Schlumberger CEO sees oil and gas cycle intact

The CEO of Schlumberger Ltd, the world’s largest oilfield services company, on Tuesday repeated his view that the exploration and production cycle should stay strong for years, even as a credit crisis roils world markets.

“Absent a deep global recession and much greater demand reduction than we have seen so far, we consider that both oil and natural gas activity will remain ’stronger for longer,’” Chief Executive Andrew Gould told the company’s 2008 investor meeting.
But it was impossible at this stage to predict to what extent financial market turmoil will affect demand through a slowdown in the overall economy, Gould said.

U.S. lawmakers are contemplating a $700 billion bailout plan to allow the Treasury to buy toxic mortgage-related assets from banks. Without a rescue of some sort, credit markets around the world could remain frozen, leading to a recession.

Factors driving increased exploration and production in coming years include a declining production base and increased exploration of unconventional resources like shale and more deepwater drilling.

Asked about where production was declining around the world, Gould declined to comment. “We don’t discuss the health of our patients in public.”

Reuters