Halliburton looking beyond U.S. shale oil as fracking remains unprofitable

The pandemic has soured the outlook on the U.S. shale oil industry, but there's evidence it was running out of steam already, if energy giant Halliburton is any indication.

"Way back in January (it’s been a long year) Halliburton was already souring on shale. Way before the novel coronavirus put the final nail in the coffin of the West Texas shale revolution, the multinational corporation and one of the largest oil field service companies in the world had very publicly been going through a rough patch with shale oil," Haley Zaremba reports for Oil Price. "January 2020 marked the posting of Halliburon’s third straight quarterly loss during the national shale slump that also caused the corporation to take a $2.2 billion charge to its earnings. As a result of this massive shale slump, Halliburton laid off a whopping eight percent of its North American staff in the middle of last year, before dismissing even more employees in the Western U.S."

Bloomberg reported this week that Halliburton "is looking away from its traditional North American heartland for sales growth as the fracking behemoth works its way through an historic oil bust." Though U.S. shale was once a major income source for the company, Halliburton suggested to investors that it may limit or eliminate U.S. shale. That a company the size of Halliburton is moving away from U.S. shale entirely "could certainly be seen as a harbinger of doom," Zaremba reports.

Because U.S. shale prices have recovered somewhat, some other drillers are reopening and creating more wells, but that may not be enough to pay down the coming debt for companies that were only able to meet growing demand through heavy borrowing, Zaremba reports.