Schlumberger oil beats sanctions, surprises with record profit

17th October 2014, Comments 0 comments

The world leader in servicing oil industry installations, Schlumberger, surprised the markets with a record performance in the third quarter despite sanctions against oil giant Russia.

And despite a big fall in the price of oil recently, the French-US group said it was confident about the strength of its business and markets although it did not risk making a forecast for performance for the rest of the year.

In the three months to September, the company made a net profit of $1.9 billion (1.48 billion euros), an increase of 13.6 percent from the equivalent figure last year.

The underlying figure for earnings per share, the figure closely watched on Wall Street, was 3.0 cents higher than the market expected at $1.49.

Operating profit rose by 12.0 percent to $2.8 billion, from sales which rose by 13.6 percent to $12.6 billion.

Despite the sanctions, the group said that activity had increased in all geographical areas where it does business and across all sectors of the industry.

Schlumberger chief executive Paal Kibsgaard said: "Strong activity in North America and robust growth in international areas, led by Latin America and supported by Europe/Africa/CIS (group of former Soviet-dominated countries) in spite of international sanctions in Russia, drove third-quarter results to a new record high."

He said: "At the same time, Middle East and Asia proved highly resilient in the face of significant headwinds in Northern Iraq."

The group said it remained confident "that the slow but steady recovery in the world economy is intact".

Referring to the latest cut in oil demand forecasts by the International Energy Agency, the company said that although the oil demand outlook had been revised slightly downwards, it saw little reason to change its view that the oil supply-demand situation "is relatively well balanced".

This view reflected difficulties in maintaining production for producing countries outside the Organization of Petroleum Exporting Countries, and outside the booming shale-oil sector in North America.

Schlumberger said its view also reflected "the lack of growth in OPEC sustainable production capacity ... and the continuing geopolitical risks in some key producing regions".

© 2014 AFP

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