SLB is gaining business in Russia as its rivals retreat after invading Ukraine.

While SLB’s continued commitment to Russia has drawn heavy criticism, interviews with two people familiar with the company and industry sources, as well as company documents reviewed by Reuters, show that SLB’s plans to help Russia increase oil and gas production through drilling services and equipment the decision paid off.

For example, in the third quarter of 2022, SLB’s reservoir performance division in Russia and Central Asia increased its revenue by 25% compared to the previous quarter. That beat growth of 12% and 11% for the Asia and Middle East and North Africa regions, respectively, according to one of six documents seen by Reuters.

The company also plans to report record fourth-quarter results for its Russian tank performance division, according to a separate filing by Reuters.

SLB, which changed its name to Schlumberger last October, did not respond to multiple requests for an interview or written questions for this story. The company said in March that it has stopped new investments there, although it continues to operate in Russia.

SLB is unlikely to fall under US and EU sanctions banning financial transactions with Russia, as the measures taken against Russia’s energy sector are not aimed at completely reducing oil production.

“Russia’s energy sector is not subject to comprehensive sanctions, and prudent companies may comply with any bans or restrictions that may apply to certain operations,” said Peter Kucik, managing director of Mercury Public Affairs and a former United States official. The State Office of Foreign Assets Control, a division of the Treasury Department that administers sanctions.

The spokesperson of the Ukrainian embassy in Washington said when answering the question about SLB’s operations in Russia: “Trade with Russia is aggression, financing the killing of civilians and the destruction of peaceful cities.”

The Business & Human Rights Resource Center, an international organization that tracks corporate responses to human rights issues, has warned that the company risks being drawn into the war effort by Russia’s military mobilization.

Ella Skybenko, the organization’s senior researcher, said companies operating in Russia should take steps to “reduce the risk of contributing to or being directly linked to armed conflict.” He pointed to SLB’s compliance with Russia’s military mobilization as an example of complicity in the conflict.

SLB did not respond to requests for comment. The Russian Energy Minister and the Russian Embassy in Washington did not respond to requests for comment.

In the months since Russia’s invasion of Ukraine, dozens of Western companies have closed or sold their operations there to avoid sanctions or the appearance of helping Vladimir Putin’s war. Others have suspended their investments or operations, and some have remained in Russia.


In contrast, SLB added about 70 employees in Russia by the end of 2022, including for its key accounts such as Gazprom and Rosneft, two people familiar with the matter said, a sign that it has no business there. slow down

The Curacao-registered company is a major foreign employer in Russia, with about 10,000 employees, or about 10% of its global workforce, split between Russia and neighboring Kazakhstan, where it is also seeing sales growth.

Russia accounted for 6% of SLB’s total revenue, or $1.21 billion, in the first nine months of last year, according to regulatory filings. According to sources and company documents, activities in this country are expected to intensify this summer.

One of the reasons for SLB’s new success in Russia is that its competitors have left the region. Halliburton Co and Baker Hughes Co sold their businesses in recent months. The companies did not disclose the reason for the sale.

SLB’s regional unit, which covers Russia, saw revenue rise 45% between the first and third quarters of 2022, while a similar unit at Halliburton saw a 6% decline, according to regulatory filings.

Halliburton said in September it was selling the business to a Russian-based board of former Halliburton employees. The company now operates as BurService LLC and is independent of Halliburton.

Baker Hughes and Halliburton declined to comment.

A smaller competitor, Weatherford, remains, but its share of the industry is shrinking as SLB cancels some existing contracts it was able to claw back, a source working in Russia told Reuters. Reuters could not determine how many contracts SLB had won.

SLB is also set to become the exclusive supplier of directional drilling for a major Russian gas project, the source said.

“The message from HQ is basically to take high-margin exclusive contracts,” said an SLB employee involved in the business win. With fewer competitors, SLB was able to secure price increases and better terms, said the source, who was not authorized to speak to the press.

Weatherford declined to comment for this story.


Russia’s production defied forecasts of a sharp decline, rising 2.2% from a year earlier to produce an average of 10.91 million barrels of oil and gas condensate per day in the January-November period last year, Reuters reported last year. Russian media. Countries such as India, China and Pakistan have been buying Russian oil at deeply discounted prices, and production from the Sakhalin-1 project, operated by Exxon Mobil Corp. before being pulled back after the Ukraine invasion, is about to return to full capacity.

SLB is currently the contractor for this Russian Far Eastern mega-project and, according to a recent Reuters filing, expects more business in 2023, including work to produce more natural gas at the Sakhalin-3 project.

In 2014, the company continued to work on the project after the US imposed sanctions on the project’s partner, Rosneft.

SLB has previously violated government sanctions against countries where it does business. In 2015, the SLB unit paid a $237.2 million fine to the US Department of Justice after being found guilty of violating sanctions related to Iran and Sudan. In a 2015 statement, the company said it was “cooperating with the investigation” and “pleased that this matter has finally been resolved.”

In 2021, SLB paid $1.4 million for violations of Ukraine-related sanctions by its subsidiary Cameron International Corp. for providing services to Russian energy company Gazprom-Neft Shelf.

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