Schlumberger is about to expand in West Texas as it deploys its drilling “rig of the future” technology now that the shale oil fields are slowly returning to life.
The chief executive of the world’s largest energy services company said Friday that two of the new rigs are starting operations in the United States this year to unleash greater depths of directional drilling and access more oil reservoirs from single locations.
Schlumberger Chief Executive Paal Kibsgaard refers to these longer horizontal laterals drilled as “super laterals.” The growth target is in Texas’ Permian Basin.
“We now have a clear path to profitability on North American land with the technology uptick we’re seeing,” Kibsgaard said. “This is why we’re prepared to put more capacity into place for what’s happening in West Texas.”
During the oil bust, Schlumberger grew its market share internationally while the second-largest services company, Halliburton, increased its share in the United States.. Now that Kibsgaard believes the industry has passed the bottom of the oil bust, Schlumberger aims to grow in North America with its new technology.
Two pilot projects using the “rig of the future” pilot will roll out this year, while Kibsgaard said fully completed versions will come out in 2017.
Kibsgaard said he believes the oil bust has bottomed out everywhere except Asia and in certain segments of deepwater activity. He’s projecting solid growth next year in North American land, the Middle East and in Russia. In the third quarter, Schlumberger’s onshore North American revenue grew by 14 percent from the second quarter.
Schlumberge, which has its has its principal offices in Paris, Houston, London and The Hague, maintained its global workforce at about 100,000 employees the past three months after axing about 50,000 jobs in 18 months during the worst oil bust in 30 years. In April, Schlumberger in April finalized its purchase the Houston company Cameron International, which added close to 20,000 jobs worldwide, including about 4,000 in the Houston area. Some of those positions, however were susceptible to job cuts in the second quarter. Schlumberger has not disclosed in which divisions and locations the layoffs took place.
Schlumberger’s reported a $176 million net gain in the third quarter overall, which compares to a much larger $989 million profit during the same time last year. Schlumberger posted a $2.16 billion loss during the second quarter of this year.
Schlumberger’s revenues of $7.02 billion stayed largely in line with last quarter’s $7.16 billion, but still down from last year’s $8.47 billion during the same time period.