Schlumberger Ltd., the world's largest oilfield services operator, plans to reduce its workforce even more on the expectation for less activity in 2016, the president of operations said Tuesday.
The industry is facing a second consecutive year of falling upstream investment "for the first time since the mid-1980s," Patrick Schorn told an audience at Cowen & Co.'s Fifth Annual Ultimate Energy Conference in New York City. Schlumberger is seeing its "most significant drop" in business since 1986.
"Looking at the U.S, alone, where the activity decline has been the sharpest, the rig count in the third quarter showed a limited increase to return to the level of the 2008-2009 downturn. However, the fourth quarter is seeing a further leg down that can be expected to reach a new record low."
In the United States, he said, the land rig count that breached 900 on $60 West Texas Intermediate (WTI) at the end of June "quickly declined to a new low as commodity prices fell significantly lower. We now believe that a bottom well below the current low 700s is likely before the downturn ends with a 10-12% decline by the end of the fourth quarter."Click here to continue reading this article.
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