Schlumberger to reduce Venezuela operations due to payment problems
13 April 2016
Oilfield services major Schlumberger Ltd said it would scale down its Venezuela operations due to payment problems. The Opec member has been facing a cash crunch due to weak oil markets.
The cash crunch had left the Venezuelan state oil company PDVSA, the only operator of the country's oilfields, with billions of dollars in payment due to service providers.
"Schlumberger appreciates the efforts of its main customer in the country to find alternative payment solutions and remains fully committed to supporting the Venezuelan exploration and production industry," the company said in a statement.
"However, Schlumberger is unable to increase its accounts receivable balances beyond their current level."
According to the company, the reduction would be undertaken through this month, allowing for a safe wind-down of operations.
In 2013, Schlumberger extended PDVSA a $1 billion credit line to allow continued delivery of services even as debts accumulated. Schlumberger took a $49 million loss last year due to Venezuela's currency devaluation and another $472 million in 2014 for the same reason.
In a statement, PDVSA said it "categorically denies information reflected in certain international media regarding a supposed reduction in operations by services firm Schlumberger, Ltd."
Meanwhile, Schlumberger said in a press release: ''Schlumberger appreciates the efforts of its main customer in the country to find alternative payment solutions and remains fully committed to supporting the Venezuelan exploration and production industry. However, Schlumberger is unable to increase its accounts receivable balances beyond their current level.
''The reduction in activity levels will take place over the current month and will be made in close coordination with all customers in Venezuela to continue servicing those customers with available cash flow, while allowing for a safe and orderly wind down of operations for others.
Additionally, Schlumberger reaffirmed its first-quarter revenue guidance of approximately $6.5 billion.