The US shale oil industry may have forever abandoned its heavy-spending ways in the face of sliding crude prices, Schlumberger, the world’s No1 oilfield services provider, said.

Spending cuts already announced by producers - to the tune of 25 to 60 per cent - have dropped the rig count by 45 per cent since late 2014, and output will soon decline or flatten out so prices can recover, Schlumberger chief executive Paal Kibsgaard said.

US oil prices have fallen by 50 per cent since June to below $50 per barrel as growing supplies of tight oil from shale and oil sands in North America overwhelm weak global demand. The Organization of the Petroleum Exporting Countries (Opec) has refrained from cutting output to lift prices, a move Kibsgaard said may be part of an effort to test the resilience of higher cost producers.

At the time of $100 oil, some highly-leveraged US players were known for their intensive capex budgets. That has changed.

'Going forward, we believe financial prudence, where investments are limited to the cash flow generated by production, will be the new normal for US tight-oil developments,' he said at the Scotia Howard Weil Energy conference in New Orleans.

Outside of North America, Schlumberger expects the oil and gas industry’s international spending on exploration and production to drop by 10 to 15 per cent in 2015, continuing a trend seen last year.

He said this is related to a 'sharp reduction' in deepwater exploration activity that could delay the sanctioning of new developments, adding that the company is seeing lower activity and pricing pressure in the Gulf of Mexico.

That means, he said, 'the global oil market is clearly heading for a tightening ... in the second half of this year.'

The rebalancing would come in part from less supply but also stronger demand in a market currently oversupplied by about 1 million barrels per day (mbpd).

Schlumberger, which has seen its share price fall by about a third since July, would be positioned to take advantage of any uptick in demand for its range of oilfield services, from drilling to fracking, Kibsgaard said.

He emphasized that Schlumberger has been generating more free cashflow than its two main competitors, Halliburton and Baker Hughes, which are in the process of merging.