It had to happen eventually. National Oilwell Varco (NYSE:NOV) has reported its first decline in backlog since National Oilwell and Varco got hitched back in early 2005.

Oh cheer up, roughneck. The oilfield equipment giant's backlog, at a touch over $11 billion, is still the second-highest in its history. The fun thing about a backlog is that it keeps business humming while the industry takes a nosedive.

NOV forecasts this year's revenue out of backlog to total about $5.2 billion, which is comparable to 2008. If big customers like Petrobras (NYSE:PBR) maintain their deepwater determination, NOV thinks it can pull in $3 billion to $4 billion worth of new orders in 2009. That would be about half what was secured in a scorching 2008, and would take the firm into 2010 with about $9 billion in backlog. Basically, there's no implosion going on here.

That's not to say NOV is immune to the credit market and commodities meltdowns. Some order cancellations ($95 million worth) have resulted from payment defaults, while another $364 million is characterized as "at-risk." This includes five offshore rigs on which work has been suspended while the customers fumble around for financing. 

Importantly, NOV remains "cash ahead" on these projects -- meaning that collections from customers exceed costs incurred in the construction process. We noted this attractive financing feature back in October, when jitters first started surfacing.

NOV's situation is somewhat comparable to that of offshore drillers like Transocean (NYSE:RIG) and Diamond Offshore (NYSE:DO). Overleveraged customers are running into problems, but in neither case do they constitute a significant piece of the revenue pie. As long as national oil companies like Saudi Aramco and supermajors like ExxonMobil (NYSE:XOM) and StatoilHydro (NYSE:STO) remain on solid footing, so too should these key suppliers.

Further, NOV is in a pretty attractive position as not merely a builder, but as a servicer and a refurbisher, as well. The world's aging rig fleet still requires upgrading, so even if clients ease up on newbuild orders, they'll still need to perform major upgrades on existing rigs. As always, NOV stands ready to keep rigging up returns.

National Oilwell Varco is a Motley Fool Stock Advisor selection. Petrobras and StatoilHydro are Income Investor recommendations. You're welcome to plumb the depths of any of our Foolish newsletters free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool's disclosure policy is in no need of refurbishment.