Schlumberger (SLB) Secures Deal to Drill Wells in Southern Iraq

Schlumberger (NYSE:SLB) Limited SLB has recently got a contract to drill 96 oil wells in southern Iraq. The contract has been valued at $480 million and the leading oilfield service provider will be working for Exxon Mobil Corporation (NYSE:XOM) XOM and Basra Oil Company — a national Iraqi company. The news is as per Iraq’s cabinet announcement.

Notably, the authorities of the country have not disclosed specifically the site where the operations related to new drilling activities will take place. Importantly, in southern Iraq, this is not the first time that Schlumberger will be operating. In 2018, the company was awarded a contract by ExxonMobil to drill 30 wells at West Qurna-1 oil field, situated in the southern part of Iraq. The integrated drilling services contract was for a span of 42 months.

It is to be noted that the West Qurna-1 oil field, with its 20 billion barrels of expected recoverable reserves, is among the largest oil fields in the world.

Investors should note that the overall business scenario for Schlumberger’s oilfield services has improved considerably. Notably, the price of crude oil has improved drastically from the pandemic-led low mark, thanks to the rolling out of coronavirus vaccines. With higher oil prices, explorers and producers are gradually returning to the shale plays, thereby boosting demand for oilfield services. Thus, like another oilfield service giants, Halliburton Company (NYSE:HAL) HAL and Baker Hughes Company (NYSE:BKR) BKR, Schlumberger is also poised to capitalize on the rising demand.

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