Venezuela is "back on the agenda" for oil equipment supplier SBO (SBOE.VI), its chief executive said on Thursday, after the Austrian company received an order to deploy its precision technology for a customer in the South American country.
Venezuela has signed agreements for several oil and gas projects, with large foreign companies such as Shell (SHEL.L) having taken early advantage to invest in the country's energy resources following the U.S. capture of President Nicolas Maduro in January.
"There is a lot of technology upgrade that needs to happen, but I see this as not as a short-term, but as a medium- and long-term environment," Klaus Mader told Reuters in a post-earnings interview.
Mader said companies investing in Venezuela were seeking security guarantees, and that SBO did not intend to open a facility in Venezuela as it already has a close-by presence in Mexico and Houston, Texas.
Asked about the Middle East, where SBO operates three facilities and generates 15% of its turnover, Mader said he expected customers to delay investments rather than cancel orders. SBO is still holding an order for Iraq in its inventory, which was scheduled for March, he added.
"The Middle East conflict, different from an oil major who is in the refinery business and is happy with the oil price of north of $100, this is not good for the business of SBO," Mader said.
The company's core earnings slumped by nearly a half in the first half of the year due to disruptions caused by the war.
