Oilfield services provider SLB flags risk of lower upstream spending

Top oilfield services firm SLB SLB on Friday warned of a likely decline in global upstream spending in 2025, led by weakness in North and Latin America, sending its shares down nearly 4%.

North America remains the most exposed to the short-cycle spending cuts while Asia and the Middle East are proving more resilient, supported by lower breakevens, national energy security priorities, and gas project investments, it said.

Crude prices BRN1! fell more than 21% in the April–June quarter, from a year earlier, raising concerns about a broader pullback in exploration and production spending.

U.S. energy firms have cut the number of active oil and gas rigs for an 11th straight week in the week ended July 11, for the first time since July 2020, according to Baker Hughes data.

SLB, the first of the Big Three U.S. oilfield services providers to report quarterly results, said the broader market continues to remain uncertain with OPEC+ supply releases, ongoing trade negotiations and geopolitical conflicts.

The company also flagged a 20-40 basis points hit on its margins from U.S. President Donald Trump's tariffs in the second half of the year.

In the second quarter, SLB's total revenue fell 6% to $8.55 billion, but beat expectations of $8.48 billion.

The results came in above expectations, which had been recently lowered following the company's forecast flagging weak activity levels in Saudi Arabia and Latin America, said Tudor Pickering Holt & Co analyst Jeff LeBlanc.