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Schlumberger touts streamlining during downturn

Texas-based oil field services company reported a 27 percent drop in revenue from 2014.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   March 2, 2016 at 6:04 AM
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HOUSTON, March 2 (UPI) -- The integration with fellow services company Cameron International will help drive momentum forward as the market recovers, Schlumberger said.

Schlumberger made the offer for the Houston-based maker of tools for oil field development in August, saying the combined entity would have a "pore-to-pipeline" footprint in the industry.

When announcing the deal, Schlumberger Chief Executive Officer Paal Kibsgaard said innovation and integration would help companies like his survive the market downturn.

"The rationale for this acquisition lies in our belief that the industry's next technical breakthrough will be achieved through the integration of Schlumberger downhole reservoir and well technologies with Cameron surface drilling, processing, and flow control technologies," he said in a statement accompanying a full-year 2015 report.

Lower crude oil prices have left companies servicing the energy sector with less capital as spending declines for exploration and production. Industry rivals Halliburton and Baker Hughes aim to join forces to endure the downturn. British energy company BG Group combined with Royal Dutch Shell in a similar effort.

Schlumberger, one of the largest companies in the upstream sector, reported revenue for the fourth quarter came in at $7.7 billion, a 9 percent decline from one year ago. The company said full-year revenue of $35.5 billion marked a drop of 27 percent from 2014.

North American operations accounted for the bulk of the drop, with land-based revenue falling off in the region by 45 percent. The decrease in land activity, Schlumberger said, was the sharpest in 30 years as capital spending in North America declined more than 40 percent last year.

Kibsgaard said the focus for 2016 would be on things the company can control, like efficiency and payroll numbers.

"We will be better prepared when activity rebounds due to arranging a temporary leave of absence for more than 1,800 employees," he said.

The acquisition of Cameron is expected to close at some point this quarter.

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