Schlumberger, Baker Hughes CEOs see offshore activity pickup

Jul. 20, 2018 5:42 PM ETSchlumberger Limited (SLB)SLB, BKRBy: Carl Surran, SA News Editor5 Comments
  • Schlumberger (NYSE:SLB) and Baker Hughes (NYSE:BHGE) both see pickups in the lagging offshore sector going forward, as customers are moving ahead with large projects and even preparing to increase exploration for future ones, their CEOs said today.
  • Upstream projects remain dominated by development rather than exploration, although exploration spending by producers appears to be "starting to turn the corner," SLB CEO Paal Kibsgaard said in his company's earnings conference call.
  • "We are starting to see some uptick in [Q2] in terms of exploration rig count, which was up 22% sequentially and up 7%" Y/Y, Kibsgaard said, adding that he expects exploratory drilling and well services exploration spending this year to rise ~12% above 2017 levels.
  • A further sign of increasing interest in offshore exploration is more discussions with customers in formation evaluation and more elaborate talks about reservoirs, Kibsgaard said.
  • BHGE CEO Lorenzo Simonelli said he expects more onshore and offshore production orders to ramp in 2019, with the latter especially improving after several sluggish years.
  • "As more large projects are sanctioned and offshore spend returns to more normalized levels, we expect these orders to start generating revenues in 2020," Simonelli said in his company's earnings call.

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