Schlumberger: Potential Venezuelan impairments
Schlumberger, the world’s largest oilfield service provider, on Wednesday raised the prospect of an impairment charge for past work with Venezuela’s state-run oil company.
Schlumberger has $500 million in overdue bills and holds promissory notes received this year from Venezuela in payment for other services that it valued at about $200 million at Sept. 30.
“If conditions in Venezuela worsen, Schlumberger may be required to record adjustments to the carrying value of these assets,” the company said in a Wednesday filing with the U.S. Securities and Exchange Commission.
An executive was unavailable to comment and a spokeswoman declined to respond to questions, citing customer confidentiality agreements.
Schlumberger reduced its role in Venezuela about 18 months ago, citing insufficient payments for services over several quarters. Until this week, its maintained past payment delays from Venezuela had not led to any material write offs.
Separately, the company disclosed a new agreement with Ecuador over $1.1 billion in overdue receivables from that country’s state-run oil firm. The quarterly financial filing didn’t disclose revised terms of the contract.
In a conference call with Wall Street analysts on Friday, Executive Vice President Patrick Shorn said the changes “ensure that this long-term contract remains viable for both parties going forward” and included a revised tariff for oil produced and a sovereign payment guarantee.