Schlumberger Limited (NYSE:SLB) today reported full-year 2009
revenue of $22.70 billion versus $27.16 billion in 2008.
Income from continuing operations attributable to Schlumberger,
excluding charges, was $3.36 billion, representing diluted
earnings-per-share of $2.78 versus $4.50 in 2008. Income from
continuing operations attributable to Schlumberger, including
charges, was $3.16 billion, representing diluted earnings-per-share
of $2.61 versus $4.42 in 2008.
Fourth-Quarter Results
Fourth-quarter revenue was $5.74 billion versus $5.43 billion in
the third quarter of 2009, and $6.87 billion in the fourth quarter
of 2008.
Income from continuing operations attributable to Schlumberger
was $817 million—an increase of 4% sequentially, but 34% lower
year-on-year excluding $93 million of charges in the fourth quarter
of 2008. Diluted earnings-per-share from continuing operations
attributable to Schlumberger was $0.67 versus $0.65 in the previous
quarter, and $1.03 excluding $0.08 of charges in the fourth quarter
of 2008.
Oilfield Services revenue of $5.17 billion was up 4%
sequentially but down 17% year-on-year. Pretax segment operating
income of $1.01 billion was down 3% sequentially and 37%
year-on-year.
WesternGeco revenue of $549 million was up 19% sequentially but
down 8% year-on-year. Pretax segment operating income of $115
million was up 89% sequentially and 30% year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented,
“Fourth-quarter revenue increased sequentially in the North
America, Latin America and Middle East and Asia Areas as offshore
revenue quality improved with increasing deepwater rig count while
software and product sales saw the usual fourth-quarter strength.
Europe/CIS/Africa was flat with the previous quarter as stronger
offshore activity and year-end software and product sales in the
Area were not sufficient to offset the seasonal decline in Russia.
Overall, sequential margins were particularly affected by three
events—a changed revenue mix in Canada; seasonal weakness in
Russia; and reduced activity coupled with a less favorable revenue
mix in the Mexico/Central America GeoMarket. Margins were also
impacted by pricing concessions made earlier in the year.
WesternGeco achieved highly satisfactory fourth-quarter
Multiclient revenues due largely to wide-azimuth survey sales in
the US Gulf of Mexico.
Our outlook for 2010 remains largely dependent on the prospects
for the general economy. At the end of the third quarter, we
indicated that we were encouraged that signs were emerging that
demand for oil and gas would begin to increase. Consensus forecasts
predict that oil demand in 2010 will increase, particularly in the
developing world, for the first time since 2007.
As a result, we feel that oil prices are likely to be sustained
at current levels and that as our customers’ confidence grows,
their exploration and production budgets will increase. We feel
that considerable leverage to increase investment exists in
offshore markets, in Russia, as well as in certain emerging
opportunities such as Iraq. These events will be dependent on
continued increases in economic growth in the second half of the
year beyond the current government stimulus packages.
For natural gas activity we remain a great deal more cautious.
Despite signs of some recovery in industrial demand and the impact
of the recent cold weather, we consider that markets remain
generally oversupplied. Increased flows of LNG—with additional
capacity being added in 2010—as well as the general uncertainty
over the decline rates of unconventional gas production have the
potential to limit the current increase in the North American gas
drilling rig count.
We anticipate that 2010 will be a better year for multiclient
seismic sales and for land seismic activity particularly in Middle
East and North Africa. While marine activity will be reasonably
robust, pricing improvements will be limited due to continued new
capacity additions.
Longer term we remain confident that considerably increased
spending will be necessary to maintain sufficient reserves and
production of hydrocarbons to meet the world’s needs. Our
technology portfolio and worldwide infrastructure mean we are
strongly positioned to capture growth opportunities as our
customers begin to increase their investment.”
Other Event:
During the quarter, Schlumberger repurchased 7.8 million shares
of its common stock at an average price of $63.91, for a total of
$500 million under the repurchase program approved by the Board of
Directors on April 17, 2008.
Consolidated Statement of Income
(Stated in millions, except per share amounts) Fourth
Quarter Twelve Months For Periods Ended December 31
2009 2008
2009 2008
Revenue
$ 5,744 $ 6,868
$ 22,702 $
27,163 Interest and other income, net (1)(2)
62 96
273 402 Expenses Cost of revenue (2)
4,378 5,033
17,395 18,968 Research & engineering
217 222
802 819 Marketing
21 24
88 95 General &
administrative
145 150
535 584 Interest
51 59
221
247 Income from Continuing Operations before
taxes
994 1,476
3,934 6,852 Taxes on income (2)
175 326
770 1,430 Income from Continuing
Operations
819 1,150
3,164 5,422 Income (Loss) from
Discontinued Operations
(22 )
-
(22 ) 38
Net Income
797 1,150
3,142 5,460 Net Income
attributable to the noncontrolling interests
(2 ) -
(8 )
(25 ) Net Income attributable to Schlumberger (2)
$ 795 $ 1,150
$
3,134 $ 5,435 Schlumberger
amounts attributable to: Income from Continuing Operations
$
817 $ 1,150
$ 3,156 $ 5,397 Income (Loss) from
Discontinued Operations
(22 ) -
(22 ) 38 Net Income
$ 795
$ 1,150
$ 3,134 $ 5,435
Diluted Earnings Per Share of Schlumberger: Income from Continuing
Operations
$ 0.67 $ 0.95
$ 2.61 $ 4.42
Income (Loss) from Discontinued Operations
(0.02
) -
(0.02 ) 0.03
Net Income
$ 0.65 $ 0.95
$ 2.59
$ 4.45 Average shares outstanding
1,199
1,195
1,198 1,196 Average shares outstanding assuming
dilution
1,218 1,210
1,214 1,224 Depreciation
& amortization included in expenses (3)
$
628 $ 613
$ 2,476
$ 2,269
1) Includes interest income
of:
Fourth Quarter 2009 - $10 million
(2008 - $25 million)
Twelve months 2009 - $61 million
(2008 - $119 million)
2) See page 7 for details of
charges.
3) Including multiclient seismic
data cost.
Condensed Consolidated Balance Sheet (Stated
in millions)
Dec. 31, Dec. 31, Assets
2009 2008 Current Assets Cash and short-term
investments
$ 4,616 $ 3,692 Other current assets
9,034 9,294
13,650 12,986
Fixed income investments, held to maturity
738 470 Fixed
assets
9,660 9,690 Multiclient seismic data
288 287
Goodwill
5,305 5,189 Other assets
3,824
3,472
$ 33,465
$ 32,094 Liabilities and Equity
Current Liabilities Accounts payable and accrued
liabilities
$ 5,003 $ 5,318 Estimated liability for
taxes on income
878 1,007 Bank loans and current portion of
long-term debt
804 1,598 Convertible debentures
321 -
Dividend payable
253 252
7,259 8,175 Convertible debentures
- 321 Other
long-term debt
4,355 3,372 Postretirement benefits
1,660 2,369 Other liabilities
962
923
14,236 15,160 Equity
19,229 16,934
$
33,465 $ 32,094
Net Debt
“Net Debt” represents gross debt less cash, short-term
investments and fixed income investments, held to maturity.
Management believes that Net Debt provides useful information
regarding the level of Schlumberger indebtedness by reflecting cash
and investments that could be used to repay debt. Details of Net
Debt follow:
(Stated in millions) Twelve Months 2009 Net
Debt, January 1, 2009 $ (1,129 ) Net income 3,142 Depreciation and
amortization 2,476 Pension and other postretirement benefits
expense 308 Non-cash postretirement benefits curtailment charge 136
Excess of equity income over dividends received (103 ) Stock-based
compensation expense 186 Increase in working capital (204 ) Capital
expenditure (2,395 ) Multiclient seismic data capitalized (230 )
Dividends paid (1,006 ) Proceeds from employee stock plans 206
Stock repurchase program (500 ) Business acquisitions (514 )
Pension and other postretirement benefits funding (1,123 ) Other
683 Translation effect on net debt (59 ) Net Debt,
December 31, 2009 $ (126 ) Components of Net Debt
Dec. 31,2009
Dec. 31,2008
Cash and short-term investments $ 4,616 $ 3,692 Fixed income
investments, held to maturity 738 470 Short-term borrowings and
current portion of long-term debt (804 ) (1,598 ) Convertible
debentures (321 ) (321 ) Other long-term debt (4,355 )
(3,372 ) $ (126 ) $ (1,129 )
Business Review
(Stated in millions)
Fourth Quarter Twelve Months 2009 2008 % chg 2009
2008 % chg
Oilfield Services
Revenue $ 5,170 $ 6,256 (17 )% $ 20,518 $ 24,282 (16 )% Pretax
Operating Income $ 1,006 $ 1,599 (37 )% $ 4,326 $ 6,505 (33 )%
WesternGeco
Revenue $ 549 $ 599 (8 )% $ 2,122 $ 2,838 (25 )% Pretax Operating
Income $ 115 $ 88 30 % $ 326 $ 836 (61 )%
Pretax operating income represents the segments’ income before
taxes and noncontrolling interests. The pretax operating income
excludes such items as corporate expenses and interest income and
interest expense not allocated to the segments as well as the
charges described on page 7, interest on postretirement medical
benefits and stock-based compensation costs.
Charges
In addition to financial results determined in accordance with
generally accepted accounting principles (GAAP) this Fourth-Quarter
and Full-Year 2009 Earnings Press Release also includes non-GAAP
financial measures (as defined under SEC Regulation G). The
following is a reconciliation of these non-GAAP measures to the
comparable GAAP measures:
( Stated in millions, except per share amounts )
Fourth Quarter 2008 Pretax Tax
Noncont.Interest
Net Diluted
EPS (*)
Income Statement Classification
Income from Continuing Operations
attributable to Schlumberger
$ 1,476 $ 326 $ - $ 1,150 $ 0.95 Add back charges: - Workforce
reduction 74 9 - 65 0.05 Cost of revenue - Provision for doubtful
accounts 32 8 (6 ) 18 0.01 Cost of revenue - Other 10
- - 10 0.01
Interest and other income, net
Income from Continuing Operations
attributable to Schlumberger, before charges
$ 1,592 $ 343 $ (6 ) $ 1,243 $ 1.03 Twelve Months 2009
Pretax Tax
Noncont.Interest
Net Diluted
EPS (*)
Income Statement Classification
Income from Continuing Operations
attributable to Schlumberger
$ 3,934 $ 770 $ (8 ) $ 3,156 $ 2.61 Add back charges: - Workforce
reduction 102 17 - 85 0.07 Cost of revenue - Postretirement
benefits curtailment 136 14 -
122 0.10 Cost of revenue
Income from Continuing Operations
attributable to Schlumberger, before charges
$ 4,172 $ 801 $ (8 ) $ 3,363 $ 2.78 Twelve Months 2008
Pretax Tax
Noncont.Interest
Net Diluted
EPS (*)
Income Statement Classification
Income from Continuing Operations
attributable to Schlumberger
$ 6,852 $ 1,430 $ (25 ) $ 5,397 $ 4.42 Add back charges: -
Workforce reduction 74 9 - 65 0.05 Cost of revenue
- Provision for doubtful
accounts
32 8 (6 ) 18 0.01 Cost of revenue - Other 10 -
- 10 0.01 Interest and other income, net
Income from Continuing Operations
attributable to Schlumberger, before charges
$ 6,968 $ 1,447 $ (31 ) $ 5,490 $ 4.50 (*) May not add due
to rounding.
There were no charges in the fourth quarter of 2009.
Oilfield Services
Full-year 2009 revenue of $20.52 billion was 16% lower than
2008, driven by Area decreases of 37% in North America, 13% in
Europe/CIS/Africa and 9% in Middle East & Asia. Latin America
Area revenue was flat. Weakening of local currencies against the US
Dollar reduced 2009 worldwide revenue by approximately 4%. Among
the Technologies, decreases were most marked for Well Services,
Wireline and Drilling & Measurements services as customers
reduced spending. Pretax operating income of $4.33 billion was 33%
lower than 2008. Pretax operating margin decreased 570 basis points
(bps) to 21.1% due to lower activity and pricing, particularly in
North America.
Fourth-quarter revenue of $5.17 billion increased 4%
sequentially but decreased 17% year-on-year, with all Areas, except
Europe/CIS/Africa, contributing to the sequential improvement.
Sequentially, growth was driven by increased deepwater and
exploration-related activity leading to demand for Wireline,
Testing Services and Drilling & Measurements technologies,
while growth was also recorded on land in North America, primarily
from increased Well Services activity. In addition, seasonal
year-end strength was seen in product sales in a number of
GeoMarkets*—in particular for Schlumberger Information Solutions
(SIS) and Artificial Lift products. These increases, however, were
partially offset by lower activity in Russia and in the
Mexico/Central America GeoMarket.
Fourth-quarter pretax operating income of $1.01 billion was down
3% sequentially and 37% year-on-year. Pretax operating margin
decreased 157 bps sequentially to 19.5% primarily due to lower
activity coupled with a less favorable revenue mix in Russia and in
the Mexico/Central America GeoMarket. Pricing concessions made
earlier in the year also contributed to the sequential decrease in
margins.
North America
Fourth quarter revenue of $873 million was 6% higher
sequentially but 44% lower year-on-year. Pretax operating income of
$18.0 million was down 35% sequentially and 95% year-on-year.
Sequentially, US Land GeoMarket revenue grew on increased
drilling activity, the impact of which was partially diluted by
lower pricing for Well Services technologies. US Gulf of Mexico
GeoMarket revenue was up marginally as improved shelf activity and
the beginning of a build-up in deepwater activity were hampered by
downtime associated with Hurricane Ida as well as by some pricing
pressure. Canada revenue was flat while Alaska GeoMarket revenue
fell sequentially due to a slowdown in activity resulting from
operator budget constraints.
Pretax operating margin decreased 129 bps sequentially to 2.1%
as the increased activity in the US Land and Gulf of Mexico
GeoMarkets was insufficient to offset the impact of a less
favorable revenue mix in Canada and lower activity in the Alaska
GeoMarket.
In the Barnett Shale, Schlumberger Wireline improved the MDT*
Modular Formation Dynamics Tester mini-frac technique to provide
better fracture pressure results for a major operator. Stresses in
the near wellbore had previously prevented correct fracture
pressures being measured on many of the intervals tested but the
new technique has proved more accurate and can be utilized to
improve lateral well placement in the Barnett, Fayetteville and
Marcellus shales.
In West Texas, Schlumberger SensaLine* fiber-optic slickline
technology has been deployed for Apache on critical fracture
stimulation jobs on wells in the Permian Basin. The real-time data
provided by the technology have allowed Apache to monitor fracture
height growth during pumping operations. The data have proven to be
valuable in understanding fracturing programs—both in real-time and
in post-job evaluation.
In Canada, Schlumberger Wireline Rt Scanner* triaxial induction
technology was deployed for Devon Canada in a structurally complex,
tight-gas sandstone reservoir in northeast British Columbia. The
data were used to compute formation dips over the upper section of
the logged interval and clearly showed the marked variations in
structure due to thrust-faulting and associated folding consistent
with independent evaluations. The success of this application has
demonstrated the value of Scanner Family* technology in providing
integrated reservoir characterization measurements.
Also in Canada, Schlumberger Drilling & Measurements
PowerDrive vorteX* powered rotary-steerable technology was deployed
for Vermilion Energy to drill a 1,400-m horizontal section in the
Notikewan formation where previous operations for the customer had
experienced difficulties with conventional directional drilling
equipment. The choice of rotary-steerable systems for the longer
well was underwritten by the use of data from three offset wells to
set a performance benchmark linked to service pricing that rewarded
time saved versus the benchmark. The performance of the system
substantially exceeded expectations in reducing drilling time by
40%.
In November 2009, Schlumberger acquired Lonkar Services—a
company providing slickline, cased-hole wireline and surface well
testing services in Western Canada and Northern USA. Lonkar is the
leading supplier of slickline mechanical and measurement services
in Canada.
Latin America
Fourth quarter revenue of $1.13 billion increased 5%
sequentially and 2% year-on-year. Pretax operating income of $178
million was down 9% sequentially and 11% year-on-year.
Sequentially, Peru/Colombia/Ecuador GeoMarket revenue grew
primarily on greater demand for Drilling & Measurements,
Wireline and Testing Services technologies resulting from increased
drilling activity. Higher SIS and Artificial Lift product sales
also contributed to this growth. Brazil revenue was higher due to
increased offshore exploration activity as well as to SIS and
Completions product sales. Venezuela/Trinidad & Tobago
GeoMarket recorded growth mainly from Integrated Project Management
(IPM) activity while Argentina/Bolivia/Chile revenue was higher due
to increased activity and SIS product sales. These increases were
partially offset by a decrease in Mexico/Central America revenue as
a result of reduced activity.
Pretax operating margin decreased 254 bps sequentially to 15.8%
primarily as the result of the reduced activity and a less
favorable revenue mix in the Mexico/Central America GeoMarket,
which was only partly offset by the impact of increased activity
and product sales in the rest of the Area.
In Brazil, Schlumberger Well Services introduced new-technology
X-11* modular offshore coiled-tubing units for Petrobras on the
Tupi field in the Santos basin. The first operation with the X-11
in 2,000 m of water has already been successfully conducted with
the compact size of the new unit leading to minimum footprint and
uncluttered rig-up on the drilling unit. The operations conducted
so far include hydrate removal using Jet Blaster* scale removal
technology in addition to directional well kick-off services, all
with the support of the Petrobras Well Evaluation and Completion
Services department (PETROBRAS/E&P-SERV/US-PO/SCA).
In Mexico, Schlumberger Wireline FlowScanner* horizontal and
deviated well production logging technology was run for PEMEX South
Region in the Jujo field to investigate increasing water cut, high
gas production and lowering overall liquids production. The
three-phase capability of the FlowScanner measurement clearly
detected a casing leak above the well's perforated intervals that
was subsequently sealed with mechanical plug-back technology
allowing perforation of a new production interval.
Also in Mexico, Rt Scanner wireline technology helped PEMEX
evaluate complex reservoirs in deepwater Gulf of Mexico operations
where conventional open-hole logging services cannot detect or
quantify hydrocarbon deposits. In combination with CMR* Combinable
Magnetic Resonance technology, the Scanner service successfully
detected the presence of laminated reservoirs in the exploration
well and enabled proper quantification of net-pay thickness. Data
processing and interpretation were performed in real time to
support operational decision-making and confirm a potential
hydrocarbon discovery.
Schlumberger also continued to deploy valuable Drilling &
Measurements technologies for PEMEX. These included seismicVISION*
seismic-while-drilling services to reduce the drilling risks
associated with the proximity of a deepwater well to salt
formations; a combination of arcVISION* array resistivity
compensated, sonicVISION* sonic-while-drilling and slim adnVISION*
azimuthal density neutron technologies that helped adjust coring
operations to save at least two days of deepwater rig time; the use
of Periscope* imaging-while-drilling technology to steer the 400-m
horizontal section of a well in the Yaxche field within a formation
only 3 m thick; and the PowerDrive Xceed* system that set new
drilling efficiency standards in a well in the Poza Rica field by
reaching more than three times the rate of penetration seen on
previous wells in the same field.
In Colombia, Ecopetrol awarded Schlumberger the GITEP project to
manage its corporate petrotechnical data. This integrated project
will involve a number of SIS information management applications,
including InnerLogix* data quality management solutions and the
ProSource* seismic and well log data management software.
Europe/CIS/Africa
Fourth quarter revenue of $1.78 billion was flat sequentially
but 13% lower year-on-year. Pretax operating income of $385 million
was down 9% sequentially and 28% year-on-year.
Sequentially, Nigeria & Gulf of Guinea GeoMarket revenue
grew as the result of strong Testing Services product sales and an
increase in exploration activity that led to greater demand for
Wireline services. In the West & South Africa GeoMarket revenue
increased on high demand for Drilling & Measurements services.
The North Sea GeoMarket also recorded growth from increased Well
Services stimulation activity while Libya GeoMarket revenue
increased on higher deepwater Testing Services and Wireline
exploration activity. These increases, however, were partially
offset by lower revenue in Russia as a result of client budgetary
constraints which mainly affected IPM activity. Revenue was also
lower in the North Africa GeoMarket on reduced Testing Services
product sales, and in the Caspian GeoMarket on the completion of
drilling campaigns.
Pretax operating margin decreased 208 bps sequentially to 21.6%
largely as the result of the lower activity in Russia.
In Sakhalin, Schlumberger Completions successfully installed the
first intelligent completion in Russia on a Sakhalin Energy
Investment Company Piltun well. The completion was installed in
less than ten days in the 4,008-m water injection well and will
control four independently monitored zones with a number of
innovative solutions that include unique switching technology to
link downhole gauges to surface monitoring equipment. The
installation was completed only six weeks after the opening of the
Schlumberger Yuzhno-Sakhalinsk completions base.
In the Caspian, Schlumberger Wireline deployed a range of new
technology to help Karachaganak Petroleum Operating BV—a consortium
between Eni, BG, Chevron and LUKOIL—significantly improve reservoir
understanding in the Karachanagak field, one of the world's largest
oil and gas-condensate fields. The multi-array vertical wellbore
seismic profiler allowed imaging of the complex sub-basalt
structure, while the slim formation imager run on drillpipe
identified the position of a fault in a horizontal well, and the
new combinable rapid formation-pressure measurement service
enhanced overall reservoir characterization.
In Angola, Schlumberger Drilling & Measurements
seismicVISION* seismic-while-drilling technology was successfully
deployed for Petrobras on their first exploration well to mitigate
drilling uncertainties in an extremely high-cost deepwater
environment. The real-time data transmitted to the Schlumberger
OSC* Operations Support Center in Luanda were used to ensure
optimum well placement and the service is now being considered by
Petrobras for some of the future wells in the deepwater exploration
program in Angola.
In Nigeria, Schlumberger Drilling & Measurements deployed
StethoScope* formation pressure-while-drilling, EcoScope*†
multifunction logging-while-drilling, and PeriScope technology in a
deepwater well operated by Nigerian Agip Exploration (NAE). This
technology solution reduced the risk associated with data
acquisition while obtaining high-quality formation evaluation,
reservoir property, and borehole caliper data and enabled NAE to
drill 612 m of 8.5-in horizontal drain section with 100% reservoir
exposure making this section the longest horizontal well completed
with sand control for Eni worldwide.
In Equatorial Guinea, Noble Energy awarded Schlumberger wireline
logging, directional drilling and subsea completions
contracts to cover the work on 10 wells, with the
possibility of additional development in the region. The subsea
completions contract covers installation of the upper and lower
well completions—including reservoir monitoring and control
technologies—on the Aseng development project. The award was based
on technology availability and operational support.
In North Africa, Schlumberger Well Services EverCRETE*
CO2-resistant cement was used to plug and abandon a
natural gas producing well in a field where produced carbon
dioxide (CO2) is reinjected into saline-water zones. New wells in
the field are now planned to be completed using this novel cement
that has been recognized for the benefits it brings to operations
where the presence of CO2 requires a
long-term solution for zonal isolation during injection,
storage, monitoring and abandonment. The technology can be applied
for both carbon capture and storage, and for CO2 enhanced
oil recovery projects.
In Algeria, Schlumberger Artificial Lift was awarded a two-year
contract for artificial lift systems by Groupement Sonatrach AGIP.
The contract covers the lease of high-technology electric
submersible pumps, including power generation services and
espWatcher* surveillance and control systems for a number of wells
covering multiple oilfields in southeast Algeria. The contract
award represents a breakthrough in addressing the artificial lift
challenges of small oilfields in remote locations.
Offshore Libya, Schlumberger Completions completed two jobs in
the Bouri field operated by Mellitah Oil and Gas (an NOC/Eni
controlled joint venture) using nickel-chromium 4 1/2-in inflow
control devices (ICD) to counter the downhole hostile environment.
The operations were the first Schlumberger ICD jobs run for Eni as
well as the first matrix stimulations performed in the Bouri field
fractured carbonate reservoir using ICD technology.
In the UK sector of the North Sea, Schlumberger installed an
innovative completion for Centrica Energy. The completion, designed
in close collaboration with Centrica Energy, used the hybrid NEON*
opto-electric permanent monitoring cable as well as permanent
quartz gauges. The NEON cable, attached to the perforating gun
assembly, extended below the production packer across the
perforated interval to provide distributed temperature sensing
(DTS) with the measurements enabling Centrica Energy to save rig
time and establish well performance. This is the first known
instance of fiber-optic measurements being used to monitor a
perforating operation and the installation represents the first
Schlumberger fixed-fiber DTS installation in a subsea
environment.
In Italy, ACTive* technology real-time coiled-tubing services
have been successfully introduced for Eni throughout the client's
matrix stimulation and well clean-out operations in carbonate
reservoirs in the Val d’Agri region. The ACTive system fiber-optic
cable deployed along the coiled tubing, together with discrete
downhole pressure, temperature and depth measurements, provides
proper pay zone evaluation as well as analysis of thermal behavior
before and after stimulation. The combination identifies injection
intervals from temperature changes to help divert treatments for
optimal stimulation.
Also in Italy, Schlumberger Completions was awarded a contract
by Stogit, the Eni gas storage company, for 20 hybrid onshore gas
storage well monitoring systems. The new hybrid systems combine
fiber-optic and quartz pressure gauges with fiber-optic distributed
temperature sensing. Gas storage in Italy is ruled by strict
government laws that require data to be provided at regular
intervals, and Stogit selected hybrid sensor technology in order to
maximize the system's long-term reliability. Schlumberger has a
20-year track record of successful deployment of gas storage well
monitoring systems for Stogit, and this award represents the first
time that this particular technology will be installed in multiple
wells on the same project.
Middle East & Asia
Fourth quarter revenue of $1.31 billion increased 7%
sequentially but decreased 10% year-on-year. Pretax operating
income of $426 million was 9% higher sequentially but 13% lower
year-on-year.
Sequentially, Area revenue growth was driven by an increase in
deepwater and exploration-related activity that led to strong
demand for Wireline services. Seasonal year-end Artificial Lift and
SIS product sales also contributed to the increase in revenue.
Pretax operating margin improved 66 bps sequentially to 32.4%
primarily as the result of the more favorable mix of deepwater and
exploration-related activity in addition to year-end SIS product
sales.
In Saudi Arabia, Schlumberger Well Services technologies were
deployed in an extended-reach open-hole horizontal well to
demonstrate their viability in the stimulation of water injection
wells on the Saudi Aramco Manifa field. In a rig-less operation,
the world's longest coiled-tubing-deployed fiber-optic cable
measuring 32,175 ft was used for real-time downhole monitoring of
an ACTive Matrix treatment on the injection zone of the well with
VDA* Viscoelastic Diverting Acid technology. An ACTive Profiling
distributed temperature survey was then used to record an
injectivity test to provide data for water-injection planning. All
services were performed in one coiled-tubing run. The results were
highly successful and will permit operational and quality
optimization on future treatments.
Also in Saudi Arabia, a series of Schlumberger Well Services
ACTive real-time coiled-tubing technologies were deployed as part
of the stimulation treatment on a dual lateral natural gas well
completed in open hole. The technologies enabled positive lateral
identification, facilitated fluid movement monitoring and helped
customized placement of the stimulation diversion and acid system
in the main intervals of interest. Resulting production exceeded
initial expectations.
In the Arabian GeoMarket, Schlumberger Drilling &
Measurements StethoScope formation-pressure-while-drilling
technology has been successfully introduced for the Kuwait Oil
Company. Close cooperation between Drilling & Measurements and
Data & Consulting Services teams identified opportunities for
pressure measurements-while-drilling and helped monitor operations
in real time to control quality and ensure optimal results.
StethoScope technology was deployed in combination with other
Scope* family services to acquire the data necessary to guide
subsequent operations including determination of perforation
intervals.
In Abu Dhabi, UAE, Schlumberger Well Services VDA technology was
deployed with ACTive coiled-tubing services to stimulate carbonate
formations in an onshore field. The real-time capability of the
ACTive system, in conjunction with InterACT* connectivity and
collaboration services, provided the information needed to identify
high-permeability zones that were then isolated to divert treatment
fluids into the target zones. The treatment was monitored from the
customer's office using the InterACT system to track progress and
make decisions in real time.
In Malaysia, Schlumberger introduced a combination of CIRP*
Completion Insertion and Removal under Pressure, eFire-CT*
electronic firing head system for coiled-tubing, and ACTive
fiber-optic enabled coiled-tubing technologies that reduced
operating time and increased depth accuracy. Following this
success, Talisman Malaysia Ltd. awarded Schlumberger a contract for
the same technologies to be deployed on other projects in Malaysia,
including the Bunga Orchid field development in 2010.
Also in Malaysia, Schlumberger successfully completed two water
injector wells by deploying electrical submersible pumps using
REDACoil* technology with 2 3/8-in coiled-tubing used as completion
tubing. The project deployed resources and services from a number
of Schlumberger Technologies including Artificial Lift, Completions
and Well Services and was completed eight days ahead of schedule
and below the allocated budget.
In Brunei, Schlumberger Testing Services performed an offshore
exploration and appraisal test for Brunei Shell Petroleum (BSP) on
the BIMA multipurpose jack-up rig. The 75-day, multi-zone
test—which also involved Well Services fracturing operations—was
monitored in real time and set new benchmarks for operating
efficiency through close cooperation and meticulous planning by BSP
and Schlumberger that culminated in health, safety and environment
key performance indicators being exceeded in line with Shell Goal
Zero targets.
In Australia, recently introduced Schlumberger Wireline pressure
measurement technology was run for Chevron to improve efficiency
and mitigate risk in two deepwater wells. The Pressure Xpress*
reservoir pressure-while-logging service reduced station
measurement time by half and in combination with CMR-Plus* high
logging speed magnetic resonance technology led to an average
16-hour saving per well.
In the Assam field in India, Schlumberger Wireline slim
cased-hole formation resistivity tool technology was used for ONGC
to acquire data in a well in which conventional open-hole logs
could not be run due to hole conditions. The measurements indicated
the presence of hydrocarbon-bearing zones and, based on this
interpretation, ONGC perforated the well resulting in oil
production. Without this technology, such results would not have
been feasible.
Offshore India, innovative Schlumberger Wireline technology
revived oil production from an ONGC well in the Neelam field. The
gas-oil contact (GOC) in this field is thought to be regional and
the recent drilling of a new well had produced only water. For the
subsequent well, it was decided to run the downhole fluid profiling
service using the MDT modular formation dynamics tester combined
with the LFA* Live Fluid Analyzer module to optimize well
placement. Real-time data established the depth of the GOC to help
characterize the reservoir more accurately with the contact found
higher than previously thought. A good oil producing horizon was
consequently identified in which a horizontal drain hole was placed
and the well is now the best producer of the platform. The new
technology combination run is estimated to have saved seven days of
rig time. The addition of LFA technology for in-fill well planning
is credited by the client as the single most important factor in
the rejuvenation of this platform.
WesternGeco
Full-year 2009 revenue of $2.12 billion was 25% lower than 2008.
Pretax operating income of $326 million was down 61% versus 2008.
Pretax operating margin decreased 14 percentage points to 15.4%
primarily due to significantly lower activity and pricing in Marine
as well as a decrease in Multiclient sales.
Fourth-quarter revenue of $549 million increased 19%
sequentially but decreased 8% year-on-year. Pretax operating income
of $115 million increased 89% sequentially and 30%
year-on-year.
Sequential revenue growth was led by Multiclient which recorded
strong year-end sales of wide-azimuth surveys in the US Gulf of
Mexico. Land revenue also grew due to increased activity in the
Middle East and North Africa. These increases, however, were
partially offset by a significant decrease in Marine as the result
of weaker pricing, project start-up delays and vessel transits.
Pretax operating margin improved 776 bps sequentially to 20.9%
primarily as a result of the high Multiclient sales that were
partially offset by the impact of the lower pricing and project
delays in Marine.
In the US Gulf of Mexico, two WesternGeco multiclient
wide-azimuth crews were active during the quarter. The first crew,
on the WG Magellan, continued acquisition of the E-Octopus IX
survey in the Alaminos and Keathley Canyon areas, while the
second crew, on the WG Columbus, began acquisition of the
E-Octopus VII survey in the Lower Tertiary of the Walker Ridge—a
survey that will integrate the previous E-Octopus IV and E-Octopus
VI phases.
Wide-azimuth multiclient survey processing in the US Gulf of
Mexico also advanced in the quarter with completion of final
processing on the E-Octopus IV project in the Keathley Canyon area.
With this step, the WesternGeco Gulf of Mexico data library has
expanded to more than 1,000 Outer Continental Shelf blocks of
seamless depth-migrated E-Octopus seismic coverage.
WesternGeco has been contracted to perform the first multi- and
wide-azimuth projects offshore Brazil. The projects are to be
acquired in the first quarter of 2010, with the wide-azimuth survey
forming the baseline for future 4D projects. Multi- and
wide-azimuth seismic acquisition techniques have been shown to
improve illumination and imaging around and beneath salt structures
allowing better prospect definition.
Offshore Angola, a WesternGeco Q-Seabed* multicomponent seabed
seismic system crew recently completed a year-long project for
Chevron (CABGOC). The 1,100-sq km survey ranks among the largest
ocean-bottom-cable multicomponent surveys ever acquired, and was
performed in a highly congested, active oilfield with many
platforms, pipelines and production installations.
During the quarter, WesternGeco deployed the next-generation
UniQ* integrated point-receiver land seismic acquisition and
processing system in Kuwait for the Kuwait Oil Company. The new
system, designed for greater operational efficiency and
flexibility, offers up to four times the capability of existing
Q-Land* systems and is currently acquiring data from 53,000 live
point-receiver channels in conjunction with WesternGeco DX-80*
Desert Explorer vibrators and MD Sweep* technology.
About Schlumberger
Schlumberger is the world’s leading supplier of technology,
integrated project management and information solutions to
customers working in the oil and gas industry worldwide. Employing
approximately 77,000 people representing over 140 nationalities and
working in approximately 80 countries, Schlumberger provides the
industry’s widest range of products and services from exploration
through production.
Schlumberger Limited has principal offices in Paris, Houston and
The Hague and reported revenues of $22.70 billion in 2009. For more
information, visit www.SLB.com.
*Mark of Schlumberger
†Japan Oil, Gas and Metals National Corporation (JOGMEC),
formerly Japan National Oil Corporation (JNOC), and Schlumberger
collaborated on a research project to develop LWD technology that
reduces the need for traditional sources. Designed around the
pulsed neutron generator (PNG), EcoScope service uses technology
that resulted from this collaboration. The PNG and the
comprehensive suite of measurements in a single collar are key
components of the EcoScope service that deliver game-changing LWD
technology.
Notes
Schlumberger will hold a conference call to discuss the above
announcement on Friday, January 22, 2010. The call is scheduled to
begin at 8:00 am US Central Time (CT), 9:00 a.m. Eastern Time (ET).
To access the call, which is open to the public, please contact the
conference call operator at +1-800-230-1059 within North America,
or +1-612-234-9959 outside of North America, approximately 10
minutes prior to the call’s scheduled start time. Ask for the
“Schlumberger Earnings Conference Call.” At the conclusion of the
conference call an audio replay will be available until February
22, 2010 by dialing +1-800-475-6701 within North America, or
+1-320-365-3844 outside of North America, and providing the access
code 120779.
The conference call will be webcast simultaneously at
www.SLB.com/irwebcast on a listen-only basis. Please log in 15
minutes ahead of time to test your browser and register for the
call. A replay of the webcast will also be available at the same
web site.
Supplemental information in the form of a question and answer
document on this press release and financial schedules are
available at www.SLB.com/ir.
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