Stimulus Check – Schlumberger’s profit rises as oil industry recovers
(Reuters) -Schlumberger NV reported a rise in second-quarter profit on Friday, citing a rebound in crude prices that revived demand for the company’s oilfield services and related equipment.
Global crude prices rose 18% in the quarter that ended in June and have climbed 42% since the start of 2021 on the back of a vaccine-fueled demand recovery and output cuts by producer group OPEC+.
Still, oilfield activity levels remain far below pre-pandemic levels and oil demand could face a threat as a resurgence of infections from coronavirus variants prompts fresh restrictions in some parts of the world.
Worldwide, there are 1325 active rigs, up 63 from the start of the year, but far below the 2073 that were working at the start of 2020, according to data from Baker Hughes.
“While the rise of the COVID-19 Delta variant and resurgence of related disruptions could impact the pace of economic reopening, industry projections of oil demand reflect the anticipation of a wider vaccine-enabled recovery, improving road mobility, and the impact of various economic stimulus programs,” Schlumberger Chief Executive Olivier Le Peuch said.
He expects growth in North America to moderate, but added it could “surprise to the upside” due to spending by private operators.
Schlumberger reported net income of $431 million, or 30 cents per share, for the three months to June 30, compared with $299 million, or 21 cents per share, in the first quarter. Wall Street analysts had anticipated earnings of 26 cents per share, according to Refinitiv IBES.
The company’s shares were up 1.86% in pre-market trading at $28.5.
Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila and Pravin Char