Schlumberger Limited. : Schlumberger CEO : No Signs of Slowing International Activity
07/20/2012| 10:59am US/Eastern
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--Schlumberger CEO not yet seeing signs of slowdown in international oil-related activity
--In U.S., Schlumberger expects declining hydraulic-fracturing margins to continue into next quarter
--Increased activity in U.S. Gulf of Mexico is offsetting falling margins in fracking services
(Updates with additional comments from conference call.)
HOUSTON--Schlumberger Ltd. (SLB) isn't seeing signs of a slowdown in international activity, despite increasing concerns related to a shaky global economy, Chief Executive Paal Kibsgaard told investors Friday.
"Absent a future setback to the world economy, [we maintain] our stated view that international activity will grow in excess of 10% this year," he said during a conference call.
In the U.S., however, the company expects the trend of falling hydraulic-fracturing margins to continue into the next quarter, as the market is still dealing with excess capacity, especially for pressure-pumping services.
"Rig moves from the gas basins to the liquid rich basins continued," Mr. Kibsgaard said. That phenomenon is raising costs for most oil-field services companies.
However, increased activity in the U.S. Gulf of Mexico is offsetting declining margins in fracking services, Mr. Kibsgaard said.
Mr. Kibsgaard cautioned that both in the U.S. and internationally unstable or falling oil prices could dampen activity going forward, though there have been no signs of that yet.
Mr. Kibsgaard highlighted increased demand for "high end" oil-field services in China and said Russia is on track to be one of the company's fastest-growing markets.
He said Argentina's nationalization of energy company YPF SA (YPF, YPFD.BA) creates some short-term uncertainty, but he said the company's outlook is positive in the medium and long term.
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