NOV Warns Virus Fallout Could Hit Supply Chain

By Liz Hampton
Friday, February 7, 2020

U.S. oilfield equipment supplier National Oilwell Varco on Friday called the coronavirus a "wildcard" in the oil industry's outlook, with an extended outbreak potentially hurting access to Chinese-make materials and foreign sales.

The Houston-based company said further shutdowns at its Chinese suppliers could limit its production of certain products such as fiberglass resins and drilling pipe.

For now, National Oilwell has the latitude to make up lost ground, executives added, noting it has a diversified supply chain.

"[There is] still a lot of uncertainty related to the extent to which this will impact operations," Jose Bayardo, chief finance officer, said on an earnings call with investors.

China also is a growing market for its products, he said.

Chief Executive Clay Williams added that he was equally concerned about the virus' impact on global oil demand, which could affect its oil and gas customers. National Oilwell is one of the largest suppliers of oil drilling equipment.

An outbreak of the coronavirus in China has roiled commodity markets in recent weeks. The Organization of the Petroleum Exporting Countries and its allies are weighing additional output cuts as demand for crude oil falls.

U.S. crude futures were trading around $50.46 a barrel on Friday, on track for their fifth consecutive weekly decline.

Shares of National Oilwell were up 11% on Friday afternoon after it beat analysts forecasts for quarterly earnings.

"National Oilwell Varco has done a masterful job of controlling what it can control," analysts for Tudor, Pickering, Holt & Co wrote in a note on Friday, pointing to cost savings and working capital efficiencies.


(Reporting by Liz Hampton; Editing by Steve Orlofsky)

Categories: Technology Hardware Drilling Hardware

Related Stories

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

China Rolls Out 17MW Floating Wind Turbine Prototype

Four Jack-Up Drilling Rig Deals Set to Bring In $129M for Borr Drilling

Wood JV Gets EPC Job for Shell off Brunei

MODEC, Carbon Clean to Advance FPSO-Mounted Carbon Capture Tech

Fugro Lands Deepwater Gas Field Job in Southeast Asia

BW Opal FPSO Vessel set for Work off Australia

Current News

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

Sapura Energy Rebrands to Vantris Energy

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com