Investors of the world’s biggest oil-servicer providers are so far looking past the most punitive round of U.S. sanctions on Russia.
Schlumberger Ltd., the biggest of the hired guns that drill, frack and rejuvenate oil wells globally, has the most at stake in Russia among rivals, Barclays analyst J. David Anderson said April 9 in a phone interview. Even so, that amounts to less than 10% of sales at the Houston- and Paris-based contractor.
Dozens of Russian tycoons and companies were slapped with U.S. sanctions and penalties, sending Moscow-traded stocks to their worst drop in four years. Meanwhile, the Philadelphia Oil Services Index ticked up 1% at 1:10 p.m. in New York.
“From a global oil-market perspective, and the amount of spending that comes out of Russia, it’s a fairly small part of the overall story,” Anderson said. “Investors are probably hesitant to read too much into headlines right now, recognizing that could change very quickly.”
That said, with offshore oil activity still struggling to improve this year, Russia is perhaps more important to Schlumberger than in past years, Anderson said.
As the world’s biggest frackers climb out of the worst crude market crash in a generation, the international oil market is expected to see spending growth for the first time in four years. That will be driven in part by Russia, where oil-field spending is expected to grow 6% to $37.9 billion, according to Barclays.
Schlumberger spokesman Joao Felix declined to comment.
“Schlumberger has really been one of the few to call Russia kind of a core part of their international strategy,” Anderson said. “It’s been a fine market, not a great market.”