The world´s largest oilfield services company, Schlumberger, recorded a fall down in revenue of 34% (excluding the Cameron Group ), and for the first time in the last 14 years suffered a loss of $1,69 billion comparing to the income of $2,07 billion reached in 2015 and $5,64 billion reached in 2014.
According to the Company´s Annual Report in 2016, Schlumberger’s $27,8 billion revenue in 2016 represented a decrease of 22% from 2015 ($35,47 billion), despite three quarters of activity from the acquired Cameroon Group [1], which contributed $4,2 billion in revenue. This revenue drop resulted from the deepest and largest industry crisis in more than 30 years which caused continued weakness in exploration and production spending. For the first time in the last 30 years Brent crude prices experienced their sharpest fall to $26 per barrel.
In the natural gas markets, US production declined during 2016 as a result of the drop in gas drilling activity and low gas prices during most of 2016.
2016 was notable for the start-up of the Sabine Pass liquefied natural gas (LNG) plant in Texas, which exported its first shipment in the early part of the year. This should make the US the third largest exporter of LNG by the end of 2020.
All segment performances in the Group continued to decrease in 2016 compared to 2015. The Reservoir Characterization performance fell by 30,75%, the Drilling segment turnover recorded a drop of 36,87% compared to the previous year and the Production turnover declined by 29,25% compared to 2015.
Due to the completion of the acquisition deal of Cameron International in April 2016, Schlumberger was able to increase the total revenue of the company by $4.2 billion, or by 15,14%, but nevertheless the final total revenue result in 2016 reduced by 22% in comparison to 2015. This was mainly affected by the significant decrease in activity, particularly in North America, where the average land rig count dropped 46% compared to the previous year. Supply overcapacity resulted in pricing pressure for many oilfield services.
A minimal presence of the company in North America recorded a drop of 48%, excluding the impact of Cameron and market segments around the world. Revenue in Europe, CIS, and Africa decreased by 21% due to a lower demand for exploration and development-related products. Revenue declined in Latin America by 30% due to customer budget constraints across the region, particularly in Venezuela. The presence in the Middle East & Asia decreased by 6,2%, primarily due to reduced activity in Asia-Pacific countries.
[1] On April 1, 2016, Schlumberger completed its acquisition of Cameron International. The transaction enabled the creation of technology-driven growth by integrating Schlumberger reservoir and well technology with Cameron wellhead and surface equipment, flow control, and processing technology.
