Top oilfield services companies SLB and Baker Hughes said on Friday they expect higher spending on oil exploration and production, as tighter global supplies driven…
Top oilfield services companies SLB and Baker Hughes said on Friday they expect higher spending on oil exploration and production, as tighter global supplies driven by the Middle East conflict highlight the need for investment, particularly in North America.
The U.S.-Israeli war with Iran has halted 20% of the world's oil that usually flows through the now-closed Strait of Hormuz and shut in 9 million barrels a day of oil production, causing Asian and European countries to scramble for supplies. It has also focused attention on energy security and the need for supply diversity.
"There is a growing need for increased upstream investment to expand global production capacity and ensure we can meet rising demand," Lorenzo Simonelli, CEO of Baker Hughes, said in a post-earnings conference call, adding he sees a potential acceleration of investment decisions for liquefied natural gas projects in North America.
Many countries will likely prioritize supply diversification and invest in exploration once the conflict subsides, SLB CEO Olivier Le Peuch said, adding he expects increased investment in projects in North America and Latin America, including in deepwater offshore markets.
SLB expects oil prices to trade at higher levels after the war than before it, Le Peuch said.
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