Schlumberger sees North American oil activity growing faster than expected

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Schlumberger sees North American oil activity growing faster than expected
Credit: © Reuters

By Liz Hampton

(Reuters) -Top oilfield services company Schlumberger (NYSE: SLB ) on Wednesday said North American oil and gas activity was growing at a faster pace than expected, as customers have largely shrugged off concerns about a looming recession.

Oil and gas producer customers were more concerned with securing equipment and operational performance than a sudden drop in oil prices or potential recession, Schlumberger Chief Executive Olivier Le Peuch said at a conference on Wednesday.

Le Peuch said international oil activity also has the potential to grow at a faster rate than North American activity going forward.

Shares of Schlumberger were down about 1.6% midday to $36.73 each, as oil futures sank about 4%. Schlumberger's stock is up about 23% year-to-date.

Oil and gas prices have jumped sharply this year as Western sanctions following Russia's invasion of Ukraine have disrupted energy supplies and flows. Brent crude was trading around $90 a barrel on Wednesday morning, well off levels seen in recent months, but about 25% higher than a year ago.

"There is huge momentum," Le Peuch said at the Barclays (LON: BARC ) CEO Energy-Power Conference in New York, adding that current investment rates and consistency are "something I've not seen for quite some time."

© Reuters. FILE PHOTO: The exterior of the Schlumberger Corporation headquarters building is pictured in the Galleria area of Houston January 16, 2015. REUTERS/Richard Carson

As oil prices have climbed and activity has picked up, Schlumberger said it is seeing its best margins in almost a decade.

"I think investors should expect that the margin expansion is here to continue," he said.

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