International drilling boosts Schlumberger profit

Schlumberger Ltd.’s net income jumped 20 percent in the third quarter on growing drilling and exploration activities in international markets, especially the Middle East and Asia, the company said Friday.

Schlumberger, the world’s largest oil field services company, banked a profit of $1.7 billion during the July to September period. International producers have continued to spend high levels of capital, a key earnings driver for oil field services companies, on offshore projects in the Middle East and Asia and at higher rates than they have invested in North America.

The Houston company collected $11.6 billion in revenue during the third quarter, up 11 percent from the same period in 2012. Within the company’s geographic markets, the Middle East outpaced operations in other regions with 25 percent revenue growth over the same period last year to $2.8 billion.

Still, new technology sales drove revenue in the North American market to a new high in the third quarter, with a 9 percent increase over the same period last year, representing “a very strong quarter,” Schlumberger CEO Paal Kibsgaard said in a call with investors Friday morning.

Though some industry observers have said they expect North American exploration and production spending to increase as much as 10 percent next year, Kibsgaard said it’s too early to comment on growth numbers in any part of the world, though he’s optimistic North America will see higher growth than 2013.

Within the Middle East, several areas including Saudi Arabia, Iraq and the United Arab Emirates look like strong growth drivers in 2014, as exploration and production spending expands in those regions, Kibsgaard said. China, Australia, Russia and Sub-Saharan Africa are also likely to continue growing at a reasonable rate, he said.

“We had great results in all regions,” he said.

Kibsgaard said he was bullish on international offshore spending in 2014, as well.

New efficiencies within the company, including in technology in the North American land markets, have enabled it to reduce capital expenditures while it continues to grow, and Schlumberger spending would likely be flat to slightly lower in 2014, he said.