European oil services profits soar on high demand

By Tom Bergin

LONDON (Reuters) - European oil services companies Seadrill (SDRL.OL), AMEC, Hunting, Wellstream and Prosafe all reported big rises in profits on Thursday, as record oil prices drove booming demand from oil producers.

Norwegian oilfield services group Seadrill reported a bigger-than-forecast rise in pretax profit for the second quarter, to $218.6 million (120 million pounds) from $55.1 million a year earlier and said it expected earnings to grow strongly in coming quarters.

Engineer AMEC (AMEC.L) said net profits rose 30 percent in the first six months of the year to 67 million pounds, compared with the same period last year, while London-based Hunting's (HTG.L) net profit rose 45 percent to 34 million pounds.

UK-listed pipe maker Wellstream Holdings (WSML.L) reported a 501 percent jump in first-half pretax profit to 40.8 million pounds, as its UK and Brazil markets raised usage and capacity.

Norwegian offshore support services and rig provider Prosafe (PRSO.OL) reported a bigger-than-expected 69 percent rise in first-half operating profit to $105 million.

Oil services companies are benefiting from a boom in exploration activity and a ramp-up of spending on developing previously discovered reserves to take advantage of record oil prices, which peaked above $147/barrel in July.

Also, as fields are depleted, more work is needed to prolong output at producing reservoirs, and companies are forced to search for new oil and gas fields in ever more remote basins that require deeper wells and more complex equipment.

"Oil and gas reservoirs around the world are displaying higher decline rates, and with increasing emphasis on maximising resource recovery rates, the industry is facing a new world in terms of service intensity and technology requirements," Hunting said in a statement.