Schlumberger Expects Russia Sanctions to Hurt Earnings

13 – 8 – 2014

Schlumberger Ltd, the world’s No.1 oilfield services provider, became the first major U.S. company to say that its quarterly earnings would be hurt by U.S. and EU sanctions against Russia.

The company’s warning comes after BP Plc said last month the sanctions could hurt its business. BP is the biggest foreign investor in Russia with a near-20 percent stake in Rosneft, Russia’s largest oil producer.

The United States has put sanctions on Rosneft and Novatek , Russia’s second-largest gas producer, over Russia’s support for rebels in Ukraine.

Schlumberger, which drills with Rosneft on the island of Sakhalin, said on Tuesday that the sanctions would hurt its third-quarter profit by as much as 3 cents per share.

Analysts on average estimate earnings of $1.51 per share in the quarter ending September, according to Thomson Reuters I/B/E/S.

Schlumberger generates about 4 to 5 percent of its revenue from Russia, amounting to about $2.2 billion in annual revenue, according to Simmons & Co.

Schlumberger said the sanctions were “restricting the engagement of people and equipment”, but added that it was confident that it could support its clients in Russia without “material disruption”.

Schlumberger said in July that there was no “real impact” on its business in Russia.

Source: RIGZONE

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