Schlumberger’s $12bn deal to buy fellow oil services company Smith International, announced on Sunday night and discussed by Andrew Gould, Schlumberger’s CEO, on Monday, looks like a turning point.
From now on, the cost of oil services seems more likely to rise than fall.
Here’s a story that’s currently topping the minds of most energy traders in Europe, via Bloomberg:
Feb. 22 (Bloomberg) — Total SA unions called for a refinery strike to spread to all French plants and said fuel shortages could be imminent. “The strike will be intensified and extended to all refineries,” Charles Foulard, a representative of the Confederation Generale du Travail union, said late yesterday after talks with Total management on ending the six-day walkout broke down without an agreement. He warned the labor disruption will create fuel shortages in France this week.
He advised motorists to fill up their cars now. Workers at Total’s six French oil-processing plants and six of its 31 storage depots have been on strike since Feb. 16 to protest against the permanent shutdown of refining at its Flanders plant in northern France. The walkout by workers last week brought the company’s refineries to minimum output, and they said they were moving toward shutting down all crude- processing operations at the plants. Total confirmed this process has started.
It’s a serious matter because something like 1.1m barrels of refinery throughput could end being affected, which means French motorists might not be the only ones to feel the impact.