Schlumberger 3Q Tumbles; Sees Modest Recovery

CHRIS KAHN

NEW YORK (AP) — Schlumberger said Friday that it expects energy demand will increase, but slowly, as countries recover from a recession that slashed its third-quarter profits by 48 percent.

The Houston-based oil field services company was hit hard this year as crude prices sagged and drilling companies idled half of all rigs in the United States.

But Schlumberger Chairman and CEO Andrew Gould said that government stimulus money has hastened the recovery of a number of industries.

"The worst, provided the economy continues to show signs of recovery, is behind us," Gould told investors on a conference call.

Schlumberger Ltd. reported net income of $787 million, or 65 cents per share, for the third quarter. Schlumberger rival Halliburton Co. reported a 61 percent drop in third-quarter profits last week.

The company said demand for oil and gas will be limited by high unemployment and a worldwide glut in oil and natural gas. Gas drilling in North America has increased slightly, but Schlumberger warned that recovery is "fragile," and that service activity and prices won't improve very much until late 2010.