Reports related to this article:
Project(s): View 1 related project in PECWeb
Plant(s): View 1 related plant in PECWeb
Released January 20, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Global economic growth and increased attention to energy security supports a long-term investment climate in the oil and gas industry, the head of services firm SLB (NYSE:SLB) (Houston, Texas) said.
SLB was among the first major energy companies out of the gate with fourth-quarter fiscal reporting. Over the three-month period ending December 31, the company posted total revenue of $9.2 billion, a 1.3% improvement over the third quarter and 3% higher than the same period last year.
However, fourth-quarter net income attributable to SLB was $1.1 billion, down 8% from the third quarter and down 2% year over year, the company reported.
Energy companies last year struggled with a lower-for-longer cycle, with crude oil prices moving in a narrow range and U.S. natural gas prices hitting historic lows. SLB Chief Executive Officer Olivier Le Peuch stressed that upstream investments would likely be subdued in the short-term due to something of a global glut, though that should fade away over time.
"Global economic growth and a heightened focus on energy security, coupled with rising energy demand from AI and data centers, will support the investment outlook for the oil and gas industry throughout the rest of the decade," he said.
Energy security was an issue for SLB even in the third quarter, with Le Peuch expressing concern about potential supply disruptions emanating from conflicts in the Middle East and the ongoing war in Ukraine. Since then, the Israeli government has vetted a cease-fire agreement with Hamas, although the Ukrainian conflict rages on and an agreement to keep sending Russian gas through its territory ended in December.
Tariff threats from President Donald Trump on top trading partners Canada and Mexico, coupled with former President Joe Biden's late-term sanctions on Russia, meanwhile, could upend global markets going forward.
Economists at the Organization of the Petroleum Countries (OPEC) in their January market report said they expected the global economy to expand by a healthy 3.1% this year, and improve to 3.2% next year as inflationary pressures left over from the post-vaccine stage of the COVID-19 pandemic ease.
OPEC also stressed that global oil demand will be "robust," although countries such as the United States, Brazil, Canada and Norway could support the growing appetite for crude.
"As operators across the industry increasingly prioritize production and recovery, our strengths are more critical than ever," Le Peuch said.
Though the U.S. is the world leader in crude oil and natural gas production, SLB saw its revenue stream supported in large part by operations in the Middle East and Asia. North American revenue for 2024 was down 1% year-over-year to $6.7 billion, while the Middle East and Asia posted an 18% increase from 2023 levels to $13 billion.
"Sequentially, fourth-quarter revenue grew slightly, driven by digital sales in North America and higher activity in the Middle East, Europe and North Africa," Le Peuch added.
Of the contracts of note during the fourth quarter, BP plc (NYSE:BP) (London, England) gave SLB's OneSubsea joint venture a contract to support development at the Kaskida prospect in the Gulf of Mexico. Using a floating production platform, BP expects to be able to produce 80,000 barrels per day (BBL/d) of oil from the prospect. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project and Plant databases can learn more from a detailed project report.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
SLB was among the first major energy companies out of the gate with fourth-quarter fiscal reporting. Over the three-month period ending December 31, the company posted total revenue of $9.2 billion, a 1.3% improvement over the third quarter and 3% higher than the same period last year.
However, fourth-quarter net income attributable to SLB was $1.1 billion, down 8% from the third quarter and down 2% year over year, the company reported.
Energy companies last year struggled with a lower-for-longer cycle, with crude oil prices moving in a narrow range and U.S. natural gas prices hitting historic lows. SLB Chief Executive Officer Olivier Le Peuch stressed that upstream investments would likely be subdued in the short-term due to something of a global glut, though that should fade away over time.
"Global economic growth and a heightened focus on energy security, coupled with rising energy demand from AI and data centers, will support the investment outlook for the oil and gas industry throughout the rest of the decade," he said.
Energy security was an issue for SLB even in the third quarter, with Le Peuch expressing concern about potential supply disruptions emanating from conflicts in the Middle East and the ongoing war in Ukraine. Since then, the Israeli government has vetted a cease-fire agreement with Hamas, although the Ukrainian conflict rages on and an agreement to keep sending Russian gas through its territory ended in December.
Tariff threats from President Donald Trump on top trading partners Canada and Mexico, coupled with former President Joe Biden's late-term sanctions on Russia, meanwhile, could upend global markets going forward.
Economists at the Organization of the Petroleum Countries (OPEC) in their January market report said they expected the global economy to expand by a healthy 3.1% this year, and improve to 3.2% next year as inflationary pressures left over from the post-vaccine stage of the COVID-19 pandemic ease.
OPEC also stressed that global oil demand will be "robust," although countries such as the United States, Brazil, Canada and Norway could support the growing appetite for crude.
"As operators across the industry increasingly prioritize production and recovery, our strengths are more critical than ever," Le Peuch said.
Though the U.S. is the world leader in crude oil and natural gas production, SLB saw its revenue stream supported in large part by operations in the Middle East and Asia. North American revenue for 2024 was down 1% year-over-year to $6.7 billion, while the Middle East and Asia posted an 18% increase from 2023 levels to $13 billion.
"Sequentially, fourth-quarter revenue grew slightly, driven by digital sales in North America and higher activity in the Middle East, Europe and North Africa," Le Peuch added.
Of the contracts of note during the fourth quarter, BP plc (NYSE:BP) (London, England) gave SLB's OneSubsea joint venture a contract to support development at the Kaskida prospect in the Gulf of Mexico. Using a floating production platform, BP expects to be able to produce 80,000 barrels per day (BBL/d) of oil from the prospect. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project and Plant databases can learn more from a detailed project report.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
