Spending by the global oil industry outside the US is poised to rebound later this year – the latest sign of growing confidence in the outlook for crude prices.
Schlumberger, the largest of the US oil service companies, posted better-than-expected earnings last month and forecast an increase in overseas spending by customers in the next quarter.
Elsewhere, Halliburton Co said markets outside North America may see double-digit growth in the second half of 2021, while Baker Hughes Co predicted a modest recovery in Latin America, the North Sea and the Middle East.
Last year, the three largest oil service companies (who help explorers map underground reservoirs and drill their wells) fired tens of thousands of workers and took multibillion-dollar writedowns. This is because they’re lessening their exposure to the shrinking US shale patch and turning their attention overseas, where they see a quicker recovery.
“We believe this sets the stage for oil demand to recover to 2019 levels no later than 2023, or earlier,” said Schlumberger chief executive officer Olivier Le Peuch. “Absent a setback in these macro assumptions, this will translate to meaningful activity increases both in North America and internationally.”
“Overseas drilling activity held up better than in North America in 2020, yet it’s taking longer to recover from COVID-19-related impacts,” Scott Levine and Justin Rothhaupt, analysts at Bloomberg Intelligence, said in a report. “International upstream spending could decrease almost 20 percent this year, a bit weaker than anticipated at around the start of the pandemic.”
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