Schlumberger: Higher Oil Demand In 2015 to prompt Oil, Gas Spend

Schlumberger the world’s largest oilfield services company, said oil and gas spending would increase in 2015 as global oil demand is poised to rise, downplaying fears of an investment slowdown due to weak crude prices.

The company reported a better-than-expected quarterly profit, helped by strong drilling activity in North America.

Oil prices have slid nearly 20 percent since June due to oversupply, signs of weak demand growth and indications that key oil producers, particularly Saudi Arabia, have limited appetite to intervene in prices.

The steep fall has sparked fears that oilfield earnings would be hurt with oil and gas customers reigning in spending.

The International Energy Agency cut its 2015 estimate for oil demand growth by 300,000 barrels per day (bpd) to 1.1 million bpd, citing weak global economies.

Oil demand was “largely unchanged”, while supply was relatively “well balanced,” Kibsgaard said on the call.

Oil and gas companies are spending more on maximizing production from existing wells, than on searching for new reserves as they face increasing investor pressure to raise shareholder returns.