Oil services giant Schlumberger has laid off 2000 employees as the company reports one of its steepest revenue declines since the downturn began, citing global activity decline and disruption that has reached unprecedented levels.
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Image from Schlumberger. |
“There has been a reduction of 2000 staff worldwide in Q1,” Susan Ganz, Schlumberger media relations manager confirmed to OE.“The Schlumberger employee workforce in Q1 2016 stands at 93,000 worldwide, compared with our peak workforce of 129,000 in Nov 2014. As a result of the current E&P market environment, we have reduced our workforce by a total 36,000 employees since the peak.”
Revenue for the company fell from US$7.7 billion in Q4 2015 to $6.5 billion, representing a 16% fall. However, when looking at year-on-year, the decline is even steeper. Schlumberger’s recorded revenue came in at $10.2 billion in March 2015, marking a 36% decrease.
“During the first quarter of 2016, the decline in global activity and the rate of activity disruption reached unprecedented levels as the industry displayed clear signs of operating in a full-scale cash crisis,” Schlumberger Chairman and CEO Paal Kibsgaard said in the company’s Q1 report. “Budgeted E&P spend fell again and substantially affected our operating results. This environment is expected to continue deteriorating over the coming quarter given the magnitude and erratic nature of the disruptions in activity.”
“Sequentially, the first-quarter revenue decrease of 16% was one of the steepest quarterly declines we have posted since this downturn started. This was driven by a continuing drop in activity and persistent pricing pressure throughout our global operations as well as from project delays, job cancellations and activity disruptions,” Kibsgaard said.
Net income in Q1 came in at $501 billion, a 39% decrease from $819 billion in Q4, and a 63% decline year-on-year at $1.4 billion.
Taking its biggest hit in recent history, Schlumberger still remains optimistic.
“In the midst of a deepening downturn that has already entered its seventh quarter, we are still optimistic and confident about the medium term outlook for Schlumberger,” Kibsgaard said. “Our unmatched ability to generate cash in the oilfield services industry allows us to capitalize on a variety of significant business opportunities while continuing to return cash to our shareholders through dividends and stock buy-backs. This, combined with the strategic moves we have made that include the Cameron merger, leaves us very well positioned once markets start to recover.”
During the period, Schlumberger’s WesternGeco received additional pre-commitments from several major oil companies for the multiyear Campeche deepwater wide-azimuth multiclient project, the first of its kind in the Mexican waters of the Gulf of Mexico, the company confirmed. The Campeche project deliverables will provide information to oil companies for licensing rounds in 2016 and beyond as well as for future exploration and appraisal activities in the area.
WesternGeco also won a deepwater 3D multiclient survey covering more than 9000sq km in the Flemish Pass, offshore Newfoundland. Seismic acquisition is set to begin in Q2 2016 using IsoMetrix marine isometric seismic technology. The purpose-built WesternGeco Amazon Conqueror will tow 14 streamers during the summer and deliver its first images later in the year. In 2017, measurement of an additional 9000sq km is planned to provide contiguous high-resolution, long-offset, broadband seismic data for the location.
In the North Sea, Apache awarded WesternGeco a contract for a 4D reservoir monitoring survey over 208sq km in the Forties field and its surrounding area with an optional extension. The survey will use Q-Marine point-receiver marine seismic technology. WesternGeco has acquired seismic data since 2010 on the Forties field, including two 4D surveys.
During the period, Schlumberger also completed its $14.8 billion merger with rival Cameron International, less than a year after the deal was proposed. The deal brought Schlumberger's workforce to 95,000 in 85 countries. The company did not disclose which sectors or countries were affected by the 2000 job cuts, which brings Schlumberger's new headcount of 93,000.
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