SLB
#Sorry, I couldn't hear you.
What was going to be up.
I think it's too early to say.
I would say, as a starting point, I would say probably not, maybe somewhat in line.
But I think it's going to depend on the opportunities that we have in front of us.
Obviously, there is a broad range of discussions.
I think for the right opportunities, I am prepared to invest more into it, but I think we will have to do that on a case-by-case basis.
Well, it's a bit early to say.
We are still in Q3.
The absolute E&P investment numbers for next year, I think it's still early to comment on absolute numbers.
I can give you some direction I think in terms of where we see the trends going and what the absolute number is going to be is going to be more a function of how the numerics of these trends play out.
But we do expect, on a full-year basis, solid year-over-year growth in North America land, Russia and the Middle East.
These are fairly predictable plans that we have in place.
We also expect to see modest growth from the current levels, not necessarily on the full-year basis, but from current levels in Europe/Africa and Latin America and the reason for this is that there are many significant oil-producing countries in these two regions, which have record low investment levels at this stage.
And we see signs that at least we are going to come off the bottom here.
Whether that is going to translate into year-over-year growth is too early to say, but at least an increase from where we are today.
And really the only place where we don't see any of these recovery signs as of yet is in Asia.
So all depending on what the various numbers are on the three main trends pan out to be, there's a chance that revenue could be up.
Obviously that's what we are hoping for and that's what we are going to work towards.
And obviously market share and some of the other things that we are working on specifically around the land rig introduction, around SPM and some of the early production facility work that we do, we have opportunities I would say to come in with higher revenue in 2017, but I'm not going to commit to this as of yet.
I think we need to work out the details of the plans over the coming two, three months and we can give you a further update in January.
Well, so I would say that generally we are on track with both the engineering and the manufacturing of the Rig of the Future.
So these two rigs are, I would call them pilots, pilot versions.
They don't have all the features of the Rig of the Future, but they have a significant part of it.
And we are also going to be operating them around the overall software platform of how we want to do Rig of the Future going forward.
So they are manufactured in the US and that's why we would like to basically put them out in operation close to home at this stage to make sure that we can get all the support and all the feedback from their operational performance and feed that into both the engineering and manufacturing work that is going on for, I would say, the complete version of the rig, which is going to be rolled out, a number of them, in 2017.
That's already in the plans for both the CapEx and the manufacturing for next year.
<UNK>, do you want to comment.
Okay.
I'm going to take this question.
As we always said that the utilization of cash, the priority will be for the growth of the business.
As you know, we ended the quarter with about $11 billion of cash on the balance sheet and today, we are weighing our growth opportunities compared to return of capital to shareholders through buybacks.
Our investments, the three elements of the CapEx, which remain to be very well tightly controlled, we are investing today almost 50% what we used to be at the height of the business and SPM and multi-client.
So there is no other opportunities other than our inorganic growth if it proves to be a viable proposition economically and the future of the business.
But, right now, our priority is the growth of the business and other than that, we will return it to shareholders.
No, I don't think there is yet a big turnaround, I would say, in the exploration market, or in the seismic market, but I think we have positioned ourselves very well in both of those markets.
Whatever work there is I think we are able to generally pick up on the exploration side.
And I think on seismic, as I again said in July, the performance of <UNK>ernGeco in a very, very tough market is quite commendable.
We do quite well on both marine and land and we have been quite opportunistic on the multi-client side to make a significant investment in several basins around the world, in particular Mexico, but also Gulf of Mexico, the US part, as well as overseas.
And obviously, at this stage, we are able to generate revenue and profits from these investments, which you see very clearly in our results.
So there's no, I would say, significant market turnaround, but I think it's a strong performance from the exploration-related businesses that we have, including seismic, and also within the testing services product line, which sits in Reservoir Characterization, we have won a series of early production facility projects where we have combined the capabilities that we had within the testing services prior with the processing capabilities that Cameron had.
And this is again really strengthening the offering we have in this market and we see that also as a significant growth opportunity within Characterization.
Yes.
I would say, in the international market, we have, I would say, actively pursued market share for the past, I would say, 12 to 18 months I think with reasonable success.
I think if you look at Characterization, Drilling and Production combined, take away Cameron, we have pretty solid revenue evolution in all three international operating areas in the third quarter and I'm quite pleased to see the progress we have made there.
Whenever you start aiming to increase your tender win rate, which we now have been focusing on for a good 18 months or so, it takes a bit of time before that translates into actual revenue, but you are starting to see some impact of that.
So there's really no main shift internationally.
The main thing I was pointing out for North America is that, on the drilling side, we now have a clear path in US land towards profitability based on the technology uptake we are seeing linked to these super laterals and as soon as we can turn a profit, we are very keen to grow market share and we have basically shifted the playbook from holding the fort to going for market share in drilling in US land, but we have not yet done that for fracking because, at this stage, it is highly dilutive to our earnings and at this stage also, we are not seeing a clear path toward profitability.
Yes, I think I share your view of the potential of the market and I also think we are pretty much close to the bottom of it.
We have seen a significant reduction in Pemex activity over the past couple of years and while this whole industry reform has been taking place, that reduction has not been, I would say, compensated by additional investments from the emerging international players.
But as these bid grounds for acreage now has progressed and with the deepwater round coming up, the first deepwater round coming up now in December, we see drilling activity picking up in 2017.
Again, it might not be a dramatic comeback and we won't be back to, I would say, 2013 levels or 2014 levels anytime soon, but I think there is a momentum shift coming in Mexico.
It's partly linked to the seismic work that we are doing and the related exploration activity with that, but I think also activity linked to the previous rounds that we've seen both in shallow water and on land, as well as the basic Pemex activity should pick up in 2017.
Yes.
So, first of all, when you are in a cyclical business, you will have to be pragmatic when you are near or at bottom of the cycle, which we are and we are basically maintaining our presence pretty much everywhere in the world at this stage, even at bottom and even though we have a number of contracts, which, at this stage, does not meet our medium to long-term return criteria.
But what we are saying though is that, as we now are starting to come off bottom as oil prices are starting to move upwards, then we will need to have these discussions with the customers where we have these type of contracts and try to find a way where we can get pricing and terms and conditions and a work scope that will enable us to meet those financial return criteria at the same time as our customers can also meet theirs.
So I think these are the discussions that now are taking place.
This won't be resolved overnight, but we are very clear on the fact that if we are to deploy capacity investments and expertise, there has to be a return in it.
And at the bottom, we are willing to compromise, but as we come off bottom, we need to basically restore the return expectations that we have as a Company and as our shareholders have in order to drive the business forward.
Yes.
Let me ---+ it's a good question and it's a market that's in a state of change right now, but let me just talk about deepwater in general.
It's continued to be challenged and in this quarter, we saw five additional rigs get stacked during Q3 and deepwater rig utilization dropped to 55% in the month of September.
So expect 2016 deepwater drilling activity as a whole to be down 33%.
And when we think about that for OneSubsea and projects as we go forward, we think this year tree awards is significantly under 100 and when we look at our project list, we are tracking anywhere between five and eight awards that could happen in 2017 and those would be the larger style awards that we've seen traditionally.
But our focus really now has shifted to the tieback market and we do see a lot of opportunities on that.
I mentioned our eight paid FEED studies with Subsea 7 where we are doing a lot of work on the tieback side.
And what we think there is that with a standardized Subsea tree, which is at a significantly reduced cost, a single-well boosting system, which we are the only ones right now that have that single-well boosting system, and then combine that with our unified control system and the installation from Subsea 7, we think we've got a very economical package to tie back one and two wells in the existing host facility.
So we are in a lot of discussions around that and really it's almost creating a market right now and so we hope that we can get some more excitement and more awards around that as we transition into 2017.
And then as these big projects progress and move forward, we are offsetting that with this expanded tieback market.
Yes.
So I think based on what we are focusing on, from a transformation standpoint, we still have a long runway to go in terms of driving asset utilization for the existing asset base.
And also what we have going in our engineering programs as well to also engineer and manufacture less expensive assets is also a key part of it.
So both utilization and the cost per asset I think should lead to a lighter capital intensity of our business going forward.
I think you've seen the signs of it in the past two, three years and we are going to continue to work very hard on further improving on that.
