Schlumberger 2Q profit up 14 pct as new boss prepares to take the helm
- Business & Finance
Oilfield services provider Schlumberger recorded a 14 percent increase in its second quarter 2019 net profit while expecting oil market sentiments to remain balanced. Schlumberger has also revealed that its CEO will retire after eight years in the role and the company has already lined up a replacement.
Schlumberger on Friday posted revenues of $8.27 billion for the second quarter of the year, compared to the last year’s result of $8.3 billion.
The oilfield services player recorded a net income on a GAAP basis of $492 million, which is an increase of 14% compared to 2Q 2018 and net income of $430 million.
The company’s net income, excluding charges and credits, was $492 million, a 17% decrease compared to $594 million in 2Q 2018.
Commenting on market situation, Schlumberger’s current CEO, Paal Kibsgaard, said: “From a macro perspective, we expect oil market sentiments to remain balanced. The oil demand forecast for 2019 has been reduced slightly on trade war fears and current global geopolitical tensions, but we do not anticipate a change in the structural demand outlook for the mid-term.
“On the supply side, we continue to see US shale oil as the only near- to medium-term source of global production growth, albeit at a slowing growth rate, as E&P operators continue to transition from an emphasis on growth to a focus on cash and returns, with consequent restraining effects on investment levels. These effects, combined with the decision by OPEC and Russia to extend production cuts through the first quarter of 2020, are likely to keep oil prices range bound around present levels. Although the markets are well supplied from production added by projects that were sanctioned before 2015, this added supply will begin to fall in 2020 and create risk for the future as the decline rates in many mature production basins become an increasingly significant challenge.
“In addition, while the number of new projects we expect to receive final investment decision (FID) approval in 2019 is likely to increase again for the fourth consecutive year, their size and number account for supply additions far below the required global annual production replacement rates. We therefore maintain our view that international E&P investment will grow 7% to 8% in 2019, further supported by the increase in international rig count. In contrast, spending in North America land is tracking our expectations of a 10% decline this year.”
New boss for Schlumberger
Schlumberger also announced it has appointed Olivier Le Peuch as its Chief Executive Officer and member of the Schlumberger Board, effective August 1, 2019.
Le Peuch succeeds Paal Kibsgaard, who will retire as Chief Executive Officer effective that same date. Also effective August 1, Kibsgaard will step down as Chairman of the Board and retire as a member of the Board of Directors. Kibsgaard will retire after more than 22 years of service to the company, including eight years as CEO and four years as Chairman.
Effective the same date, Mark G. Papa, a current non-independent director, will become non-executive Chairman of the Board. Peter Currie will continue to serve as the Board’s Lead Independent Director.
Offshore Energy Today Staff
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