Following the release of Halliburton’s annual report and Q4 2020 results;

Effuah Alleyne, Senior Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers her view:

“While Halliburton ended 2020 with revenues down by 36% when compared to 2019, of note is a balance shift of regional contributions. The North American market has steadily contracted to just 40% of Halliburton revenue in 2020, where it contributed 60% in 2018.

“No doubt that the COVID-19 pandemic has had crippling effects globally, but it has really stunted North American operations. This has led Halliburton towards a strategy of aggressively streamlining its North America operations by lowering structural headcount and real estate footprint by 50%, alongside reducing year-over-year maintenance costs by 30% in 2020 – all with seemingly incremental impact.

“Conversely, service companies such as Halliburton that have regional diversity in their portfolio have been able to benefit from spreading the risk over multiple global markets. According to GlobalData, Europe and Asia accounted for two thirds by count of contracts in 2020. Halliburton’s five-point strategy will continue to foster growth internationally through Halliburton 4.0, a platform providing innovative solutions in technology and digital offerings for maximizing performance.

“Although Halliburton’s strategy has seen it through the worst of 2020, the road to improved margins is still uphill. Halliburton completed a US$1 billion public debt offering in 2020 and has been marketing its pipeline and processing service for sale since Q4 2019, emphasizing the need for cash flow sources in an unforgiving market.”