Schlumberger saw net income slump into the red as revenue plummeted by 22% during 2016.
Annual figures from the energy service giant yesterday also showed pre-tax operating profits halved to £2.65billion.
Reporting net losses of £1.4billion on revenue of £22.5billion, US-based Schlumberger said it maintained a “constructive” view of oil markets as a tightening of the supply and demand balance continued in the final quarter.
Chairman and chief executive Paal Kibsgaard added: “This trend was further strengthened by the December Opec (producers’ cartel) and non-Opec agreements to cut production, which should, with a certain lag, accelerate inventory draws, support a further increase in oil prices and lead to increased E&P (exploration and production) investments.
“We expect the growth in investments to initially be led by land operators in North America.
“In the international markets, operators are more focused on full-cycle returns and E&P investments are generally governed by the operators’ free cash flow generation.
“Based on this, we expect the 2017 recovery in the international markets to start off more slowly, driven by the economic reality facing the E&P industry.
“This will likely lead to a third successive year of underinvestment, with a continued low rate of new project approvals and an accelerating production decline in the aging production base.”
Schlumberger, which has a big presence in the north-east, said fourth-quarter revenue growth of 1%, compared with the previous three months, was driven by strong activity in the Middle East and North America.
The increase would have been bigger but for continued weakness in Latin America and seasonal activity declines in Europe, the Commonwealth of Independent States and Africa.
Mr Kibsgaard said the company was “excited to restore focus on the pursuit of growth and improving returns” after nine consecutive quarters of “relentless” workforce reductions, cost-cutting, and restructuring.
He added: “We have streamlined our cost and support structure, continued to drive the underlying efficiency and quality of our business workflows, expanded our offering through maintaining investments in R&E (research and engineering”, and made a series of strategic acquisitions.
“The combination of these actions has enabled us to further strengthen our global market position during the downturn, which will enable us to maintain and extend our well-established margin and earnings leadership in both North America and in all parts of the international markets going forward.”
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