A Review of the Nigerian Energy Industry

Halliburton hit by profit slump

17 October 212, Sweetcrude, HOUSTON – US oil services giant, Halliburton, has seen a drop in third-quarter net profit, due mainly to the effects of Hurricane Isaac.

The profit slump was also traceable to a drop in the North American rig count as operators kept their spending in check.

Net profit for the three months to the end of September was $604 million as against $685 million in the comparable period a year earlier. It was an even larger drop from the $739 million made in the second quarter this year.

But, total revenues rose from $6.55 billion a year ago to $7.11 billion this time around, still a drop from the $7.23 billion taken in the second period.

Operating income, however, was chopped from $1.33 billion a year ago to $954 million this time around. The company made an operating income of $1.2 billion in the second quarter to the end of June.

The drop in revenues from the second to the third quarter was largely put down to the fall in activity in the US land drilling market. There was also pricing pressure on guar, a product used in the hydraulic fracturing process and in stiff demand in the North American market.

Hurricane Isaac also had an effect as operations were halted for a period in the US Gulf of Mexico while Halliburton felt the squeeze as operators kept a tighter rein on spending to stick to stricter 2012 budgets.

“Adjusted international operating income was up 5% sequentially due to strong activity improvements in key geographies such as Mexico, Brazil, Russia, Malaysia, and Australia,” chairman, president and chief executive Dave Lesar said on Wednesday.

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  • Profits cannot possibly be up all the time, especially for a company operating in an industry where oil price volatility is a recurring feature.