Oil industry to boost spending: Schlumberger

Oil and natural gas producers are ready to boost spending to capture the benefit of higher energy prices, although surging inflation and supply chain delays remain obstacles, according to oilfield services contractor Schlumberger.

Under investment in energy production left the world short on oil supply, lifting crude prices even prior to Russia's invasion of Ukraine, chief executive Oliver Le Peuch said today at the CERAWeek by S&P Global conference in Houston, Texas. That laid the groundwork for a brewing global up cycle in onshore and offshore production, he said.

Producers are starting to increase their capital spending to increase production as well as to reduce carbon emissions.

"We see customers ready to spend, ready to uplift their spend," Le Peuch said.

Supply chains have been highly disrupted for nearly a year, adding to inflation that is running at four-decade highs in the US. The war in Ukraine has aggravated the situation, lengthening shipping delays as routes are altered and cargo spaces become overbooked, he said.

"The routes are getting longer, more costly," Le Peuch said. "It is not the perfect storm, but it is close to it."

By Jack Kaskey