Schlumberger will reduce activity in Venezuela after the world’s largest oil services provider failed to collect enough payments from the national oil company, FuelFix reported. The reduction will take place in April in close coordination with all customers in Venezuela, to be able to continue servicing those with available cash flow, the Houston- and Paris-based contractor said.
Venezuela, which holds the world’s biggest oil reserves, has been battered by the collapse of prices as most of the government’s revenue comes from petrodollars, wrote Seeking Alpha.
By late January, Schlumberger said it had entered into a deal with Petroleos de Venezuela SA (PdVSA) during Q4 to receive certain fixed assets in lieu of payment of about $200m of accounts receivable. However, the company said that it appreciates the efforts of its main customer in the country to find alternative payment solutions, but “Schlumberger is unable to increase its accounts receivable balances beyond their current level.”
Schlumberger is estimated to have generated the most sales in Venezuela, with the country accounting for about 3% of its $35.5b in total revenue last year, Kurt Hallead, an analyst at RBC Capital Markets, wrote in a note to investors. The country represented more than 10% of Schlumberger’s $8.8b in total accounts receivable last year.