By: AGBI

Two of the world’s largest oilfield services companies reported strong activity in the Gulf and wider Middle East during the third quarter, but noted a slowdown in Saudi Arabia. A third business in the industry defied that trend.

US companies SLB and Halliburton said in their latest financial disclosures this past week that operations in countries such as Kuwait, Qatar, the UAE, Iraq and Oman helped to mitigate the effects of lower oil prices and an uncertain global economy.

But a drop in work in Saudi Arabia “more than offset” those gains, SLB said in a press release on October 17. 

SLB’s estimated revenue in the Middle East and Asia was down 11 percent year on year. The fall was driven by sluggish activity in the kingdom as well as Australia and East Asia.

The company reported higher revenue in the UAE, Iraq, Kuwait, Oman and China.

“International markets — while facing challenges in some regions — are demonstrating resilience, with several countries across the Middle East and Asia continuing to show robust growth,” Olivier Le Peuch, CEO of SLB said in a statement. 

“Looking ahead, we expect Opec+ production releases to support investment across many countries where SLB is well established,” he added. 

Oilfield services companies provide the equipment, technology and expertise necessary for majors such as Exxon and Adnoc to explore, drill and produce oil and gas.  

‘Foggy’ outlook

Halliburton’s third-quarter revenue for the Middle East and Asia was $1.4 billion, down 3 percent over the previous quarter, according to a company press release on October 21.

Sliding activity “across multiple product service lines” in Saudi Arabia was the main cause of the drop.

“Partially offsetting this decrease were improved pressure pumping services in Qatar, increased artificial lift activity in Kuwait, and higher completion tool sales and improved fluids services in Asia,” the company said.

At Baker Hughes, international revenue also declined, by 1 percent from the previous three months. It was, however, sustained by a relative increase in activity in the Middle East and Asia, according to an October 23 press release.

“Baker Hughes received a significant, multi-year award from Aramco to expand integrated underbalanced coiled tubing drilling operations in Saudi Arabia,” the company said.

“The contract includes six new units and extensions of four existing units to support re-entry and greenfield drilling projects across the country.”

Energy Transfer, another of the top publicly traded US companies in the industry, will report its earnings for the third quarter on November 5. 

Saudi Arabia’s outlook for oilfield services is “a bit foggy,” Amr Wahby Mahmoud, head of Mena supply chain research at Rystad Energy, told AGBI earlier this month.

Voluntary cuts to Opec+ output beginning two years ago led to the suspension of many rigs in the kingdom. But the ongoing unwinding of the cuts has industry experts believing that work will pick up again in the next year, according to Mahmoud.

“Others say that they will not ramp up again, so it’s a wait-and-see,” he said. “But oilfield services companies are preparing for a ramp up there.”

The UAE’s activity is expected to remain stable for the foreseeable future. Kuwait has “ambitious” plans to increase oil production, and with it demand for oilfield services, Mahmoud added.

However, he cautioned that the emirate has a history of “overpromising and underdelivering”.