The Strategist

Oil and Gas Industry Will Have to Lead the Life of Hardship For a Long Time


10/16/2015 - 17:08



Paal Kibsgaard, the head of the world's largest oilfield services company Schlumberger, reporting on the results of the third quarter, said there won’t be any recovery of the global oil and gas industry in the near future. According to him, "the situation on the market is becoming more and more difficult, and the activity on it is expected to decrease even more."



Creative Commons
Creative Commons
On Thursday, the world's largest oilfield services company Schlumberger presented the results of the third quarter, which proved to be disappointing. The company's profit for the period fell by 49% compared to last year and amounted to $ 989 million. The profit margin fell to 23.7%. The largest drop observed in the North American division of the company, where revenues fell by 47% to $ 2.27 billion, and profit margins - more than 10%. The company's shares, since the beginning of the fall in world oil prices in June 2014, fell by 29%.

Drawing the situation with Schlumberger as an example, CEO Paal Kibsgaard made a number of predictions for the global oil and gas industry as a whole. Just in July of this year, Mr. Kibsgaard believed that the restoration of the industry will begin the end of 2015. Now, he has an opinion that the future of the industry is quite gloomy. The situation on the market, he said, "the situation on the market is becoming more and more difficult, and the activity on it is expected to decrease even more."
 
Even if the demand approaches the level of offers, and prices in the coming months begins to grow, the oil and gas business will still be in recession, said Mr. Kibsgaard. "The lack of affordable cash investment limits many of our customers, so that they make conservative forecasts about the cost of exploration and production, independent of any incremental positive changes in oil prices," - said the head of Schlumberger. Concerns over a slowdown in China's economy, as well as a possible increase in the volume of oil supplies from Iran, are adding tensions to market. Given that oil prices from June 2014 fell more than doubled, Mr. Kibsgaard called this recession the most serious in decades.

source: businesswire.com




More
< >

Thursday, September 12th 2019 - 03:33 US oil inventories down 6.9 mln barrels per week

Wednesday, September 11th 2019 - 03:18 Analysts: new ECB measures may not live up to expectations