The leading oilfield services firms during the second quarter of 2024 reported Latin America drove international revenue growth and forecast “continued strength” from the region’s activity.
The chiefs of Baker Hughes Co., SLB Ltd. and Halliburton Co. each highlighted the region during their respective second quarter 2024 earnings calls.
“Looking out beyond 2024, we expect global upstream growth to be led by Latin America and West Africa offshore markets and the Middle East, albeit at a decelerated pace,” said Baker Hughes CEO Lorenzo Simonelli. “As the cycle matures, we expect our customers to increasingly focus on optimizing production from existing assets, providing significant growth opportunities for our mature asset solutions.”
He added that, “over the next few years, we see continued strength in gas infrastructure opportunities across the Middle East, U.S., Latin America, and Sub-Saharan Africa, due to secular growth in global natural gas and LNG demand through at least 2040.”
Baker Hughes reported Latin America revenue of $663 million, up 4% sequentially, but down 5% year/year. Management said the company’s Gas Technology Services unit “was awarded a 25-year service agreement to support a customer's offshore operations in Latin America.”
Simonelli said the firm’s Industrial Energy Technology division was awarded “two major offshore topside contracts” during 2Q2024 to provide power generation systems for all-electric floating production, storage and offloading units, “which will be installed offshore in Latin America.”
CFO Nancy Buese noted that, “In Latin America, we continue to experience rig reactivation delays in Mexico.”
Latin America’s drilling rig count stood at 161 as of June 2024, down 15% year/year but up 3% sequentially, according to Baker Hughes and Enverus data.
Halliburton, for its part, reported revenue of $3.4 billion from its international operations, up 8% year/year and “led by Latin America, which delivered a 10% increase,” said CEO Jeff Miller.
“Improved activity across multiple product service lines in Argentina and the Caribbean, higher pressure pumping services in Mexico, and increased drilling-related services in Brazil were offset by lower drilling-related services, decreased project management activity, and decreased software sales in Mexico and lower completion tool sales in the Caribbean,” management said.
SLB, meanwhile, reported its highest quarterly international revenue since 2014 during 2Q2024 at $1.68 billion, with Latin America playing a starring role.
The firm’s Latin America revenue totaled $1.74 billion, up 5% sequentially and 7% year/year.
The sequential growth was due to “higher sales of production systems in Brazil and robust stimulation and intervention activity in Argentina,” management said. The region’s year/year growth was attributed to “higher sales of production systems in Brazil and robust drilling activity in Argentina, partially offset by lower drilling revenue in Mexico,” according to the firm.
SLB “continued to benefit from our enhanced offshore exposure, particularly in deepwater basins across Latin America, Europe & Africa, and in the US Gulf of Mexico,” said CEO Olivier Le Peuch.
He said the company’s core divisions – Reservoir Performance, Well Construction and Production Systems – “grew combined revenue by 4% sequentially and expanded pretax segment operating margin by 120 basis points. This strong performance was driven by the international markets, where revenue once again reached a new cycle high.”
The Production Systems and Reservoir Performance units grew sequentially by 7% and 5%, respectively, Le Peuch said, “with growth led by subsea production systems and with artificial lift, valves, surface production systems, intervention, and stimulation each posting their highest quarterly revenue of the cycle. This was the result of strong activity in Europe and Africa, Latin America, and the Middle East and Asia, stemming from the combination of long-cycle development activity and the acceleration of production and recovery investments.”
He added that, “Well Construction also grew sequentially with measurements and fluids each posting cycle-high quarterly revenue. This was supported by land activity and offshore developments in the Middle East and Asia and Latin America, partially offset by lower drilling in U.S. land.”
