SLB Boosts Dividends and Buybacks Amid Oil Oversupply Concerns

Oilfield services giant sees revenue plateau but remains optimistic

by Adedotun Oyeniyi

KEY POINTS


  • SLB raises dividends and plans $2.3 billion in share buybacks.
  • International revenue grows but faces pressure from regional declines.
  • CEO anticipates recovery in oilfield activity by the second quarter.

SLB, the world’s largest oilfield services company, has raised its quarterly dividend by 3.6 percent and announced plans to buy back $2.3 billion in shares at an accelerated pace.

The move follows a strong fourth-quarter performance in 2024, which saw the company exceed profit and revenue expectations. However, SLB also warned of stagnant revenues in 2025 due to concerns over an oversupplied oil market.

The company, previously known as Schlumberger, reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the upcoming year are expected to remain steady or slightly improve compared to 2024 levels. SLB’s shares climbed 7.4 percent to $44.13 during midday trading on Friday.

International growth slows despite regional gains

SLB’s focus on its international business helped offset sluggish growth in North America, with foreign markets contributing 80 percent of total revenue.

Quarterly international revenue rose by 3 percent, driven by a 7 percent increase in the Middle East and Asia, despite a 5 Percent decline in Latin America due to reduced drilling in Mexico.

Revenue from North America grew 7 percent, the highest since mid-2023, largely due to increased offshore activity in the U.S. Gulf of Mexico. However, U.S. land drilling activity saw a decline.

SLB also reported reduced operations in Russia, which now account for 4 percent of its total revenue, down from 5 percent in the previous year.

According to Reuters, the company stated that its voluntary measures in 2023, including halting shipments of products and technology to Russia, align with new U.S. sanctions set to take effect in February 2025.

Steady outlook amidst oversupply concerns

SLB CEO Olivier Le Peuch acknowledged a cautious approach from customers due to oversupply fears but expressed optimism about a recovery in the second quarter.

He stressed on the constant global expenditures in upstream and expected more growth from the other regions such as UAE , China and India, which are expected to offset declines in Saudi Arabia, Egypt, and Mexico.

As for the current situation tied to the volatility of oil prices, Le Peuch insisted that the strong dividend and buyback policy support investors’ trust in SLB’s growth and stability.

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