International Oil Drilling Boosts SLB’s Net Profit in Q1

SLB (NYSE: SLB), the world’s largest oilfield services provider, reported on Friday 14% higher net income for the first quarter compared to the same period last year, amid strong international drilling demand that more than offset a weaker North American market. 

SLB has been saying for several consecutive quarters that it expects strong international drilling business going forward, boosted by a rebound in offshore drilling and growing demand for oil and gas.

SLB saw its net income rise to $1.07 billion for the first quarter, up by 14% year-on-year and in line with analyst expectations.

Revenues of $8.71 billion increased by 13% compared to Q1 2023 and were slightly above the analyst consensus estimate of $8.7 billion.

Strong international revenue growth of 18% offset a softer drilling demand in North America, where SLB’s revenue fell by 6% year-over-year in the first quarter of 2024, chief executive Olivier Le Peuch said in a statement.

“During the quarter, we continued to benefit from our favorable exposure to the international markets, with remarkable year-on-year growth of 29% in the Middle East & Asia, in addition to growth of 18% in Europe & Africa,” Le Peuch added.

Following an “exciting start to the year”, SLB expects growth momentum to continue, the executive noted.

“The oil and gas industry continues to benefit from strong market fundamentals driven by a growing demand outlook. This is resulting in a significant baseload of activity, particularly in the international and offshore markets, closely aligned with the strengths of our business,” Le Peuch said.

SLB sees the current cycle persisting and as a result, it expects E&P companies to boost investments in production and reservoir recovery as they look to maximize the efficiency and longevity of their producing assets.

Just two weeks ago, SLB announced a definitive agreement to buy smaller competitor ChampionX Corporation in an all-stock deal valued at $7.75 billion, which SLB expects to position it to benefit additionally from the growing investment cycle, Le Peuch added.

By Tsvetana Paraskova for Oilprice.com

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