- Schlumberger's (SLB -1.8%) deal to buy oil and gas assets worth $1B from Cenovus Energy (CVE +1.3%) is raising fresh concerns among analysts about SLB's strategy to own more refining and drilling operations directly.
- SLB has poured ~$4.3B since 2012 into buying stakes in oil and gas projects to help diversify from its core services business, but the concern is how much the CVE deal actually diversifies risk, "as acquiring E&P assets implies taking on additional commodity risk, while international projects incur increased country risk,” Barclays (LON:BARC) analysts say.
- “Investors have been asking a lot of questions about [SLB's] strategy, fearing the business adds uncertain risk to the company’s earnings,” says Cowen's Marc Bianchi at Cowen. “As a majority non-op owner, it appears Schlumberger is taking commodity risk on this project."
- Now read: Schlumberger's Gamble Could Change Oilfield Services Forever
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