| HOUSTON/QUITO, March 28
HOUSTON/QUITO, March 28 OPEC production cuts and
economic woes are complicating Schlumberger NV's efforts
to collect $1.1 billion from Ecuador's state-owned
Petroamazonas, casting a cloud over the oil services company's
"Continuing payment issues" in Ecuador are hurting earnings,
Chief Executive Officer Paal Kibsgaard said in a text of a
speech delivered at the Scotia Howard Weil energy conference in
New Orleans on Monday.
Earlier this month, Kibsgaard wrote to Ecuadorean President
Rafael Correa seeking to resolve an impasse over unpaid bills
that he said was causing Schlumberger "considerable financial
Kibsgaard wrote that talks between top Schlumberger
executives and Ecuadorean ministry officials since October "have
made no real progress," according to a copy of the letter seen
"The situation is obviously not sustainable in the long
run," he wrote, adding that Schlumberger was forced to expand
debt to finance operations in the country.
Schlumberger did not respond to requests for comment.
Ecuador's Ministry of Hydrocarbons declined to confirm the
talks. The government has acknowledged some problems with
payments to oil companies, without specifying which ones.
Ecuador's economy has been hurt by the global oil-price
downturn and two major earthquakes that killed more than 660,
injured 6,300 and caused damages estimated at up to $3 billion.
Ecuador is holding a presidential election on Sunday. A
leftist Correa ally is slightly ahead in the polls.
Analysts tracked by Thomson Reuters estimate Schlumberger's
first-quarter earnings at 27 cents a share, compared with 40
cents a share a year earlier. The company is expected to report
results on April 21.
The company has invested $3 billion to date in Ecuador under
contracts signed earlier this decade to expand production at two
oilfields, out of total investment that was to reach $4.9
billion over 20 years.
Schlumberger earlier this year reported accounts receivable
as of Dec. 31 rose 7 percent over a year earlier, to $9.39
billion, while 2016 revenue slid 40 percent, to $27.92 billion.
Schlumberger earlier stumbled in its efforts to be paid for
work in financially hard-hit Venezuela, another member of the
Organization of the Petroleum Exporting Countries. Last April,
it cut local workers and pulled out of projects with Petroleos
de Venezuela due to a lack of payments by the state-owned oil
Payment under one deal in Ecuador was to come from a tariff
on incremental oil production in the Auca oil field, one of the
largest in the country. That has been hampered after Ecuador cut
output there by about 10,000 barrels a day to meet its quota
under a November agreement by OPEC.
Since 2014, Halliburton Co, another oilfield
services provider, also has a contract with Petroamazonas that
calls for it to invest $1 billion over five years. A Halliburton
spokeswoman on Tuesday declined to comment on its operations in
(Reporting by Gary McWilliams in Houston and Alexandra Valencia
in Quito; Editing by Leslie Adler)