Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Bill Herbert – Simmons & Company International.
Bill Herbert – Simmons & Company International
Dave, you mentioned that you were more confident with respect to the international markets and you provided some commentary along those lines but you also mentioned that you were seeing continued reticence on part of the IOCs with regard to prosecuting spending increases due to a lack of confidence, demand, so forth and so on. How is your increased confidence internationally manifesting itself with respect to your international business?
David J. Lesar
I think Bill in a couple of ways, one if you look at commodity prices have bounced around a little bit in Q3 but it now seems to be settling sort of in the $70 to $80 range. Part of it is just due to a lot of the discussions that I’ve had with our customers in the international market place about their spending plans and the fact that some major projects like the Gorgon project and several of those have now been sanctioned and are going forward. I think as one IOCs sees other IOCs stake big projects forward, then I think that just tends to build on itself. So, I think it’s really been more based on discussions and my confidence level is therefore increased that this is not going to be maybe as hard a downturn as we thought or I thought a quarter or so ago.
Bill Herbert – Simmons & Company International
Secondly, with respect to the follow up, if you could provide just some brief commentary and outlook and insight with regard to two markets, Mexico especially Chicontepec as well as Iraq.
David J. Lesar
Let me handle Iraq first, actually I was recently in Bagdad and there’s clearly a lot of activity, a lot of people are going in and out of there. It certainly is a market that has a lot of reserve base that will support I think a large and diversified oil services industry going forward. I think it’s also going to be a market that really sort of calls for every type of philosophy of service work from an integrated packaging drilling market to traditional services to maybe even some risk taking. I think there’s really going to be some room for all of that in there.
That being said, there’s really not a lot going on in there other than people looking at building some infrastructure. We are in the process of staffing up in Iraq, we are moving equipment in but I really don’t see that we will have a significant revenue stream out of there certainly for several years. We will have revenue, we’ll have revenue this year, we’ll have more revenue next year but it’s not really going to be meaningful I don’t think for a couple of years but clearly it is a big prize out there for oil services. I think you see everybody trying to establish a base there and we’re no exception. Clearly, a great future there and one we will participate in, in a big way.
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