SCHLUMBERGER Q1 2020 – UNPRECEDENTED LEVELS OF RESPONSE AND DEPTHS OF RESILIENCE NEEDED
Schlumberger revenue of $ 7,455 for Q1 2020 decreased 9% sequentially and 5% year-on-year. International revenue of $5.1 billion decreased 10% sequentially, but increased 2% year-on-year.
Pretax segment operating income of $776 decrease 23% sequentially and 15% year-on-year.
Schlumberger CEO Olivier Le Peuch commented, “First-quarter revenue of $7.5 billion declined 9% sequentially and 5% year-on-year as the unprecedented global health and economic crisis sparked by the COVID-19 pandemic increasingly impacted industry activity during the quarter. The effect of this was amplified late in the quarter by a new battle for market share between the world’s largest oil producers. This double black swan event created simultaneous shocks in oil supply and demand resulting in the most challenging environment for the industry in many decades.
“Customer spending and drilling activity in North America declined as oil prices slipped early in the quarter before falling abruptly in March. This resulted in a 7% sequential decrease in North America revenue to $2.3 billion as we accelerated our land strategy to high-grade our portfolio and resized our operational footprint. International activity, expected to be seasonally lower sequentially, suffered from COVID-19-related activity disruptions and initial customer spending cuts in response to falling oil prices. International revenue of $5.1 billion declined 10% sequentially.
“Looking beyond the sequential results for the quarter, our international business showed some resilience with year-on-year growth of 2% against the backdrop of an increasingly difficult operating environment. Growth was driven by six GeoMarkets—Russia & Central Asia, Saudi Arabia & Bahrain, Far East Asia & Australia, Northern Middle East, Latin America North, and Norway & Denmark. Despite the challenging environment, cash flow performance during the quarter was strong as we generated $784 million of cash flow from operations. This was more than double what we generated in the same quarter last year.”
Olivier Le Peuch concluded, “The enormity of the task ahead will require levels of response and depths of resilience that have yet to be fully realized. Our immediate actions have been focused on those things we can control in protecting our business in an uncertain industry and global environment. We will continue to take the steps necessary to protect the safety and health of our people and pursue our desire to be the performance partner of choice for our customers. The future of our industry poses difficult challenges—for people and for the environment—but in challenge lies opportunity. Backed by the resilience and performance of our people, technology leadership, and financial strength, we believe we are well-placed to succeed as the industry recovers from this unprecedented downturn.”
(Source: Schlumberger – Image: Schlumberger horizontal drilling near Gubkinsky in Western Siberia/ReneP/energy global news)