The oilfield services industry is on the verge of experiencing a “strong multi-year upcycle,” Schlumberger chief executive officer Olivier Le Peuch said during the company’s fourth-quarter 2021 earnings call on Friday.

Le Peuch said a combination of demand growth that should surpass the pre-Covid peak, tight supplies and declining inventories have already led to an increase in planned capital spending by producers in 2022.

“Looking ahead, we have increased confidence in our view of robust, multi-year market growth,” he said.

Le Peuch indicated that he believes North American shale oil plays will be one of the areas that sees the first strong increase in activity, saying that “2022 will be a period of stronger short-cycle activity resurgence”.

If oil demand continues to rise through 2023 as expected, he said, longer-cycle projects will likely receive additional funding.

“This demand-led capital spending growth sets the foundation for a strong multi-year upcycle,” Le Peuch said. “Indeed, this scenario has already been established as the number of final investment decisions increase, service pricing has begun to improve and multi-year long cycle capacity expansion plans are started, particularly internationally and offshore as seen during the last quarter.”

The Schlumberger executive laid out strong expectations for capital spending in 2022, saying the company believes spending will increase by “at least” 20% in North America.

Those increases, Le Peuch said, will cover both onshore and offshore segments. Internationally, Schlumberger is anticipating a spending increase in “the low to mid-teens” after a strong second half of 2021.

“All area and operating environments — short and long cycle, including deep water — are expected to post strong growth, with upside potential as omicron disruptions dissipate as the year advances,” he said.

“In this scenario, increased activity and pricing will drive simultaneous double-digit growth, both internationally and in North America that will lead our overall 2022 revenue growth to reach mid-teens.”

For the fourth quarter, Schlumberger reported net income of $601 million, or 42 cents per diluted share. That was up 9% from the third quarter and 61% over the fourth quarter of 2020.