Oilfield services group SLB resists increasing pressure to exit Russia

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

SLBThe former Schlumberger said on Friday that it was reviewing rules last week by the Biden administration barring U.S. petroleum services in Russia. But the company’s chief executive, Olivier Le Peche, told investors on a conference call that he believed the operation was “in line with the new sanctions” at this point.

The Houston-headquartered company has cut its Russian operations to 4 percent of its global revenue, or $1.4 billion, by 2024, down from 5 percent a year earlier.

New pressure is coming from US lawmakers to get the SLB out of Russia to stem the flow of petrodollars used to fund the Kremlin. War in Ukraine. In October, a bipartisan group of more than 50 members of Congress wrote to the Biden administration calling for tougher sanctions on U.S. oilfield service companies operating in Russia to force SLB out of the country.

SLB is among the few that are based in America. Oil companies In the year Following Moscow’s full-scale invasion of Ukraine in February 2022, it is still operating in the country. The company’s two biggest Western rivals, Baker Hughes and Halliburton, sold their Russian operations to local managers in 2022.

Le Peuch told analysts that SLB had taken voluntary measures to curb its Russian activities by 2023, including products and technologies exported to the country from all SLB facilities around the world.

“We are reviewing the new sanctions, and at this time, we believe that our voluntary measures are in line with the new sanctions,” he said.

An investigation by the Financial Times last year found that SLB had signed new contracts, advertised for more than 1,000 jobs and imported its equipment to Russia as its competitors pulled out of the country.

Oilfield service providers perform many fascinating tasks for the global oil and gas industry – from building roads and laying pipelines to drilling wells. and crude extraction. But they also provide access to sophisticated technologies that are critical to the discovery and development of complex drilling operations.

Oil industry experts say SLB is reluctant to leave Russia because it will likely be awarded contracts by the Kremlin when the war on Ukraine ends and Western sanctions are lifted.

Human rights groups and the Ukrainian government say SLBB’s work in Russia helps generate billions of dollars in oil revenue to fund the Kremlin’s war. Last year, Ukraine’s National Anti-Corruption Agency added SLB to its “international war sponsor” blacklist.