Schlumberger’s profit rises as higher oil prices spur drilling demand

(Reuters) – Schlumberger NV (SLB.N), the world’s largest oilfield services company, reported a rise in fourth-quarter profit on Friday, as higher crude and natural gas prices drove up demand for its services and equipment.

Oil prices surged about 50% last year and are currently trading at seven-year highs on the back of a vaccine-fueled demand recovery and tight supplies in the market.

“Absent any further COVID-related disruption, oil demand is expected to exceed pre-pandemic levels before the end of the year and to further strengthen in 2023,” Schlumberger Chief Executive Officer Olivier Le Peuch said.

In North America, strong offshore and land drilling activity and an uptick in exploration data licensing for the U.S. Gulf of Mexico and Permian basin drove a 13% sequential jump in revenue.

Shares were roughly flat in pre-market trading at $37.13. Brent oil futures were down about 1.7% on Friday to $86.87 a barrel .

Schlumberger’s fourth-quarter adjusted net income rose to $587 million, or 41 cents per share, above Wall Street estimates of 39 cents per share, according to Refinitiv IBES. The company beat last year’s earnings of $309 million, or 22 cents per share. Fourth-quarter revenue of $6.23 billion also topped analysts’ forecast of $6.09 billion.

The worldwide rig count was 1,563 at the end of the fourth quarter, compared with 1,104 in 2020, according to Baker Hughes data.

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