The global oil service market has entered an upward cycle

The performance reports released by the three major international oil service companies Schlumberger, Halliburton and Baker Hughes show that with the rebound of energy demand, the global oil service market is re-entering the upward cycle
.
The three oil service giants are also optimistic about the development of the industry this year, believing that if the new crown pneumonia epidemic does not bring further disruption, the energy sector, especially the oil service industry, will fully benefit from this upward cycle and will be further boosted in 2023
.

Oil service performance improved significantly

The Nasdaq index showed that as of February 9, the four major oil services stocks - Schlumberger, Halliburton, Baker Hughes and oil services and equipment supplier RPC - were the best
performers.
According to the US investment research company, the oilfield services industry has outperformed the S&P 500 composite index in the past year, and the stock price has risen by 34.
6%
overall.

Specifically, the world's three major oil service companies all turned losses into profits
last year.
Among them, Schlumberger, the largest oil service provider, achieved a net profit of $601 million in the fourth quarter of last year, a year-on-year increase of 61%, and a profit of $1.
881 billion last year, a year-on-year increase of 117.
88%.

Halliburton posted a net profit of $824 million in the fourth quarter of last year and a full-year profit of $1.
457 billion
.
Baker Hughes posted a net profit of $294 million in the fourth quarter of last year and $428 million
in pretax profit for the full year last year.

Against this background, the industry's upside expectations for the oil service market have strengthened
.
Energy and engineering services provider Wood Group said oilfield services and energy industry suppliers will have a bumper year this year, especially in the energy sector and built environment projects
.

It is understood that the number of orders of Wood Group at the end of last year increased significantly year-on-year, which brought sufficient support
to the company's activities this year.
"The order volume is still growing in the first half of the year, and the performance will be stronger in the second half of the year, and the momentum of the oil service business has improved significantly
.
" Robin Watson, CEO of the company, said, "We are confident
in the activity of the oil service market this year.
”

On the verge of an upcycle

Schlumberger CEO Olivier LePeuch believes the oil services industry is on the verge
of a strong upcycle.
"Oil demand growth is expected to exceed pre-pandemic peaks, and coupled with tight supply and declining inventories, oil and gas producers will see an increase
in capital spending this year.
" He said, "We are more and more confident that
the oil service market will continue to grow in the future.
”

Schlumberger expects overall revenue growth to be in double digits this year, with onshore, offshore and North America shale operations being the main support
.

Halliburton also pointed out that the fundamentals of the oil service industry will maintain steady growth, which will stimulate the recovery of the North American shale and overseas oil service business, and the company will benefit
from this upcycle.

It is understood that the shale-producing region of North America is becoming one of the
regions with strong growth in oil service activity.
Schlumberger expects to increase spending in North America by at least 20 percent
this year.

North American shale exploration recovers

Reuters pointed out that as international oil prices continue to rise, drillers see more business opportunities, and oilfield service providers in the United States are busy adding rigs and fracturing operators
in high-cost shale-producing areas.

Since February, as energy demand grows and inventories accelerate dwindling, U.
S.
oil and gas producers are increasing spending at double-digit rates and seeking more drilling activity in hopes of providing more oil
to a market where demand exceeds supply.

Chris Wright, CEO of American Liberty Oilers, said: "The current drilling economy is better than at any time since the shale revolution
began.
”

It is understood that drilling activities in shale-producing areas such as the Denver-Julesbur Basin in northeastern Colorado, the Powder River Basin in Wyoming, the Haynesville shale gas reservoir in Louisiana and the Bakken Shale in North Dakota are becoming increasingly active
.

U.
S.
investment bank Gao Hong pointed out that the spending budget of independent shale producers in the United States has increased by 13%
from a year ago.
Energy research firm East Daly Capital estimates that natural gas production from the Haynesville shale reservoir is expected to grow by 12 percent
this year.

Ben Dell, managing partner at private equity firm Kimmeridge Management, said every shale basin is enjoying a boost
from higher oil and gas prices.

The outlook for the next five years is good

According to the US financial information website "Market Watch", the compound annual growth rate of the global oil service market will reach 6.
7% in the next five years, and the market size will reach 303.
04 billion US dollars
by 2027.

Barclays pointed out that the continued prosperity of the oil service industry is inevitable, and the difference is only in which regions have the fastest growth and which regions have the strongest growth
.

At a time when strong fuel demand and ongoing tensions in Eastern Europe are fueling higher oil prices, which will drive exploration, production and drilling activities, digital solutions can not only increase returns for oil and gas producers, shorten project cycles, increase productivity and efficiency, but also help oil service providers reduce costs and carbon emissions, thereby optimizing cash flow
.