Schlumberger Ltd. (SLB) said the U.S. moratorium on off-shore
drilling in the Gulf of Mexico affects a small portion of the
company's consolidated revenue, adding that the ban's initial
effect is uncertain.
The oilfield services provider has performed better than some
peers thanks to its international exposure in fallout of a
record-breaking oil spill in the Gulf. However, the company noted
Thursday that while the spill's direct effects will mostly occur in
its Gulf operations, it is expecting operators and regulators
worldwide to grow more cautious about deepwater drilling.
The U.S. government's six-month moratorium on deepwater-drilling
permits was a reaction to the fatal explosion of a rig leased by BP
PLC (BP, BP.LN) in the Gulf, which unleashed a torrent of oil that
until recently poured out unchecked for weeks.
Thursday, Schlumberger said its oilfield-services revenue
attributable to the U.S. Gulf represented about 3.5% of
consolidated revenue last year, and its geophysical-services unit
WesternGeco's revenue from the Gulf amounted to about 1.8% of the
whole. The lion's share of both the revenue streams are related
deepwater operations.
Chairman and Chief Executive Andrew Gould said the initial
effect of the moratorium is uncertain as Schlumberger's customers
come to grips with the sudden change in their operations. The
company's "priority is to support its customers and employees as
they safely wind down affected operations."
He added that the company is figuring out the best way to
redeploy skilled staff and newly available equipment. The
moratorium also prompted Schlumberger to accelerate its previously
announced review of North American on-shore operations.
But the company said despite the challenging period for
deepwater drilling at the present, the sector will remain an
important source of oil supply in the longer term.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com