Schlumberger Ltd. has joined other service companies trimming work in Venezuela because of payment problems.
“This measure is a result of insufficient payments received in recent quarters and a lack of progress in establishing new mechanisms that address past and future accounts receivable,” the company said in a statement.
The cutback will occur this 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.”
Schlumberger didn’t name state-owned Petroleos de Venezuela SA, which has a cash-flow dilemma.
Barclays analysts J. David Anderson and William Thompson said in a research note that Schlumberger’s decision “simply demonstrates Venezuela’s predicament: PDVSA doesn’t have the cash flow to pay oil field service companies, and yet it needs oil field service companies to maximize production to increase cash flow.”
The analysts noted that Baker Hughes Inc. trimmed work in Venezuela in 2014 and that Weatherford reduced operations there and in Ecuador last quarter.
PDVSA issued a statement denying that Schlumberger has reduced operations in Venezuela and lamenting “the smear campaign by the media with the intention of tarnishing the broad business relations between the company and Schlumberger.”
