HOUSTON, April 22 (UPI) -- Schlumberger, the largest oil field services company in the world, said its first quarter revenue experienced one of its sharpest declines since 2014.
The company said revenue through March 31 was $6.5 billion, a 16 percent drop from the previous quarter and 36 percent lower year-on-year.
Chairman and CEO Paal Kibsgaard said in a statement the sequential decrease was one of the largest since crude oil prices started moving sharply lower near the end of 2014.
"This was driven by a continuing drop in activity and persistent pricing pressure throughout our global operations as well as from project delays, job cancellations and activity disruptions," he said.
Lower crude oil prices, off about 60 percent from the 2014 highs, have left energy companies with less capital to invest in exploration and production activity, the side of the industry companies like Schlumberger serve.
In North America alone, Kibsgaard said the inland rig count was about 80 percent lower than it was in October 2014. First quarter revenue for Schlumberger in North America was $1.5 billion, a 25 percent decline from fourth quarter 2014.
Last month, Kibsgaard told industry leaders at an energy conference in New Orleans corporate evolution from the services sector may be a necessity. Project performance, he said, can only be improved by leaving the downturn behind and adopting a new approach "based on collaboration and commercial alignment between the operators and the largest service companies."
In its quarterly statement, Schlumberger outlined details of three separate mergers during the first quarter, including the $1.24 billion deal with its smaller industry counterpart Cameron International Corp.
Looking forward, Kibsgaard said he expected spending cuts in exploration and production would be sharper than previously expected, even though there's been a recovery in crude oil prices he said was triggered by supply disruptions, like last weekend's strike in Kuwait, and talks of a production freeze among major oil states.
"We will continue to tailor costs and resources to activity, while remaining cautious in adding back capacity given the unpredictable nature of the current market," he said.