Oilfield services group SLB resists rising pressure to exit Russia

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Oilfield services giant SLB is resisting growing pressure to exit Russia, telling investors its operations do not violate new sanctions targeting the country’s oil sector.

SLBFormerly known as Schlumberger, it said on Friday it was reviewing strict rules issued by the Biden administration last week banning the provision of US petroleum services to Russia. But the company’s chief executive, Olivier Le Pueche, told investors in a conference call that he believed at this point that its operations were “aligned with the new sanctions”.

The Houston-headquartered company added that its Russian operations will contribute 4 percent of its global revenue in 2024, or about $1.4 billion, down from 5 percent a year earlier.

SLB is coming under renewed pressure from US lawmakers to pull out of Russia after new sanctions aimed at stemming the flow of petrodollars used to finance the Kremlin. War in Ukraine. In October, a bipartisan group of more than 50 members of Congress wrote to the Biden administration demanding tougher sanctions on US oilfield services companies operating in Russia, to force SLBs to leave the country.

SLB is one of a handful based in the US oil company Still operating in the country after Moscow’s full-scale invasion of Ukraine in February 2022. The company’s two biggest Western rivals, Baker Hughes and Halliburton, sold their Russian operations to local managers in 2022.

Le Pueche told analysts that SLB has taken voluntary measures to reduce its Russian operations, including ceasing shipments of goods and technology to the country from all SLB facilities worldwide in 2023.

“We are reviewing the new sanctions, and at this point, we believe our voluntary measures are consistent with the new sanctions,” he added.

A Financial Times investigation last year found that SLB had signed new contracts, advertised more than 1,000 jobs and imported equipment into Russia as its competitors left the country.

Oilfield service providers do much less glamorous work for the global oil and gas industry — everything from building roads and laying pipes to drilling wells and pumping crude. But they also provide access to state-of-the-art technology that is critical to supporting the exploration and development of complex drilling operations.

Oil industry experts say SLB is reluctant to leave Russia because the Kremlin would reward it with a deal if the war against Ukraine ends and Western sanctions are lifted.

Human rights groups and the Ukrainian government allege that SLB’s work in Russia helps generate billions of dollars in oil revenue to support the Kremlin’s war effort. Last year, Ukraine’s National Agency on Corruption Prevention added SLB to its blacklist of “international sponsors of war”.