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UPDATE 3-Schlumberger names new CEO as North American business faces softer demand

demand@ (Adds details from conference call, context)

July 19 (Reuters) - Schlumberger NV said on Friday Chief Operating Officer Olivier Le Peuch will replace its chief executive, Paal Kibsgaard, as the company looks to shore up its position as a leader in drilling technology.

The world's largest oilfield services provider also reported higher-than-expected quarterly revenue, as demand in international markets countered weakness in North America.

Its second quarter earnings were in line with analysts' expectations, but shares were down 2.4 percent at $37.85 in early trading amid underwhelming margins and soft demand for services in North America.

"North America remains a challenging environment," Le Peuch told investors during the company's quarterly conference call, pointing to softer pricing and an oversupply of equipment, particularly in hydraulic fracturing.

International revenue rose 8% to $5.46 billion in the second quarter, while it fell 11% to $2.8 billion in North America.

"We can imagine modest softening of third quarter 2019 outlook for drilling margins," Brad Handler, an analysts for Jefferies wrote in a note on Friday.

The management shakeup comes as the oilfield services industry has been hit by weaker demand from oil producers, which have cut spending to satisfy investors seeking higher returns. Efficiency gains are also enabling companies to extract more oil with fewer resources.

A veteran who has been with the company for more than three decades, Le Peuch, 55, in February was named chief operating officer, a role Kibsgaard, 52, held before his elevation to the top role in August 2011.

Mark Papa, an investor who built independent EOG Resources into one of the most profitable U.S. shale companies, will become non-executive chairman, replacing Kibsgaard, the company also said.

Schlumberger has benefited from an uptick in activity in international markets since 2018 after a prolonged slump in oil prices, but its earnings have also been hampered by softer demand for some services in North America.

Under Le Peuch, the company will continue to move away from some capital intensive businesses, such as its Schlumberger Production Management (SPM) unit. It is focused on monetizing SPM investments in Canada and Argentina, executives said, and also is in the process of divesting three other business that will generate proceeds of around $1 billion.

Net income rose about 14% to $492 million in the second quarter.

Excluding items, the company earned 35 cents per share, in line with analysts' estimate, according to IBES estimates from Refinitiv.

The Houston-based company reported revenue of $8.27 billion, beating estimates of $8.11 billion. (Reporting by Nishara Karuvalli Pathikkal and Arathy S Nair in Bengaluru; Liz Hampton in Denver Editing by Sriraj Kalluvila and Steve Orlofsky)