Oil services firm Schlumberger's CEO Paal Kibsgaard is optimistic about increasing the firm's near-term activity in Mexico, but less so for Brazil, he said during Schlumberger's 2Q14 conference call on Friday.

Schlumberger's Latin America revenue fell 3% to US$1.85bn in the second quarter from US$1.91bn in 2Q13. The decrease was caused by lower activity in Mexico and Brazil and partially offset by strong growth in Argentina, Ecuador and Venezuela, according to the firm's 2Q14 financial report.

Budget constraints at Mexican state oil firm Pemex and rig shutdowns due to community unrest are affecting Schlumberger's revenue in the North American nation. "I believe we'll work through the budget constraints and rig shutdowns over the next one to two quarters. So while I expect growth in the second half, I'm still a lot more optimistic about 2015," Kibsgaard said.

"Brazil this year is significantly down. Both due to pricing and significantly lower activity. There might be some uptick in 2015, but I'm not as optimistic on the improvement in Brazil as I am in Mexico," he added.

Kibsgaard expects some near-term growth in activity in Brazil related to the nation's Round 11 oil and gas licenses and increased activity from state oil firm Petrobras. However, Schlumberger will not see much change in its pricing due to Brazil's competitive drill contracting scenario.

Rig-based activity at the Vaca Muerta shale formation increased Schlumberger's Argentina revenue in 2Q14.

The firm's largest quarter-on-quarter Latin America revenue increase was in Venezuela, based on a renewed payment agreement with Venezuelan state oil firm PDVSA. Also in 2Q14, Schlumberger signed a letter of intent regarding group one of Ecuador's mature fields tender. The firm expects to sign contracts and ramp up operations in Ecuador's mature fields during the second half of this year, Kibsgaard said.

Schlumberger's companywide second quarter attributable net income dropped to US$1.62bn from US$2.1bn in 2Q13. Revenue rose to US$12.1bn from US$11.2bn, while cost of revenue grew to US$9.27bn from US$8.71bn, according to the financial report.

The firm's global outlook is cautious, combining a US recovery from an unusually harsh winter and stabilizing Chinese economic growth with weak Eurozone growth and a dim Brazil growth forecast, the firm said.