Services Firms: Get Mideast Tonic As Revenue Whacked

Oilfield service firms are still feeling the pinch of the 60% drop in oil prices since mid-2014. The three largest, Schlumberger, Halliburton and Baker Hughes all saw revenue fall again in Q1, to multi-year lows. Mideast takings are also down, but by less, so the region’s relative importance to all three firms continues to rise.

Revenues for the three largest quoted services firms took another pounding in the first quarter of 2016. Schlumberger, Halliburton and Baker Hughes’ revenues were just $6.52bn, $4.20bn and $2.67bn respectively; a mere 52%, 48% and 40% respectively of peak Q4 2014 figures.

But, although their Middle East segments have also seen revenues drop, falls have been by substantially less than elsewhere. Schlumberger now relies on its Middle East and Asia segment for a record 31% of company revenue; Halliburton and Baker Hughes’ regional share rose above 25% in Q1 (see table and chart).

Upstream firms have all slashed their budgets in anticipation of ‘lower for longer’ oil prices; though prices have rebounded somewhat with Brent trading around $45/B for much of April, as yet there is no sign of an uptick in spending. (CONTINUED - 1249 WORDS)

DATA INSIDE THIS ARTICLE

table Services Firms 1Q16 Revenue ($Bn)