Oil service wars

22 October 2007 By Cyrus Sanati

Investors lopped $20bn off Schlumberger s market value because of project delays. Meanwhile, rival Halliburton has been successful in chipping away at Schlumberger s dominance in the lucrative eastern hemisphere. These slipups will make it easier for Halliburton to take even more.

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On Friday, Schlumberger reported thirdquarter revenue of $5.93bn versus $5.64bn in the second quarter of 2007, and $4.95bn in the third quarter of 2006. Revenue and profit from its operations in North American fell 3% and 16% respectively from the second quarter. The company's stock fell 11% on Friday and then fell another 4% on Monday.

Halliburton's thirdquarter net income rose 19% on strong growth from operation in the eastern hemisphere. Revenue and profit from its operations in North America were up 6% and 1%, respectively, from the second quarter. The company's stock fell 5% on the sour Schlumberger earnings. Its stock recovered a bit of ground on on Monday, closing up 1.3%.

Schlumberger is the world's largest oilfield service company. The majority of its revenues, 75%, come from operations in the eastern hemisphere.

Halliburton is the world's second largest oil field company. The majority of its revenues, 70%, are derived from operations in the western hemisphere.

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