Schlumberger has reported 2008 revenue of $27.16 billion versus $23.28 billion in 2007. Income from continuing operations, excluding charges and credits, reached $5.49 billion, representing diluted earnings-per-share of $4.50 versus $4.18 in 2007. Income from continuing operations, including charges and credits, was $5.40 billion, representing diluted earnings-per-share of $4.42 versus $4.20 in 2007.
Fourth-quarter revenue was $6.87 billion versus $7.26 billion in the third quarter of 2008, and $6.25 billion in the fourth quarter of 2007.
Income from continuing operations, including charges and credits, was $1.15 billion or $0.95 per share versus $1.25 in the previous quarter, and $1.12 in the fourth quarter of 2007.
Oilfield Services revenue of $6.26 billion decreased 2% sequentially but increased 15% year-on-year. Pretax segment operating income of $1.60 billion decreased 6% sequentially but increased 4% year-on-year.
WesternGeco revenue of $599 million decreased 33% sequentially and 25% year-on-year. Pretax segment operating income of $88 million decreased 75% sequentially and 68% year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented, "The sequential revenue decline in Oilfield Services in the fourth quarter was largely due to the weakening of many local currencies against the US dollar, lower activity in Russia and, with the exception of North America, generally weaker activity around the globe. This was due in part to seasonal weather and in part to initial client curtailment of spending. As a consequence, with the exception of North America, pretax operating margins declined.
"At WesternGeco, a sequential 33% decline in quarterly revenue was largely due to decreases in Marine which was affected by vessel transits, dry docks and project start ups. Multiclient revenue also decreased significantly as customers reduced discretionary spending. Margins suffered in consequence. At the end of the year WesternGeco benefited from an all-time record backlog of $1.77 billion.
"The sharp drop in oil and gas prices due to lower demand, higher inventories and the belief that demand will erode further in 2009 as a result of reduced economic activity, is leading to rapid and substantial reductions in exploration and production expenditure. At current prices most of the new categories of hydrocarbon resources are not economic to develop. It will take time for inflation to be removed from the system and to bring finding and development costs more in line with lower oil and gas prices.
"We expect 2009 activity to weaken across the board with the most significant declines occurring in North American gas drilling, Russian oil production enhancement and in mature offshore basins. Exploration offshore will be somewhat curtailed but commitments already planned are likely to be honored. Seismic expenditures particularly for multiclient data are likely to decrease from last year. Pricing erosion will compound these effects on revenue.
"In this market we are taking the necessary actions to adjust our operating cost base while preserving our long-term commitments to technology development, key skill sets and service and product quality.
"The key indicator of a future recovery in oilfield services activity will be a stabilization and recovery in the demand for oil. The recent years of increased exploration and production spending have not been sufficient to substantially improve the supply situation. The age of the production base, accelerating decline rates and the smaller size of recently developed fields will mean that any prolonged reduction in investment will sow the seeds of a strong rebound. We have no doubt that Schlumberger will emerge from the current downturn a stronger company, better positioned to participate in the subsequent upturn."
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