Exxon contractors operating in Guyana post soaring profits

Jul 20, 2023 ExxonMobil, News, Oil & Gas

– say international strength is led by the Latin America, Middle-East

Kaieteur News – The Big three oilfield services (OFS) companies all of which are operating here: Baker Hughes (NASDAQ:BKR), Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB) are set to post a combined second-quarter adjusted profit of US$2.04 billion, compared with US$1.27 billion in the year-ago quarter, thanks to robust demand for their services as well as a surge in offshore oil and gas drilling.

“International strength is led by the Middle-East and Latin America and is powered by a multi-year push to grow oil and gas production capacity, near-term OPEC+ cuts notwithstanding,” BofA analysts said this month. “(OFS) Companies with International/equipment exposure have strong visibility to multi-year volume growth and orders,” TD Cowen analysts said earlier this month.

Norwegian energy intelligence firm, Rystad Energy, has predicted that offshore oil production will surge 35% in the current decade. According to Rystad, offshore production will jump to 3.3 billion barrels per year by the turn of the decade from 2.5 billion in 2021. Surging offshore production in Brazil has significantly improved the utilization of shuttle tankers, with activity soaring by 55% from 695 million barrels in 2013 to 1.07 billion in 2021. A further increase of 72% is forecast by the end of 2030, when total volumes handled by shuttle tankers in the country will hit 1.84 billion barrels.

“There is a need for a new influx of shuttle tankers to meet the increasing demand and replace some of the aging capacity that will be taken out of service. Crude oil extraction will continue for many years to come and, given the robust economics and competitiveness of the offshore industry, new investments in offshore production are likely to continue building, ensuring a bright future lies ahead for the shuttle tanker industry,” says Oddmund Føre, senior vice president of energy service research with Rystad Energy. Hardly surprisingly, OFS stocks are soaring: the sector’s popular benchmark, VanEck Oil Services ETF (OIH), has returned 14.3% in the year-to-date compared to -3.7% return by the energy sector’s Energy Select Sector SPDR Fund (XLE).

Meanwhile, OilPrice.com reported that Baker Hughes (NASDAQ: BKR) reported on Wednesday second-quarter earnings beat analyst expectations as strong global upstream activities and the return of offshore drilling more than offset a recent market softness in North America. Baker Hughes, one of the three biggest energy service providers in the world, reported adjusted diluted earnings of US$0.39 per share for the second quarter. The earnings beat the analyst consensus estimate of US$0.33 per share compiled by The Wall Street Journal.

Orders and revenues both jumped by double digits compared to the same period of last year. Baker Hughes’s orders surged by 28% year-over-year to US$7.5 billion, while revenue jumped by 25% year-over-year to US$6.3 billion for the second quarter. Despite lower oil prices in the first half of 2023, Baker Hughes remains optimistic on the outlook for this year and maintains a constructive outlook for global upstream spending in 2023, Baker Hughes chairman and CEO Lorenzo Simonelli said.

Subsea and surface pressure systems orders boomed in the second quarter, as offshore activities and exploration are accelerating. The world’s top oilfield services provider, SLB, said last month that offshore is the fastest-growing market globally. “Offshore is experiencing a renaissance, with significant breadth and anticipated durability,” SLB’s chief executive Olivier Le Peuch said at the J.P. Morgan Energy, Power & Renewables Conference 2023. Baker Hughes is optimistic about offshore drilling and exploration, too, but it flagged today “market softness in North America,” which it expects to be “more than offset by strength in international and offshore markets.” For its part, Halliburton (NYSE: HAL), the world’s top fracking services provider, also signaled a weaker North American market despite its earnings beating analyst estimates. Total revenues at Halliburton increased by 14% year-on-year to US$5.8 billion in the second quarter. However, revenues from North American operations dropped by 2% compared to the first quarter, to US$2.7 billion. (OILPrice.com)

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

(NASDAQ:BKR), (NYSE:HAL), Baker Hughes, Halliburton, offshore

Latest News