Schlumberger, oilfield services provider, announced it would be reducing its services because of the low amount of cash in the country. Also affected is Venezuela’s state oil company, PDVSA, which has accumulated billions in unpaid bills, many of which are owed to Schlumberger.
According to this article from Fortune, Schlumberger plans to decrease services within the month. PDVSA stated that work will be distributed more evenly to companies who provide similar services. They don’t see a way of raising profits until the OPEC crisis with the low oil market ends.
We asked expert David Osio for his opinion, who feels that not only is the oil business feeling the effect of the cash-flow issue, but Mr. Osio believes the economy worldwide is taking a toll. Due to Venezuela’s plummeting currency, U.S. companies have decreased their own services in the country.
In 2013, Schlumberger had given PDVSA a $1 billion credit line so they could continue services. Nonetheless, over the next couple years, PDVSA still took millions in losses because of the lowered currency.