Slump Forces Oil-Field Services Firm to Charge Off $1.7 Billion
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NEW YORK — Schlumberger Ltd., the world’s largest oil-field services company, announced a $1.7-billion charge against fourth-quarter earnings today, reflecting the lower value of its operations in the depressed energy business.
The New York-based giant said the charges consist primarily of write-offs in pumping-service and drilling subdivisions; devaluations of oil-field service equipment and inventories, and the consolidation of other segments of the company.
“In 1986, we have reduced the size of the company, both in organization and assets, to meet the expected business levels,” said Euan Baird, chairman and chief executive officer. “In particular, we have reduced the oil-field services personnel by 35% in 1986.”
Schlumberger has suffered large losses because of sharply lower oil prices, which tumbled from more than $30 a year ago to the $15 level now. Demand for the company’s services in drilling and exploration has tumbled.
The statement today did not indicate whether the company expected to show an overall loss for the year.
In the third quarter ending Sept. 30, Schlumberger reported a loss of $42 million on revenue of $1.29 billion. For the first nine months, it reported earnings of $161.4 million on revenue of $4.29 billion.
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