North African unrest weighs on Halliburton

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Halliburton, the world’s second-largest oil services company, reported a $105m hit to international revenue from political unrest and other disruptions in north Africa throughout the first quarter of 2011.

However, an uptick in oil-focused US onshore drilling activity led the company to a 148 per cent rise in net income.

Net income was $557m, or 61 cents per share, excluding a Libya charge of $46m, after tax, related primarily to reserving certain assets as a result of recent political sanctions.

That charge – based on money that might not be paid and inventories that may have been “compromised” because of the unrest – did not include the operating losses in Libya during the first quarter.

This left reported net income for the first quarter of 2011 at $511m, or 56 cents per share, compared with $206m, or 23 cents per share for the same quarter last year.

”Operating income was significantly impacted by geopolitical events in north Africa, delays in Iraq and typical seasonality,’’ said Dave Lesar, Halliburton’s chief executive.

Nonetheless, North American operations delivered a strong performance, boosting consolidated revenue in the first quarter of 2011 to $5.3bn, up from $3.8bn in the first quarter of 2010.

These increases were due to a rise in US onshore activity, where the shift to unconventional oil and liquids-rich basins more than offset geopolitical issues in north Africa and the effects of the slowdown in activity in the deepwater Gulf of Mexico.

Halliburton’s shares rose 1.5 per cent to $48.62 in early morning trade.

“In north Africa, we expect that Libya will continue to be challenged, while Egypt appears to be returning to prior activity levels,’’ said Mr Lesar.

“In Iraq, our delayed integrated drilling projects are now scheduled to begin in the second or third quarter of this year. We remain very optimistic about this market and expect to be profitable in 2011.’’

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