World’s largest oilfield services company has no plans to leave Russia – FT (NYSE:SLB)

SLB (NYSE:SLB) has no plans to exit Russia two years after invasion of Ukraine, CEO Olivier Le Peuch told the Financial Times on Monday, despite Western pressure to curb the flow of oil funds to Vladimir Putin’s war machine.

The world’s largest oilfield services company – formerly called Schlumberger – has not taken a decision on whether to follow its biggest oilfield services rivals Baker Hughes (BKR) and Halliburton (HAL) in selling its Russia operations and is honoring its contracts with customers, the CEO said.

“The team over there [in Russia] is operating autonomously and I think is behind the curtain to some extent. We are protecting our assets, that’s our priority,” Le Peuch told FT in an interview.

Since the fall of the Soviet Union, SLB (SLB) has built a major business in Russia, which generated ~5% of the company’s $33.1B revenues last year and employed ~9K staff.

SLB (SLB) stopped new investment and technology deployment in Russia in March 2022, and stopped shipments of products into the country in July 2023 following an escalation of sanctions, but unlike its rivals, it still retains a presence in the country.

“Russia’s oil industry would crumble without foreign oilfield services firms,” Global Witness senior investigator Lela Stanley told FT.

Western governments have been wary of tightening sanctions on Russia’s oil and gas industry over concerns it could lead to a surge in commodity prices that destabilizes the world economy, but some experts say this fear is overdone.

“Russia has the means to maintain production without these technologies; it will just be more costly,” according to former Bank of America vice chair Craig Kennedy, now at Harvard. “And the more they have to spend producing barrels, the less left over for bombs.”