Schlumberger Posts Big 4Q Loss

Schlumberger, the New York and Euronext listed services giant, reported 4Q pretax operating income January 19 of $1.155bn, up 43% year on year, but posted a huge $2.555bn net loss for that quarter including charges for business restructuring and - in common with Halliburton's 4Q results - a big writedown of past Venezuelan investments.

CEO Paal Kibsgaard said: “We closed the year with fourth-quarter revenue growing 3% sequentially [so over 3Q2017] while pretax operating income rose 9%. Sequential growth was driven by strong activity in North America, Saudi Arabia, and Latin America, while revenue in the Europe, CIS, and Africa area seasonally declined." 

Full-year 2017 revenue of $30.4bn increased 9% year-on-year. This included a full year’s activity from the acquired Cameron businesses as compared to three quarters of activity in 2016. Excluding the addition of Cameron, revenue growth was driven by land activity in North America, which increased by 82% in line with the increase in rig count. Full-year Production Group revenue increased 21%, Reservoir Characterization revenue grew by 2%, while Drilling group revenue declined 2%.

But Schlumberger reported a $2.555bn net loss in 4Q2017, including a net 4Q2017 charge of $76mn because of changes in US tax law (comprising a $410mn one-off charge, offset by a $334mn credit from remeasuring deferred US tax liabilities). It made a net profit of $545mn in 3Q2017, and net loss of $204mn in 4Q2016. It posted a $1.505bn net loss for full year 2017, less than its $1.687bn net loss in 2016.

Pre-tax 4Q2017 charges stacked up to $3.04bn, including $1.114bn to restructure WesternGeco seismic "into an asset-light business", a $938mn writedown in Venezuela, and $296mn for workforce reductions.

Schlumberger noted its December 7 completion jointly with Canadian private firm Torxen of the southern Alberta Palliser oil and gas block acquisition for C$1.3bn (US$1bn) from Canada’s Cenovus Energy.