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Oilfield services giant SLB is resisting rising pressure to exit Russia, telling investors that its operations do not breach sweeping new sanctions targeting the country’s oil sector.
SLB, previously called Schlumberger, said on Friday it was reviewing tough rules issued by the Biden administration last week prohibiting the provision of US petroleum services in Russia. But the company’s chief executive Olivier Le Peuch told investors on a conference call that he believed at this point its operations “aligned with the new sanctions”.
The Houston-headquartered company added the contribution of its Russian operations fell to 4 per cent of its global revenues in 2024, or about $1.4bn, from 5 per cent a year earlier.
SLB is coming under renewed pressure from US legislators to pull out of Russia following the issuing of the new sanctions that are aimed at curbing the flow of petrodollars used to fund the Kremlin’s 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-based oilfield services companies operating in Russia, in a bid to force SLB to quit the country.
SLB is among a handful of US-based oil companies still operating in the country following 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 Peuch told analysts SLB had taken voluntary measures to curtail its Russian activities, including halting shipments of products and technology into the country from all SLB facilities worldwide in 2023.
“We are reviewing the new sanctions, and at this point, we believe that our voluntary measures are aligned with the new sanctions,” he added.
A Financial Times investigation last year found that SLB had signed new contracts, advertised for more than 1,000 jobs and imported equipment into Russia since its competitors had exited the country.
Oilfield services providers carry out much of the 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 sophisticated technologies that are vital to support exploration and development of complex drilling operations.
Oil industry experts say SLB is reluctant to leave Russia because it will probably be rewarded by the Kremlin with contracts when the war against Ukraine ends and western sanctions are lifted.
Human rights groups and the Ukrainian government allege SLB’s work in Russia helps to generate billions of dollars of oil revenues to support the Kremlin’s war effort. Last year, Ukraine’s National Agency on Corruption Prevention added SLB to an “international sponsor of war” blacklist.
