INSIGHT-SLB wins Russian business as rivals retreat from oilfields after invasion of Ukraine

By Liz Hampton

January 19 (Reuters)After Moscow’s invasion of Ukraine, the world’s largest oil company SLB SLB.N has boosted its operations in Russia by picking up service and equipment contracts from departed rivals, according to company documents and people familiar with its operations.

While SLB’s continued embrace of Russia has drawn sharp criticism, interviews with two people close to the company and industry sources, as well as company documents reviewed by Reuters, show that SLB’s decision to help Russia increase oil and gas production with its services and equipment paid off for drilling.

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

“Trade with Russia is the financing of aggression, the killing of civilians and the destruction of peaceful cities,” said a spokesman for the Ukrainian embassy in Washington, DC when asked about SLB operations in Russia.

The Business & Human Rights Resource Centre, an international organization that monitors corporate responses to human rights issues, warned of the risk of the company being drawn into the war effort with Russia’s military mobilization.

SLB did not respond to requests for comment. The Russian Energy Ministry and the Russian Embassy in Washington, DC did not respond to a request for comment.

In the months since Russia invaded Ukraine, western results companies have closed or sold their operations there to avoid running afoul of sanctions or to avoid the appearance of aiding Vladimir Putin’s war. Others suspended investments or operations, while some remained in Russia.


In contrast, SLB added about 70 employees in Russia at the end of 2022, including staff for its key clients such as Gazprom and Rosneft, according to two sources familiar with the matter who cited that as a sign that its business there is not slowing down.

The company registered in Curacao is a large foreign employer in Russia with around 10,000 employees, or about 10% of the global workforce, spread across Russia and neighboring Kazakhstan, where it also recorded an increase in sales.

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

Weatherford, a smaller competitor, remains but its involvement in the industry is shrinking as it has terminated some existing contracts that SLB was able to take over, a source working in Russia told Reuters. Reuters was unable to determine how many contracts SLB was awarded.

SLB is also to be the exclusive provider of directional drilling for a major Russian gas project, the source said.

Russian production defied predictions of a major declineand for January until November last year increased by 2.2 percent compared to last year’s level, an average of 10.91 million bpd of oil and gas condensate production, Reuters reported last year, citing Russian media. Countries like India, China and They are Pakistan buying Russian oil at deep discounts, while production at the Sakhalin-1 project, which was operated by Exxon Mobil Corp before it exited after the invasion of Ukraine, is getting closer to returning to full capacity.

The company resumed operations there in 2014 after the US imposed sanctions on Rosneftpartner in the project.

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.

SLB gets revenue boost from Russia

(Reporting by Liz Hampton in Denver; Editing by Anna Driver and Gary McWilliams)

(([email protected]; +1 832 571 8115; Reuters Messaging: Reuters Messaging: [email protected]))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

Leave a Reply

Your email address will not be published. Required fields are marked *