Oilfield services provider Schlumberger on March 31 said it will implement widespread salary and job cuts as it grapples with a sharp decline in revenue from the oil price collapse.
Oil prices have plunged by more than 60% since the start of the year, prompting scores of oil and gas producers to slash spending on drilling and services. On March 31, U.S. oil benchmark futures were trading around $20.69 a barrel.
The coronavirus pandemic has sharply cut oil demand, while top producers Russia and Saudi Arabia have pledged to pump full bore from April 1, flooding the market with new supply.
Schlumberger said its executives will take a voluntary 20% base salary reduction, starting April 1, and worldwide support personnel will adopt unspecified “modified schedules” that reduce salaries, the company said in a statement.
In North America, it will accelerate a restructuring that includes job cuts and furloughs over the next couple of months, a spokesman said. The company had previously announced plans to reorganize its land-based operations in North America, including idling some 50% of its hydraulic fracturing equipment.
Schlumberger last week said it would reduce its 2020 capital spending budget by 30% due to the price crash, joining a host of major energy companies that have slashed spending amid the twin supply and demand shock.
Shares of Schlumberger were up 3.3% to $13.7 in morning trade, off 65.97% year-to-date.
Recommended Reading
Plus 16 Bcf/d: Power Hungry AI Chips to Amp US NatGas Draw
2024-04-09 - Top U.S. natural gas producers, including Chesapeake Energy and EQT Corp., anticipate up to 16 Bcf/d more U.S. demand for powering AI-chipped data centers in the coming half-dozen years.
Turning Down the Volumes: EQT Latest E&P to Retreat from Painful NatGas Prices
2024-03-05 - Despite moves by EQT, Chesapeake and other gassy E&Ps, natural gas prices will likely remain in a funk for at least the next quarter, analysts said.
CNX Joins Crowd of Companies Cutting Back NatGas Production
2024-03-12 - Appalachian gas producer CNX Resources is reducing natural gas production in 2024 and announced delays for well completions on three shale pads.
Midstream Builds in a Bearish Market
2024-03-11 - Midstream companies are sticking to long term plans for an expanded customer base, despite low gas prices, high storage levels and an uncertain political LNG future.
Exclusive: Can NatGas Save the 'Fragile' Electric Grid?
2024-02-28 - John Harpole, the founder and president of Mercator Energy, says he is concerned about meeting peak electric demand and if investors will hesitate on making LNG export facilities investment decisions after the Biden administration's recent LNG pause, in this Hart Energy LIVE Exclusive interview.