The company said diluted earnings were $0.34 per share, 10c less than the adjusted $0.45 per share for the same period last year, which it said excluded the impairment charge, and $0.35 per share excluding the charge related to losses following the economic and financial crisis in Argentina in the first quarter of 2002.
Oilfield Services revenue of $2.5 billion increased 2% including WesternGeco versus the first quarter of 2002. The worldwide M-I rig count fell 9% over the same period. Revenue decreased 5% year-on-year, substantially less than the average rig count decline of 23%.
Despite the lackluster global economic recovery, and lower US gas demand leading to higher than average gas storage levels, second quarter activity showed signs of resurgence as Asia continued to recover. Activity in Europe, CIS and West Africa remained robust and the US rig count improved modestly, excluding Canada, amid growing concerns surrounding the sustainability of gas production.
Middle East & Asia
Revenue of $627 million increased 18% year-on-year and 6% sequentially outpacing the increase in M-I rig count, which grew 7% and 2% respectively. Pretax operating income of $128 million increased 19% year-on-year and 10% sequentially.
Europe/CIS/ West Africa
Revenue of $676 million increased 11% year-on-year and 10% sequentially exceeding the M-I rig count (excluding CIS) which was flat year-on-year and decreased 1% sequentially. Pretax operating income of $96 million decreased 2% year-on-year but increased 22% sequentially.
Latin America
Revenue of $335 million decreased 15% year-on-year and 13% sequentially in contrast to M-I rig count declines of 25% and 9% respectively. Pretax operating income of $39 million was 13% lower year-on-year and 41% lower sequentially, attributable to one-off contractual gains during the previous quarter.
Ongoing political and economic uncertainty in the region continued to affect business conditions, particularly in Venezuela and Argentina. This was offset to some degree by year-on-year revenue growth in the Mexico & Central America GeoMarket where Schlumberger was awarded an extension for integrated services on the Burgos Alliance II project.
North America
Revenue of $720 million decreased 26% versus the same quarter last year and 2% sequentially, compared with the M-I rig count which decreased 35% year-on-year and 14% sequentially. Pretax operating income of $108 million decreased 52% year-on-year and 12% sequentially.
Highlights
- Acquired A. Comeau and Associates Limited, a leading provider of electrical engineering products and services for artificially lifted wells. In line with the Schlumberger Artificial Lift strategy to provide world-class production optimisation solutions, the latest addition expands the Schlumberger portfolio to provide customers with full service capabilities in electrical submersible pumps, gas lift systems, hydraulic lifting, progressing cavity pumping and real-time monitoring and control.
- Drilled the world's first slimhole rotary steerable well in the North Sea for Shell. The PowerDrive Xtra*475 rotary steerable system successfully drilled 2,377 feet in 43.5 hours with an average rate of penetration of 67ft/hr, making it the first known rotary steerable system successfully to drill this size of hole section. The new system allows for the most demanding of reservoir profiles to be drilled in a single run and will facilitate the economic development of smaller reserve targets in mature environments.
- Launched an advanced stimulation vessel for deepwater service in West Africa. The new generation Galaxie provides high-quality and large-capacity treatments including high-rate frac and packs, acidising and gravel-packing services and is custom designed for the high permeability sandstone and carbonate formations found in the West Africa deepwater environment.
- Leveraged SchlumbergerSema expertise to penetrate the IT market in Angola. SchlumbergerSema was selected to act as IT advisor to a major customer on the integration of IT including LAN/WAN communications, audio/video conferencing and PKI solutions. The advanced IT capability will connect employees in West Africa to subsidiaries in Europe, Africa and the US.
- Signed a five-year Exploration and Production Information Management Agreement with BP Canada Energy Company for the outsourcing of all E&P information management for BP's Canadian Gas Business Unit. Schlumberger will develop and maintain a master data store of BP technical and commercial data, and provide the support services needed to deliver high quality cost-effective data management solutions to BP.
