Pre-tax profits at oil services firm Schlumberger’s have almost halved in the first quarter of 2017 compared with the same period last year.
The firm blamed a greater than expected seasonal decline in activity and sales in China, Russia and the North Sea for reduced international revenue.
But Paal Kibsgaard, Schlumberger chairman and CEO, said there was a “wealth of opportunity” beyond current industry hurdles.
He said: “As we continue to carefully navigate the current industry landscape, we remain confident and optimistic about the future of Schlumberger, knowing very well that beyond the current market challenges lies a wealth of opportunity for the industry players who are ready and able to think new and to act new.”
Pre-tax profits totalled $334million in the first three months of 2017, compared to $622million over the same period in 2016.
The profits drop came despite a 6% increase in year-on-year revenue, driven by strong performance in the US, with fracking and directional drilling services contributing higher revenue.
Kibsgaard identified four areas as critical for the industry to restore its strength.
He said: “They are—the need for higher E&P spending to meet growing hydrocarbon demand over the coming years; the need to protect and encourage investments in R&E throughout the entire oil and gas value chain; the need for new business models that foster closer technical collaboration and commercial alignment between operators and suppliers; and the need for broader and more integrated technology platforms that combine hardware, software, data, and expertise.”
Net debt increased by 71% from $6.65billion to $11.39billion.