UPDATE 3-Schlumberger sees prudence as new normal for U.S. shale oil
(Rewrites first paragraph, adds background, comments on deepwater sector)
March 23 (Reuters) - The U.S. shale oil industry may have forever abandoned its heavy-spending ways in the face of sliding crude prices, Schlumberger Ltd, the world's No.1 oilfield services provider, said on Monday.
Spending cuts already announced by producers - to the tune of 25 to 60 percent - have dropped the rig count by 45 percent since late 2014, and output will soon decline or flatten out so prices can recover, Schlumberger Chief Executive Paal Kibsgaard said.
U.S. oil prices have fallen by 50 percent since June to below $50 per barrel as growing supplies of tight oil from shale and oil sands in North America overwhelm weak global demand.
The Organization of the Petroleum Exporting Countries has refrained from cutting output to lift prices, a move Kibsgaard said may be part of an effort to test the resilience of higher cost producers.
At the time of $100 oil, some highly-leveraged U.S. players were known for their intensive capex budgets. That has changed.
"Going forward, we believe financial prudence, where investments are limited to the cash flow generated by production, will be the new normal for U.S. tight-oil developments," he said at the Scotia Howard Weil Energy conference in New Orleans.
Outside of North America, Schlumberger expects the oil and gas industry's international spending on exploration and production to drop by 10 to 15 percent in 2015, continuing a trend seen last year.
He said this is related to a "sharp reduction" in deepwater exploration activity that could delay the sanctioning of new developments, adding that the company is seeing lower activity and pricing pressure in the Gulf of Mexico. Continued...