Schlumberger slashes 21,000 jobs amid pandemic oil rout

Schlumberger paid out $1 billion in severance benefits. (Shutterstock)
Short Url
Updated 25 July 2020

Schlumberger slashes 21,000 jobs amid pandemic oil rout

  • Global oilfield services giant cuts a quarter of its workforce after bruising second quarter sends revenues plunging

BENGALURE: Oilfield services giant Schlumberger NV on Friday reported its second straight quarterly loss after recording a $3.7 billion charge related to thousands of job cuts and a major pipeline outage in Ecuador.

The company cut about 21,000 jobs amid a steep crash in oil prices that has prompted a pullback in drilling activities. It reported $1.02 billion in severance costs for the second quarter for dismissed workers and recorded a $666 million charge related to asset impairments in Latin America, after a landslide ruptured a pipeline.
The company rounded off second-quarter earnings reports from major US oilfield services providers this week that laid bare the damage wreaked by the coronavirus crisis, particularly in North America.
Although crude prices have recovered from the historic declines in March and April, they are still down around 33 percent for the year, and fears of a COVID-19 resurgence are challenging the company’s outlook about a near-term normalization of oil prices, CEO Olivier Le Peuch said in a statement.

BACKGROUND

Weak oil prices made worse by the reduced demand caused by coronavirus-related lockdowns has had a devastating impact on the major oilfield services companies, especially in the North American shale sector which requires higher oil prices to remain profitable.

Schlumberger, which is restructuring its business to adjust to the price crash, said North America revenue fell to $1.18 billion in the second quarter, less than half of what it was a year earlier, with only slightly better conditions expected in the current quarter.
“The conditions are set in the third quarter for a modest frac completion activity increase in North America, though from a very low base,” Le Peuch said, referring to hydraulic fracturing activities used to complete oil wells.
The world’s largest oilfield services provider reported a net loss of $3.43 billion, or $2.47 per share, for the second quarter, compared with a profit of $492 million, or 35 cents per share, a year earlier.
Excluding charges and credits, the company earned 5 cents per share.


Oil workers evacuated as storm heads for US rigs

Updated 20 September 2020

Oil workers evacuated as storm heads for US rigs

  • Production faces renewed threat as Beta bears down on key Gulf of Mexico platforms

NEW YORK: Royal Dutch Shell halted some oil production and began evacuating workers from a US Gulf of Mexico platform, the company said, as a new tropical storm flared.

Beta, the 23rd-named storm of the Atlantic hurricane season, formed in the Bay of Campeche and was forecast to strengthen steadily and become a hurricane by Sunday off the Texas coast, the National Hurricane Center (NHC) said.

Shell said it was removing non-essential employees from its Perdido platform in the western Gulf of Mexico and securing nearby drilling rigs. Occidental Petroleum Corp, which operates in the same area, also began implementing storm procedures, it said.

Chevron Corp. has not newly evacuated staff and there was no impact from storm Beta on production at its operated facilities, the company said. Chevron owns a stake in Shell’s Perdido.

The NHC issued a hurricane watch for most of the Texas coast and warned of heavy rains along the northwest Gulf coast through Wednesday.

Beta could become the third Gulf of Mexico hurricane in less than a month, behind Laura and Sally. Hurricane Sally swept across the central and eastern Gulf, slamming into Alabama on Wednesday with winds of up to 105 mph (170 kph). Laura entered on Aug. 25 and hit southwest Louisiana with 150 mph winds.

There were 37 platforms on Friday that remained unstaffed, with oil output cut by 396,554 barrels per day and natural gas by 435 million cubic feet per day in the wake of Hurricane Sally.

The US Gulf of Mexico offshore oil production accounts for 17 percent of US crude oil production and 5 percent of US natural gas production.