The hell?

One of SLB’s core precepts is was it would not take equity stakes in clients’ reserves.  The old guard at SLB thought it might be a bad idea to compete against their customers.   Novel thought, right?  Well the new crew led by one-year CEO Paal Kibsgaard decided those OGs didn’t know what the fuck they were doing.  I don’t know if this has anything to do with the resignation of the former COO two weeks ago or not, but the timing is suspicious.

Apparently Paal and his crew rolled up to FST and offered them a drilling carry on some of their Eagle Ford acreage.  Since this was such a complete 180 from previous company policy it was brought up in last month’s earnings call.  Paal said it was the only way to make the deal work so they went with it; but they won’t do it again (ha ha ha ha ha).  In other words, FST didn’t have the cash to pay for SLB’s services but SLB was hell bent on doing the deal.  Hmmmmmmm.

Now we shift focus to what is going on down in Venezuela.  Last Q all the big service companies suffered impairments due to the devaluation of Venezuela’s currency.  Shit happens, this is not a big surprise.  It’s not the first time it’s happened nor will it be the last.  Call it a cost of business for working down there.

No, the interesting part comes from yesterday’s announcement (http://on.wsj.com/10ZABHN) that SLB has extended PDVSA (the Venezuela state run oil company) a $1 billion revolving credit facility.  Are you fucking shitting me?  Companies aren’t sure they are going to get paid by these deadbeats and Paal decides to float a $1 billion revolver their way.

Has SLB become the sub-prime lender in the oil patch?

[youtube:http://www.youtube.com/watch?v=SKfTTGnWnKA 450 300]

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