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Houston-based oilfield service giants Schlumberger, Halliburton and Baker Hughes are preparing for a further downturn in 2016, with thousands more redundancies planned although a recovery is slated for 2017. Despite seeing their profits plunge in 2015 on the back of oil prices that hit 11-year lows in December, record activity in the Middle East has seen the region’s share of the companies’ earnings grow (see table).
The knock-on effect of falling oil prices, which began in mid-2014, was more noticeable in the beginning of 2015, with international oil companies (IOCs) able to delay making immediate cuts to capex.
Italian firm Eni’s CEO Claudio Descalzi told the Chatham House MENA Energy conference in London on 25 January that upstream capex is "being reduced to dangerous levels," with a 20% global cut last year set to be followed by a further 15% cut this year.
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