NEW ORLEANS, Mon Mar 26, 2012 – Schlumberger Ltd., the world’s largest oilfield services company, said profits would be hurt by downward pricing pressure for hydraulic fracturing services, which had now reached North American liquids basins as well.
Chief Executive Paal Kibsgaard said on top of that price squeeze, already widely seen in natural gas areas due to weak gas prices, the shift of pressure pumping equipment to liquids-rich basins was reducing utilization while also adding to costs.
“Together these factors will have an impact on our results both in North America, and overall, in this and in the coming quarters,” Kibsgaard said in a speech to kick off the Howard Weil Energy Conference in New Orleans on Monday.
The use of hydraulic fracturing, or fracking, around the many U.S. shale basins has boosted natural gas production while stemming a decades-long trend of falling U.S. oil production.
“There is some slackening of demand in the gas plays and there has been migration to liquids plays. So there’s more supply coming online and it is normal that pricing would come down,” said David Vaucher, an analyst with IHS-Cambridge Energy Research Associates in Houston.
But supplies in many regions remain scarce in general, from rigs to frack crews, water, sand and synthetic proppants used to keep cracks in shale rock open to get the hydrocarbons out.