Opinions Vary on How Quickly U.S. Will Recover from Energy Downturn
The energy markets may not begin to recover for months, but North America should heal faster than anywhere else in the world, a top Halliburton Co. executive said Monday.
President Jeff Miller sat in for CEO Dave Lesar During the Company's first quarter conference call. As Schlumberger Ltd. executives Indicated on Friday, the Outlook IS Murky Because rigs Continue to fall and business Continues to Contract (SeeShale Daily, April 17 ). Halliburton , the No. 1 US onshore operator, is confident that North America will be primed and ready once business accelerates.
"It's our view that North America will continue to be the most adaptable market, in terms of addressing well economics through both efficiency models and technology uptake," Miller said. "The US unconventional business is now the lowest cost, fastest-to-market incremental barrel of oil available in the world today.
"One thing we've helped our unconventional customers prove over the years is that they are smart, technically savvy and very adaptable companies. I'm confident that this type of market will show that again. As a result, we believe that when the recovery does come, North America will respond the quickest and offer the greatest upside. And that Halliburton will be best positioned to lead the way ... We've been through these cycles before. We know what to do and we'll execute on that experience. "Reuters reports, though, that Schlumberger doesn't have quite so rosy an outlook:
An eventual recovery in U.S. oil drilling activity after the biggest slump in three decades may never reach last year's frenzied pace, according to the world's largest oilfield services company.
The drilling recovery will likely to be slower to emerge due to a growing reserve of wells that have been drilled but not yet hydraulically fractured and increased activity in re-fracking wells that are running dry, Schlumberger Ltd Chief Executive Paal Kibsgaard said in a conference call Friday.
Schlumberger expects the rebound in U.S. onshore drilling "will be pushed out in time as the inventory of uncompleted wells drilled and the refracturing market expand," Kibsgaard told analysts following the announcement of the company's earnings.What seems clear is that no one should be holding their breath that things will bounce back within the next few months.
The recovery "will fall well short of reaching previous levels."
The message suggests that the disconnect between rigs drilling for oil and the trajectory of U.S. production may get worse before it gets better. While U.S. output rose in tandem with the number of rigs in the early years of the shale boom, output has continued climbing even as the rig count collapses to less than half its October peak.
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