Oilfield services provider Baker Hughes Inc. (NYSE: BHI), which is being acquired by General Electric Co., indicated that higher shale drilling in North America would lead an industry recovery, while international demand would stay subdued.

Baker Hughes, which will be the world’s No. 2 services firm after its merger, said drilling activity and pricing pressure outside North America would decline, echoing comments made by rivals Halliburton Co. (NYSE: HAL) and market leader Schlumberger (NYSE: SLB) .

Baker Hughes, on Jan. 26, also reported a bigger-than-expected fourth-quarter loss as prices remained weak both in North America and overseas, and the company warned any improvements would stay limited as the market was oversupplied.

The company said it expected revenue from its onshore business in North America to increase in the first half of the year.

Halliburton, which will likely cede its No. 2 position to the merged Baker Hughes, said on Jan. 23 that its revenue growth this year would meet or outpace the increase in the number of drilling rigs in North America.

Higher oil prices are encouraging oil producers to put more rigs back to work in low-cost shale fields such as the Permian Basin in Texas.

However, producers are still reluctant to increase spending on expensive deepwater and mature oilfields outside North America.

Baker Hughes said it expects the decline in activity in offshore fields, particularly in deepwater fields, to be more severe.

Net loss attributable to Baker Hughes was $417 million, or 98 cents per share, in the quarter ended Dec. 31, compared with a loss of $1.03 billion, or $2.35 per share, a year earlier.

The latest quarter includes after-tax charges of $291 million, while it booked a $1.25 billion impairment charge in the year-ago period.

Excluding such items, the company reported a loss 30 cents per share, much bigger than analysts' average estimate of a 11 cents loss, according to Thomson Reuters I/B/E/S.

Baker Hughes' revenue fell about 29% to $2.41 billion, beating analysts’ average estimate of $2.37 billion.

GE said last week that revenue in its oil and gas business, which sells products for exploration and production, fell 22% in the latest quarter due to weak market conditions.