Oilfield services giant SLB issued a cautionary statement on Friday, indicating a possible downturn in global upstream spending in 2025, especially in North and Latin America.
North America is particularly vulnerable to these anticipated short-cycle expenditure cuts, whereas regions such as Asia and the Middle East appear more robust thanks to lower production costs, national energy security imperatives and investments in gas projects.
The decline in crude prices by more than 21% in the April–June quarter compared to the previous year has heightened concerns over a wider-scale pullback in exploration and production investments, reported Reuters.
SLB has highlighted the ongoing market uncertainty influenced by factors such as OPEC+ supply decisions, trade talks and geopolitical tensions.
SLB CEO Olivier Le Peuch said: “The market is navigating several dynamics – including fully supplied oil markets, OPEC+ supply releases, ongoing trade negotiations and geopolitical conflicts.
“Despite this, commodity prices have remained range bound. Meanwhile, customers have selectively adjusted activity, prioritising key projects and planning cautiously, particularly in offshore deep-water markets.”
The company also noted that the tariffs imposed by US President Donald Trump could impact its margins by 20–40 basis points in the latter half of the year.
Despite these challenges, SLB reported total revenue of $8.55bn in the second quarter (Q2), surpassing the anticipated $8.48bn.
SLB experienced a surge due to increased offshore activities and heightened drilling demand in the United Arab Emirates, Kuwait and Iraq.
North American revenues saw a 1% increase to $1.66bn compared to last year, bolstered by advancements in data-centre infrastructure solutions.
The company’s earnings, excluding specific charges and credits, amounted to $0.74 per share for the quarter ending 30 June, marginally exceeding the average forecast of $0.73.
Meanwhile, SLB also recently finalised the acquisition of ChampionX, a deal first announced in April of the previous year.
The completion followed the receipt on Tuesday of the last required regulatory consent from UK authorities.
