How Will Schlumberger’s Revenue Grow In The Next 3 Years?

by Trefis Team
Schlumberger Limited
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The commodity downturn over the last three years caused Schlumberger (NYSE:SLB), the world’s largest oilfield services company, to witness a great decline in its revenue as well as profitability. However, the company held a firm ground and altered its businesses through acquisitions and investments to enhance its product offering and maintain its leadership position in the market. Below is a breakup of Schlumberger’s revenue sources and how each of them is expected to perform in the coming years using our interactive platform.

OneStim And SPM Investments To Drive SLB’s Production Revenue

Schlumberger’s Production division, which contributes about 35% of its total revenue, offers one of its most popular technologies, OneStim solution, that provides a low cost-to-serve and highly competitive service delivery platform, primarily in the North American unconventional plays. In simple words, this technology offers hydraulic fracturing, multistage completions, and a host of other services which are necessary for extending the life of an oil field. In late 2017, Schlumberger acquired Weatherford’s US hydraulic fracturing and pump-down perforating business for a sum of $430 million. This transaction is likely to strengthen the company’s position in the hydraulic fracturing market by challenging Halliburton’s dominance in this market, while enhancing its top-line growth. Further, Schlumberger’s Production Management (SPM) investments during 2017 will enable the company to develop and co-manage various oil and gas projects that will further expand its Production revenue in the coming years. 

Recovery In Drilling Demand Will Cause SLB’s Revenue To Rise Sharply

Given the extension of production cuts by OPEC and Non-OPEC members until the end of this year, Schlumberger expects the oil prices, and in turn, the demand for oil and gas drilling, to continue to grow in 2018. The positive outlook for commodity prices is likely to boost the investment appetite and availability of financing, particularly for the North American drillers. Based on third-party surveys, Schlumberger anticipates a 15%-20% rise in North American investments in 2018 and beyond. Thus, we expect SLB’s drilling and reservoir characterization revenue to grow notably over the next couple of years.

SLB’s OneSubsea Will Further Augment Its Top-Line Growth

Schlumberger acquired Cameron in 2016 in order to leverage its OneSubsea solution. This product primarily integrates and optimizes the entire production system over the life of the field through the use of various cost control technologies. So far, the company has been able to benefit from the additional revenue brought in by the Cameron acquisition. Going forward, we expect the OneSubsea solution to gain increased traction with SLB’s clients, since they are looking to optimize their costs in the current volatile commodity markets. Hence, the company’s revenue from its Cameron division is expected to grow further in the coming years. 

You can create your own forecasts for Schlumberger and its revenue streams using our interactive platform.

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