The exterior of a Schlumberger Corporation building is pictured in West Houston January 16, 2015. REUTERS/Richard Carson/File Photo

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Jan 21 (Reuters) – Schlumberger (SLB.N) beat expectations with a surge in fourth-quarter profit on Friday as higher crude and natural gas prices boosted demand for the world’s largest oil services company. world.

Oil prices jumped about 50% last year and are trading at seven-year highs on a recovery in demand fueled by the COVID-19 vaccine and tight supplies. The global rig count was 1,563 at the end of the fourth quarter, up about 42% from a year ago, according to data from Baker Hughes.

“Absent any further COVID-related disruptions, oil demand is expected to exceed pre-pandemic levels before the end of the year and strengthen further in 2023,” said Schlumberger Chief Executive Olivier. Le Peuch.

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Current market conditions are “strikingly similar to those experienced during the industry’s last supercycle”, he added.

Schlumberger expects capital spending in 2022 to be between $1.9 billion and $2 billion, up from just under $1.7 billion in 2021, and plans to increase spending in North America by at least 20%, Le Peuch said in a call with investors.

Schlumberger shares fell 1.75% as Brent oil futures fell about 1.45% to $87.14 a barrel.

Wall Street analysts said the results were positive except for a decision to keep its dividend stable after the company generated about $1.3 billion in free cash flow for the quarter and $3 billion dollars for the whole of 2021.

“There was an expectation of an increase in the dividend. I think they will increase the dividend once the leverage targets are met,” said James West, senior managing director of Evercore ISI.

Schlumberger’s fourth-quarter adjusted net income came in at $587 million, or 41 cents per share, above Wall Street estimates of 39 cents per share, according to Refinitiv IBES. The company beat last year’s fourth quarter earnings by $309 million, or 22 cents per share.

Fourth-quarter revenue of $6.23 billion also beat analysts’ forecasts of $6.09 billion.

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In North America, strong offshore and onshore drilling activity and increased exploration data licenses for the Gulf of Mexico and the Permian Basin in the United States drove a 13% sequential increase in revenue.

Schlumberger also said it sold $109 million of Liberty Oilfield Services stock during the quarter, increasing its stake to 31%. Last year, it completed the sale of its US fracking business to Liberty in exchange for a 37% equity stake.

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Reporting by Arunima Kumar in Bengaluru; Editing by Amy Caren Daniel, Mark Porter, Paul Simao and Alexander Smith

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