Halliburton Sees Years of Growth as Mideast Rebuilds

SUBSCRIBE SEARCH ARTICLES NEWS Halliburton Co. is predicting years of growth for oil field service work as nations replenish crude reserves and the Middle East rebuilds infrastructure damaged in the Iran war. Image by mikdam via iStock

Halliburton Co. is predicting years of growth for oil field service work as nations replenish crude reserves and the Middle East rebuilds infrastructure damaged in the Iran war.

“We are another three months into one of the largest energy disruptions in history,” Chief Executive Officer Jeff Miller said Tuesday in the company’s quarterly earnings statement. “I expect the work to restore production, rebuild inventories and strengthen energy security will drive multi-year demand growth for oil field services.”

The company’s shares rose 1.2% at 11:06 a.m. in New York.

Halliburton’s results are closely watched by the energy industry because the Houston-based company is traditionally the first of the three big, international oil field service providers to report quarterly earnings. That’s especially important now as the sector is grappling with the impacts of both the conflict in the Middle East and Russia’s war against Ukraine.

Halliburton reported adjusted operating income of $731 million during the third quarter, beating the average analyst estimate of $729.9 million.

The company’s biggest revenue boost came from the Middle East and Asia, where it earned $1.4 billion — an 8% jump from the second quarter. The gains were mainly from higher activity in Saudi Arabia and Kuwait, the company said.

Halliburton is seeing increased business in countries in the region including Iraq, Miller said during Tuesday’s earnings call with analysts and investors. The company expects fourth quarter revenue from the Middle East to be higher than in the third quarter and the year-earlier period.

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The firm is also gearing up for more activity in Venezuela, with Chief Operating Officer Shannon Slocum saying that Halliburton is “open for business” in the South American nation.

“Our management team is in place, our facilities are open, key equipment has moved,” Slocum said, noting the company already generated revenue in “multiple product lines” in the third quarter. “Venezuela is a market we know well, and based on customer conversations, I expect to see solid growth moving forward.”

Halliburton last month said it signed non-binding agreements with Eneva SA, Brazil’s largest private natural gas operator, and engineering firm West-Construcciones CA to support the development of oil and gas projects in Venezuela. The company shut down primary operations in the country in 2020 amid tightening US sanctions against the nation’s socialist regime.

Next year, Halliburton expects mid-single digit revenue growth and operating margins of about 15%, up from 13%. The outlook assumes the North America market remains flat and doesn’t take into account any recovery for fracking in the region.

US producers have taken some steps to increase production as the Iran war has pushed crude prices above $100 a barrel. The fleet of rigs drilling US oil wells averaged 451 during the third quarter, 8.4% higher than a year earlier. Yet overall output from US shale fields is only up around 1% since the war began.

The world’s largest oil field service provider, SLB, reports third-quarter results on Friday, followed by Baker Hughes Co. on Oct. 27.

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