En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Only higher oil prices will spur int'l spending-Baker Hughes



Petroleumworld.com 01 27 2017

Oilfield services provider Baker Hughes Inc, which is being acquired by General Electric Co , said crude oil prices would need to rise by roughly another 15 percent to spur producers to spend more on drilling outside North America.

Oil prices in the mid- to upper-$50s-per-barrel range would encourage North American producers, while prices above $65 per barrel would coax international producers to boost spending, Chief Executive Martin Craighead said.

U.S. crude oil futures were at nearly $54 per barrel at 1800 GMT on Thursday, while Brent prices were at $56.32.

While producers have put more rigs back to work in low-cost North American shale fields, such as the Permian Basin in Texas, due to higher oil prices, they have been reluctant to bet bigger on the expensive deepwater and mature oilfields outside the region.

But, Baker Hughes said its revenue from North America would fall again in the current quarter, which coupled with a bigger-than-expected fourth-quarter loss due to a higher tax rate, sent the company's shares down about 1 percent to $62.92.

Baker Hughes said its current-quarter North America revenue would be hurt by reduced activity in the Gulf of Mexico and the spin off of its pressure pumping business.

The company said it expects revenue from the region to rise over the first half of the year as producers ramp up onshore drilling, but said any pricing improvements would be limited as the market stays oversupplied.

The company expects its international revenue to fall by "mid to upper single digits" in percentage terms this quarter, reinforcing the subdued demand predicted by rivals Halliburton Co and Schlumberger NV.

Net loss attributable to Baker Hughes rose to $417 million in the fourth quarter from $1.03 billion a year earlier when it booked a $1.25 billion impairment charge.

Excluding such items, it loss 30 cents per share, much more than analysts' average estimate of a 11 cents loss, according to Thomson Reuters I/B/E/S. At least six analysts said the difference was due to a higher tax rate.

Baker Hughes' revenue fell about 29 percent to $2.41 billion, beating analysts' average estimate of $2.37 billion.

Revenue from its North America business fell nearly 32 percent, while revenue from other regions dropped nearly 29 percent, the company said.

GE said last week that revenue in its oil and gas business, which sells products for exploration and production, fell 22 percent in the latest quarter due to weak market conditions.

Reporting by Vishaka George and Swetha Gopinath in Bengaluru; Editing by Sayantani Ghosh and Savio D'Souza from Reuters.

We invite all our readers to share with us
their views and comments about this article

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels









Contact: editor@petroleumworld.com,

Editor & Publisher:P.Ohep F. /Producer - Publisher:P.Ohep F./
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2016, Petroleumworld   / Elio Ohep Fitzgerald- All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.