HOUSTON: US oilfield service companies exposed to Venezuela face new hits to earnings from the South American nation’s ongoing economic turmoil and US sanctions on the country and state-run oil company PDVSA.
Insufficient investment, payment delays to suppliers, and the sanctions imposed by the administration of US President Donald Trump have hammered Venezuela’s oil industry and saw crude oil production fall 13 per cent in 2017.
On Friday, Schlumberger disclosed a $938 million write-down on its Venezuelan assets and receivables, citing political and economic woes affecting the country.
It was the first big energy company to report fourth quarter results.
Schlumberger and other suppliers accepted promissory notes or reclassified Venezuelan receivables in recent years as a way to manage debts from PDVSA.
But Friday’s charge signals troubles ahead for those with outstanding bills. However, that is likely to be offset by improving business outlooks elsewhere as higher prices for crude boost oilfield activity.
Halliburton and Weatherford International, which will report results over the next two weeks, are also owed money for their Venezuelan operations, the companies said in 2017 filings.
Halliburton in October said it was experiencing payment delays from its primary customer in Venezuela.
At the time, it had $429 million in net trade receivables for its Venezuelan operations. — Reuters
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