This Friday, global oilfield services provider, Schlumberger, announced its Q4 and full-year 2020 results. According to the company’s CEO, Olivier Le Peuch, Schlumberger concluded 2020, posting powerful Q4 results (with a 5% increase in quarterly revenue), leveraging the industry recovery.
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Schlumberger: with positive results in Q4 2020
Global oilfield services provider, Schlumberger, announced Friday it had released its Q4 and full-year 2020 results. Olivier Le Peuch, the company’s CEO, commented the provider concluded the year with robust results, as they “leveraged the industry recovery, which has now commenced.”
“Fourth-quarter revenue grew 5% sequentially, driven by strong activity and solid execution both in North America and in the international markets,” said the CEO. “Despite seasonality, revenue grew sequentially in all four Divisions for the first time since the third quarter of 2019. I stand very proudly behind the performance of the entire Schlumberger team during the quarter, closing an exceptional year of operational resilience and performance for our customers.”
According to Le Peuch, international revenue growth visibly outpaced rig count, mainly led by Latin America and a global rebound in most offshore deepwater markets.
China, India, Oman, Saudi Arabia kept the Middle East & Asia market growth resilient. In Europe/CIS/Africa, activity increased significantly in Africa’s offshore markets. In North America, offshore activity in the US Gulf of Mexico grew. Increased horizontal drilling and pressure pumping activity contributed to higher revenue on land.
“Digital & Integration revenue increased 13% sequentially driven by Asset Performance Solutions (APS) projects, increased multiclient seismic license sales, and higher digital solutions and software sales internationally,” the CEO declared.
Reservoir Performance and Well Construction revenue increased 3% and 2%, respectively, due to higher activity in North America, Latin America, and the Middle East & Asia.
“Fourth-quarter cash flow from operations was $878 million, and free cash flow was $554 million despite severance payments of $144 million. We are confident in our ability to further improve cash flow generation in 2021, which will allow for debt reduction.”
From a macro-outlook, a rise in global prices, the ongoing COVID-19 vaccine rollout, and several multinational economic stimulus actions are driving optimism for an oil demand recovery throughout 2021, Schlumberger stated.
Plans for the company’s operations in North America and internationally
“We believe this sets the stage for oil demand to recover to 2019 levels no later than 2023, or earlier as per recent industry analysts’ reports, reinforcing a multiyear cycle recovery as the global economy strengthens. Absent a setback in these macro assumptions. This will translate to meaningful activity increases both in North America and internationally,” the company shared.
Regarding its plans, the oilfield services provider shared that for North America, it will continue its spending plans in the first half of 2021 towards maintenance levels. Internationally, higher spending is expected from the second quarter of 2021 onwards.
“The quality of our results in the fourth quarter of 2020 validates the progress of our performance strategy and the reinvention of Schlumberger in this new chapter for the industry. Building from the swift execution and scale of our cost-out program, we exited the year with quarterly margins reset to 2019 levels as the upcycle begins,” the CEO noted.
A promising future
From Schlumberger’s restructured business portfolio perspective; the company sees a clear path to achieve double-digit margins in North America and visible international margin improvement in 2021. These expectations come from the depth, diversity, and execution capability of its international business; “uniquely positioned to benefit as international spending accelerates in the near- and midterm,” Schlumberger stressed in a press release.
“By leveraging our new Basin and Division structure, we are fully set to capitalize on the growth drivers of the future of our industry; particularly as we accelerate our digital growth ambition and leadership in the production and recovery market. Finally, to meet our long-term ambition to bring lower carbon and carbon-neutral energy sources and technology to market, we are visibly expanding our New Energy portfolio; to contribute to the transformation of a more resilient, sustainable, and investable energy services industry,” Le Peuch concluded.