US Oilfield Service Firm SLB Says it Can Rapidly Boost Venezuela Operations

By and

SLB says it is receiving lots of inquiries from customers about Venezuela
Company had over $1 billion in annual revenue from Venezuela a decade ago
Rival Halliburton has said it is working through mechanics around licenses

HOUSTON, Jan 23 (Reuters) – U.S. oilfield service company SLB said on Friday it can rapidly increase its activities in Venezuela, provided the appropriate licensing, safety parameters and compliance measures are in place.

Get the Latest US Focused Energy News Delivered to You! It’s FREE:

The Houston-based company (SLB.N) was among the oil companies that met with White House officials to discuss potential investment in Venezuela after the U.S. ousted President Nicolas Maduro in early January.

“We are already receiving a lot of inquiries from our customers,” SLB CEO Olivier Le Peuch said during a post-earnings conference call.

“I would have to preface this with the right conditions, including licensing, including payments and operating license will have to be put in place,” Le Peuch said.

HALLIBURTON ALSO LOOKING TO RE-ENTER VENEZUELA

Similarly, rival oilfield service provider Halliburton (HAL.N), which also met with White House officials, said this week it would seek to re-enter Venezuela as soon as commercial and legal terms, including payment certainty, were resolved.

Halliburton said it was working through the mechanics of licenses that it said were certain to fall in place.

SLB said it was the only international service company actively operating in Venezuela, delivering services for Chevron under the oil major’s license. Chevron is the only U.S. oil major producing crude in the South American country, with some 240,000 barrels per day in joint ventures with Venezuelan state-run oil company PDVSA.

SLB reported a bigger-than-expected fourth-quarter profit and said it had maintained active facilities, equipment, and local personnel on the ground in Venezuela.

The company said it had more than $1 billion in peak annual revenue from Venezuela about a decade ago, and more than 3,000 people employed in the country. It currently has about 80 Venezuelans working there, and more than 1,000 Venezuelans are employed by SLB overall.

Halliburton has been seeking resumes for a range of positions in Venezuela, including engineers and technicians, according to a job board posting from the oilfield service company last week. The company has also said it could move equipment quickly into Venezuela, adding that it would be fairly straightforward to become operational.

Stifel analyst Stephen Gengaro has said SLB and Halliburton are among the best-positioned companies to benefit from any new investment that flows into Venezuela.

President Donald Trump said on Thursday that U.S. oil companies will soon start drilling for oil in Venezuela, even as companies expressed concern about the viability of quickly returning to the country.

A proposed reform of Venezuela’s hydrocarbons law would allow foreign and local companies to operate oilfields on their own through a new contract model, commercialize output and receive sale proceeds even if acting as minority partners of PDVSA, drafts seen by Reuters on Thursday showed.

Reporting by Arathy Somasekhar in Houston and Tanay Dhumal in Bengaluru; editing by Nathan Crooks, Rod Nickel and Paul Simao