Oil’s Service Firms Write Down $45 Billion, Morgan Stanley Says

© Reuters.

(Bloomberg) — The world’s three biggest oilfield service companies wrote down the value of their assets to the tune of about $45 billion during the past year as customers engaged in severe spending cutbacks, according to Morgan Stanley (NYSE:).

The combined write offs, half of which stem from what were supposed to be blockbuster M&A deals, almost equal their combined market capitalization, analysts including Connor Lynagh wrote in a note to clients on Wednesday.

“The industry now appears to be in a significant capacity reduction and repair phase that we think will not quickly reverse,” the analysts wrote. “From a supply-side perspective, we think this effectively marks the bottom of the cycle.”

The hired hands of the oil patch who map underground pockets of oil and drill wells have taken much of the brunt of the worst-ever crude crash. Schlumberger (NYSE:) Ltd., Halliburton (NYSE:) Co. and Baker Hughes Co. are shrinking head count while emphasizing a greater push toward digitalization in hopes of boosting profits as customers eschew big-dollar drilling projects.

©2020 Bloomberg L.P.


Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

See also  Vodafone's tower company Vantage targets growth

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Please enter your comment!
Please enter your name here