SLB surpasses earnings expectations driven by strong demand for offshore and international drilling

Schlumberger Limited (SLB) has exceeded the predictions set forth by analysts about the first quarter earning of 2023. This profit is attributed to the notable increase in offshore and international drilling activity, due to which the demand of their oilfield equipment and services drifted northward.

While a decline has been noticed in the drilling activities in North American regions, there was a noticeable increase in the drilling activity in the U.S. Gulf of Mexico, Brazil, and Africa. The rise in the activity in these regions actuated due to the ongoing conflict between Russia and Ukraine.

Despite the positive performance of the company, the SLB and its competitors Halliburton and Baker Hughes, projected the drilling activity to palliate in North America, leading to decrease in their shares by over 2 percent to USD 55.90 during pre-market trading.

Olivier Le Peuch, Chief of SLB, has expressed his confidence about the positive momentum in the international and offshore markets for upstream investment. However, there is a slowdown in the North American activity.

During the three months ending June 30, the company’s international revenue has experienced a significant increase of 21 percent of USD 6.3 billion. On the other hand, the North American revenue rose by 14 percent to USD 1.75 billion.

Peter McNally, an analyst at Third Bridge, stated despite the plummeting growth projection for North America, the company has shown an overall improvement in profit margins due to various factors such as pricing power. The company’s recent performance has been quite consistent with their expectations for the year so far.

According to Procurement Resource, SLB has surpassed the expected income of the first quarter of the 2023, due to increasing offshore and international drilling activities. However, the drilling activities experienced a downward trend in North American region. The South American region has shown a significant growth though.