Schlumberger sees North American oil activity growing faster than expected

Top oilfield services company Schlumberger (SLB.N) on Wednesday said North American oil and gas activity was growing at a faster pace than expected, as customers have largely shrugged off concerns about a looming recession.

Oil and gas producer customers were more concerned with securing equipment and operational performance than a sudden drop in oil prices or potential recession, Schlumberger Chief Executive Olivier Le Peuch said at a conference on Wednesday.

Le Peuch said international oil activity also has the potential to grow at a faster rate than North American activity going forward.

Shares of Schlumberger were down about 1.6% midday to $36.73 each, as oil futures sank about 4%. Schlumberger’s stock is up about 23% year-to-date.

Oil and gas prices have jumped sharply this year as Western sanctions following Russia’s invasion of Ukraine have disrupted energy supplies and flows. Brent crude was trading around $90 a barrel on Wednesday morning, well off levels seen in recent months, but about 25% higher than a year ago.

“There is huge momentum,” Le Peuch said at the Barclays CEO Energy-Power Conference in New York, adding that current investment rates and consistency are “something I’ve not seen for quite some time.”

As oil prices have climbed and activity has picked up, Schlumberger said it is seeing its best margins in almost a decade.

“I think investors should expect that the margin expansion is here to continue,” he said.