Last quarter, I wrote the following with regards to the fate of uber-oilfield supplier National Oilwell Varco's (NYSE:NOV) backlog:

"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."

If, indeed. That target is now looking iffy after the first quarter, which saw only $240 million in rig technology orders. With a book-to-bill ratio of just 0.14, the company's backlog tumbled 13% sequentially, to $9.6 billion.

What could we expect, with oil majors like ConocoPhillips (NYSE:COP) cutting capital spending by 18% this year? I'm not sure, but Mr. Market was clearly perturbed by the pullback, paring his daily estimate of NOV's value by about 11%.

The good news for National Oilwell Varco is that $9.6 billion is still a lot of money. The bad news is that the firm expects $5.5 billion of revenue to come out of backlog this year, which could deflate that cushion pretty quickly if orders don't start to flow again sometime soon. Like shipyard sultan Keppel and driller Transocean (NYSE:RIG), NOV's eyes are expectantly turned toward Brazil, which holds out more promise of big-ticket rig demand than anywhere else in the world.

A slowdown in new orders is the primary issue here, but cancellations are a concern as well. $32 million worth of orders were lost this quarter, and the "at-risk" category has ticked up to $380 million. These shoddily financed customers are a nuisance, but not the core driver of NOV's business.

Aside from perhaps ExxonMobil (NYSE:XOM), which has ice in its veins when it comes to volatility, I think operators around the world have been just plain spooked by developments in the global economy. While low prices will keep spending subdued for some time, concessions being squeezed out of suppliers like Weatherford (NYSE:WFT) and Smith International (NYSE:SII) can help project economics quite a bit. With new cost estimates hammered out, I think the big boys will be ready to play ball.

In short, as long as the AIGs of the world are able to pull back from the abyss, I think this big rig business can get back to something approximating normal.

Further Foolishness:

  • Here's another service stalwart feeling the sting.
  • ExxonMobil's landing some very high praise in these parts.
  • Have a multiyear horizon? Then climb on for the ride.

National Oilwell Varco is a Motley Fool Stock Advisor selection, and Petrobras is an Income Investor recommendation. Saddle up with any of our subscriber newsletters free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.