US oilfield companies could withdraw from Russia and easily replace the lost revenue with an expected boom in new oil and gas drilling elsewhere, a top oilfield service expert said.

Russia’s invasion of Ukraine has prompted Western energy companies to suspend operations or withdraw, leaving behind investments. Russia is among the world’s largest oil and gas producers that primarily relies on home-grown service providers.

The surge in oil prices will lift global spending on oilfield equipment and services by 30 per cent this year over last to US$260 billion, double the 14 per cent increase previously forecast, Richard Spears, vice-president of consultants Spears & Associates, said in an interview. Market growth will be the highest since 2006.

Top oilfield service firms, including Schlumberger, Halliburton and Baker Hughes this week declined to comment on their Russian operations. Shares of Schlumberger were off about 4 per cent on Tuesday, Halliburton was down 4.2 per cent, and Baker Hughes fell 3.5 per cent.

Schlumberger, the top oilfield service firm by revenue, gets between 5 per cent and 6 per cent of its revenue from Russia, Spears said.

“If Schlumberger loses all of its Russian business, it will more than make up for that simply by all the rising drilling and completions business all over the world,” he said. “It may lose 5 per cent of its revenue, but it will grow by 20 per cent all over the world.”

Global oil futures were up about 9.2 per cent on Tuesday, trading over US$107 a barrel.

Schlumberger has been issuing regular bulletins to staff on the expanding sanctions that cover sharing critical-industry goods and technology in Russia, according to internal documents reviewed by Reuters.

Initial US and UK sanctions had “minimal” impact, the company told workers last month.

The company did not respond to a request for comment on the bulletins.
Source: Reuters