Oilfield services provider SLB has indicated a potential downturn in spending by oil producers and highlighted the impact of tariffs on its operations in the company’s first-quarter (Q1) earnings results.
The company’s Q1 revenues fell short of expectations, declining by 3% year-on-year to $8.49bn, largely due to reduced drilling activity in Mexico, a slow start in Saudi Arabia and offshore Africa, and a steep decline in Russia due to sanctions.
In Latin America, the company saw a 10% decrease in revenue to $1.5bn, contributing to a 5% drop in total international revenue, which stood at $6.73bn.
On the other hand, the company reported an 8% year-on-year revenue rise in North America, partly driven by strong growth in data centre infrastructure, although this was partly offset by weaker US land drilling.
The company’s financial results complete the Q1 earnings picture for major US oilfield service providers, with rivals Halliburton and Baker Hughes also expressing concerns about diminishing demand and tariff-related expenses, reported Reuters.
Earlier this week, Halliburton warned of a Q2 earnings hit from tariffs and reduced North American oilfield activity. Similarly, Baker Hughes projected deeper spending cuts by global oil producers.
SLB CEO Olivier Le Peuch said: “We expect global upstream investment to decline compared to 2024, with customer spending in the Middle East and Asia being more resilient than other regions.”
He noted that around half of SLB’s operations could be affected by tariffs, especially concerning materials traded between the US and China.
The company is taking steps to optimise its supply chains and intends to pass on some of the tariff costs to its customers.
SLB is also focusing on cost reduction and aligning resources with projected activity levels in the upcoming quarters.
In February, SLB undertook a reorganisation of certain business functions and continued workforce reductions.
For the second half of 2025 (H2 2025), SLB expects revenue to range from flat to a mid-single-digit percentage increase over H1.
Earlier this month, SLB won a contract from Woodside Energy to drill 18 ultra-deep-water wells for the Trion project in Mexico.
“SLB reports lower spending by oil producers and impacts from tariffs” was originally created and published by Offshore Technology, a GlobalData owned brand.
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