Schlumberger Ltd, the world's No.1 oilfield services provider, unveiled a $10 billion share buyback program and reported a slightly better-than-expected quarterly profit as it cut costs to weather a prolonged slump in oil prices. The company, whose comments are closely watched for an insight into the oil industry, said on January 21 that it cut 10,000 jobs in the fourth quarter. It had cut 20,000 jobs earlier in 2015.
Schlumberger's cost of revenue fell 35 percent in the three months ended December 31, while revenue fell 39 percent.
"With the year-end US land rig count 68 percent lower than the 2014 peak, at less than 700 rigs, the massive over-capacity in the land services market offers no signs of pricing recovery in the short to medium term," Chief Executive Paal Kibsgaard said.
Oil and gas companies that use the services provided by Schlumberger and other oilfield companies have slashed spending by 50-70 percent in response to persistently weak oil prices.
Oil companies could slash 2016 spending by around 20 percent if oil prices hover at $40, Barclays said in its annual survey of 225 companies world-wide released earlier this month.
Net loss attributable to Schlumberger was $1.02 billion, or 81 cents per share, in the fourth quarter, compared with a profit of $302 million, or 23 cents per share, a year earlier.