demand.

“As we look ahead to the second half of 2021, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas. Although we recognize the risks presented by the variant strains of the COVID-19 virus, we expect spending and activity levels to gain momentum through the year as the macro environment improves, likely setting up the industry for stronger growth in 2022,” Baker Hughes chairman and CEO Lorenzo Simonelli said.

Schlumberger turned to a net profit of $431 million for Q2, compared to a loss of $3.4 billion for the same period of 2020.

“In North America, revenue grew 11% sequentially, representing the highest sequential quarterly growth rate for this area since the third quarter of 2017,” Schlumberger CEO Olivier Le Peuch said, commenting on the Q2 2021 performance.

“With oil price at elevated levels, the supply response to this demand recovery is developing broadly as anticipated. Indeed, this combination has resulted in a call on short-cycle production as well as an uptick in long-cycle project, reflected in new FIDs and encouraging recovery in both offshore developments and near-field exploration activity through the second quarter,” Le Peuch said on the earnings call on Friday.

By Tsvetana Paraskova for Oilprice.com

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