UPDATE 3-Schlumberger profit surges, helped by Middle East & Asia

Fri Jan 17, 2014 10:38am EST
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By Ernest Scheyder and Swetha Gopinath

Jan 17 (Reuters) - Schlumberger Ltd, the world's largest oilfield services company, posted a better-than-expected fourth-quarter profit on Friday as robust international activity offset stiff competition in North America.

Fracking, drilling seismic studies and other lucrative services for oil producers across most of the Middle East, Asia and Latin America helped the company's profit top analysts' estimates for the ninth straight quarter.

Intense competition with Halliburton Co and Baker Hughes Inc for work in North America's vast shale fields, though, combined with weak natural gas prices, eroded regional results.

Without strong sales from the U.S. Gulf of Mexico, North American revenue would have dipped.

"The main challenge in the North America land market is still pricing," Chief Executive Paal Kibsgaard said on a conference call with investors.

Negotiations for new contracts with several key North American customers should further dent results, with pricing falling, he said. Statoil and other international energy firms are Schlumberger's largest North American customers and have used the oversupply of oilfield services to their advantage.

Despite tepid North American growth, Schlumberger expects the global economy to improve in 2014 and oil demand to rise, with double-digit earnings growth across the company for the year, Kibsgaard said.   Continued...