Schlumberger optimistic of prospects in Iraq

[YANNAVIA]

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Monday, Jun 27, 2011

Iraq will become one of the main revenue contributors to Schlumberger's Middle East operations next year and will be bigger than most of the other markets in the region other than Saudi Arabia, says Andrew Gould. "Next year [iraq] will be really big," says Mr Gould, who is also chairman of the biggest oilfield services company. The company has five rigs actively drilling, for BP and ExxonMobil among others, and will have 10 in operation by early next year. It has 450 employees on the ground and expects the number to rise to about 900 by the end of the year.

Schlumberger does not split out individual countries by revenue, but the Middle East and Asia represent about 23 per cent of the fourth-quarter revenues of its oilfield services division in 2010, which generates the bulk of group revenues. Although most of the world's oil majors have won redevelopment contracts in the country, service companies are doing much of the heavy lifting and concerns about infrastructure remain.

Iraq has set ambitious targets to boost output, aiming for 12m barrels a day within six years, up from the present 2.6m b/d. But industry executives believe it will have to reduce those targets. Today's environment of high oil prices is underpinning what some analysts expect to be record spending on exploration and production this year. Mr Gould says that after the drop in exploration and production spending between 2008 and 2009, it looked as if it "was coming back even stronger". "You can expect record hiring of people [by service companies]," he says, noting that hot spots include the Middle East and North America, where the development of unconventional gas, notably shale, has been the focus.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused. The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.>While "brute force and ignorance opened up shale in the US", the way shale is exploited will change, says Mr Gould. Companies employ hydraulic fracturing, or "fracking", to break open the rock to release the gas by pumping a mixture of water, sand and chemicals or propant under high pressure deep inside. Environmental concerns have focused on the large quantities of water used, as well as fears that not enough is known about the process and its impact on the water table. "There will be more characterisation of rock before you fracture, and as a result the fracture treatments will go down in size and numbers. The advantage of that is that you will use less water, less propant and less sand," he says.

Schlumberger is working on building the right tools, he says, with commercialisation two to three years away. Mr Gould signalled that he will retire from Schlumberger by the end of the year, noting that he was turning 65 in December, "which is traditionally when Schlumberger CEOs retire". Schlumberger promoted Paal Kibsgaard to the position of chief operating officer last year. The advice to his successor: "Just execute. "Provided the economy does not collapse and the oil price stays where it is, all he has to worry about is execution for a few years." Mr Gould, who joined the board of BG Group as a non-executive director, refused to comment on speculation that he might be in the running to succeed Sir Robert Wilson, who is to retire. "I won't stop work and, yes, I would like to stay in the industry," he says.

By Sylvia Pfeifer

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[HYDRANT]

I THINK HIS OUT LOOK IS VERY GOOD ----BUT MAYBE HIS STATEMENT SHOULD OF SAID -----IF ALL GOES WELL IN IRAQ WE PLAN ON HAVING 10 IN OPERATION

[toy82]

I work for Slb as a manager here in the US and I met the gentleman last week that is next in line for ceo of Slb. Funny thing I had no idea who he was so I was just bsing with him... but at the end of the conversation he pretty much said gould (may be leaving) and he (in other words) is fixin to be top guy.

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Just one thing I can add.

[SPRAYERDUDE]

Wish there was a link but appreciate the positive posting Thanks and go RV!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[YANNAVIA]

Wish there was a link but appreciate the positive posting Thanks and go RV!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

??? A link to the article is provided.

[RVnow4meplease]

Thanks for the post

[billy goat]

This is all hype designed to keep money flowing to those betting on the come. Iraqi oil reserves are stupidly over-estimated and supported by our own DOE (politicians) who lack the nuts and bolts know how to present realistic projections. They fail to mention development and production costs in their dream of global economic turn around. It takes three gallons of water to process one gallon of crude and in case you haven't heard, Iraq is in the middle of a drought. The Tigress and Euphrates are at dangerously low levels to even provide enough potable water. Southern Shiite regulated fields are closer to the gulf and can access sea water for processing.