Schlumberger Ltd, the world’s No.1 oilfield services provider, said it expects the oil and gas industry’s spending internationally on exploration and production to drop by 10-15 percent in 2015.
A 50 percent drop in global oil prices since June has prompted oil and gas producers to cut back spending and shore up dwindling cash reserves.
The fall in spending will keep production subdued and could lead to a further increase in oil prices in the second half of the year, Chief Executive Paal Kibsgaard said at the Scotia Howard Weil Energy conference in New Orleans.
Kibsgaard said while North America production would grow in 2015, it would likely fall in 2016, leaving a supply gap that will have to be filled by international producers.
Kibsgaard said there had been a “dramatic” collapse in land drilling activity in North America and that an increase in the number of uncompleted wells would delay a recovery in U.S. land drilling activity.