The world's largest oil driller just gave a very bearish presentation on the future of the industry

The world's largest oil driller is expecting the industry to worsen in the second half of the year.

Schlumberger CEO Paal Kibsgaard gave a presentation at an industry conference Monday, and much of his outlook was very bearish.

He started with the fact that the oil industry is in "the deepest financial crisis on record" that is making it impossible for most oil and gas operators to stay profitable.

And Kibsgaard sees no meaningful improvement in drilling activity until 2017.

Oil prices, even after a rebound in recent weeks, are still down 61% from the pre-crash peak in June 2014.

Here's a highlight of what he said about the future of the industry (emphasis added):

Kibsgaard said the industry is now in the third and worst phase of this crisis:

Kibsgaard also challenged the idea that the oil crash has forced oil-service companies to be more efficient, thereby lowering their costs amid a cash crunch. He said that rather, service companies have had to make concessions to lower costs to attract the few clients left as drilling activity died down.

And he thinks that when drilling picks up again, these cost-saving benefits will be reversed.

Kibsgaard said if non-OPEC production continues to fall, and demand rises - as the International Energy Agency is projecting for this year - oil prices should continue to rally.

Schlumberger now expects first-quarter sales to total $6.5 billion, missing analysts' forecast for $7 billion. Its shares were little changed in early trading.

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