(Bloomberg) -- The North American fracking market -- already expected to be a downer for the holidays -- is turning out to be even worse than expected, according to the world’s biggest oil service provider.
Schlumberger Ltd. expects sales in the U.S. and Canada to drop 15 percent in the final three months of the year compared with the third quarter, the company said Tuesday. A trio of factors including exhausted exploration spending budgets for this year, volatile crude prices and maxed out pipelines in America’s busiest oil patch has led to customers letting go of frack crews through the end of this year.
“We are seeing a significantly larger drop in activity than we expected, which is leading to a larger drop in pricing than we anticipated,” Patrick Schorn, executive vice president at the Houston- and Paris-based company, said in prepared remarks for an investor presentation. "We continue to see the weakening of the hydraulic fracturing market as temporary, with the expectation of a gradual recovery taking place over the first half of 2019."
The number of crews in the Permian Basin of West Texas and New Mexico that blast water, sand and chemicals underground to release trapped hydrocarbons is down 13 percent from a 2018 high in June, according to Primary Vision Inc.
To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Christine Buurma, Carlos Caminada
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