Schlumberger’s workforce cutting spree continues

  • Business & Finance

Schlumberger, the world’s largest oilfield services provider, will further reduce its workforce due to challenging market conditions for the oilfield services sector.

The company on December 1, 2015, said it would make further cuts in its headcount “in light of expected reduced activity for 2016 and to streamline its support structure.”

As a result, Schlumberger said it expected to record a pre-tax restructuring charge in the fourth quarter of 2015 that is estimated to be around $350 million.

The company, which has so far this year laid off around 20.000 people, did not specify the number of employees set to lose job.

Patrick Schorn, President, Operations & Integration of Schlumberger, on Tuesday presented at the Cowen and Company Ultimate Energy Conference in New York, where he described the current situation in the market as the “the most significant drop we have seen in the business since 1986.”

Talking about cost cutting initiatives, he said, among other things, that the company has made considerable progress through multiskilling where field crews can perform services from multiple product lines in addition to making greater use of remote operations centers.

Schorn said that in Mexico, the combination of multi-skilled crews and remote centers enabled well site supervisors to run directional drilling tools on location, allowing the directional drillers to move from the rig site to a remote command center where they can oversee multiple rigs simultaneously.

“Since the start of this initiative, more than 180 wells have been drilled in this way, and rig crews have been reduced by an average of 35%,” Schorn said.

He added that both international and national oil companies had been among the early adopters of the multiskilled approach.

“As we gain better understanding of the value that this approach brings, we are able to engage with customers to adapt contract terms to reflect the value achieved,” he added.

While he said Schlumberger is well positioned for recovery, overall, the company’s stance is that the “inevitable” recovery will not happen soon.

Schron said: “Many of the actions that we have taken are positioning us well for the inevitable recovery once the full effect of prolonged industry investment translates to declining production in the face of continuing hydrocarbon demand. The timing gap between higher oil prices and the subsequent increase in service company activity, however, will depend on the reversal of financial pressure on our customers.”

Offshore Energy Today Staff

Related news

List of related news articles