HOUSTON (P3P) – U.S. oilfield service firms uncovered to Venezuela face new hits to earnings from the South American nationâ€™s ongoing financial turmoil and U.S. sanctions on the nation and state-run oil firm PDVSA.
Inadequate funding, cost delays to suppliers, and the sanctions imposed by the administration of U.S. President Donald Trump have hammered Venezuelaâ€™s oil business and noticed crude oil manufacturing fall 13 p.c in 2017.
On Friday, Schlumberger (SLB.N) disclosed a $938 million write-down on its Venezuelan belongings and receivables, citing political and financial woes affecting the nation. It was the primary huge vitality firm to report fourth quarter outcomes.
Schlumberger and different suppliers accepted promissory notes or reclassified Venezuelan receivables in recent times as a approach to handle money owed from PDVSA [PDVSA.UL]. However Fridayâ€™s cost alerts troubles forward for these with excellent payments.
Nonetheless, that’s more likely to be offset by bettering enterprise outlooks elsewhere as greater costs for crude enhance oilfield exercise.
Halliburton (HAL.N) and Weatherford Worldwide (WFT.N), which can report outcomes over the subsequent two weeks, are additionally owed cash for his or her Venezuelan operations, the businesses mentioned in 2017 filings.
Halliburton in October mentioned it was experiencing cost delays from its major buyer in Venezuela. On the time, it had $429 million in web commerce receivables for its Venezuelan operations.
In the meantime, Weatherford mentioned in November that it will reclassify $158 million in receivables owed from its largest buyer in Venezuela as non-current belongings to mirror cost delays.
â€śThe sanctions might have an effect on our capability to gather cost on our receivables,â€ť Weatherford mentioned on the time.
A consultant for Halliburton didn’t instantly reply to a request for remark. Weatherford declined to remark.
Schlumberger mentioned it will stay in Venezuela and proceed to hunt cost for its work.
â€śItâ€™s seemingly theyâ€™ll preserve a presence however solely work if they’re paid up entrance,â€ť James West, senior managing director and a accomplice at funding financial institution Evercore ISI, mentioned of the suppliers.
America in August slapped sanctions on Venezuela in a bid to punish actions by socialist President Nicolas Maduro, whose consolidation of energy has sparked political turmoil. The sanctions prohibit dealings in new debt from the Venezuelan authorities and PDVSA.