The world’s largest oilfield services provider, Schlumberger Limited (SLB - Free Report) has made some progress with its collection of past dues from the Venezuelan state-run oil holding Petróleos de Venezuela SA (“PDVSA”). The company announced this after a recent meeting with PDVSA. The amount of dues to be cleared was not disclosed, but Schlumberger now would be able to recognize all revenues associated with its first quarter 2013 operations. This development is welcome news for Schlumberger which experienced a choppy fourth quarter in 2012 due to transitory issues in the international market.
The doldrums are continuing since the 2008 financial crisis when the cash strapped PDVSA delayed payments to oil-service providers operating in the country. The state run Venezuelan oil giant, which is yet to release its 2012 financial results, had however hinted in its website that its total debt rose 15% year over year to $40 billion last year.
Recently, on Mar 22, Venezuela's oil minister Rafael Ramirez told reporters that the state owned company owed a total of $16.5 billion to oil service providers like Schlumberger, Halliburton Company (HAL - Free Report) , Baker Hughes Inc. and Weatherford International (WFT - Free Report) .
However, the managing bodies of oil-service providers like Chief Executive Paal Kibsgaards of Schlumberger recently hinted at a temporary cut back in the activity of developing Venezuelan assets. This is likely to have resolved the situation for service providers to some extent, as the country’s revenues are heavily dependent on oil production.
Schlumberger is one of the world’s leading suppliers of technology, integrated project management and information solutions to customers working in the oil and gas industry worldwide. Employing more than 118,000 people representing over 140 nationalities and working in approximately 85 countries, Schlumberger provides the industry’s widest range of products and services from exploration through production.
Schlumberger shares currently retain a Zacks Rank #3, which translates into a short-term Hold rating.