Olivier Le Peuch: Yeah. No, it’s a fair question. And I think first and foremost, stepping back in time. I think we have been — as we prepared our core strategy a few years back, we identified that production recovery in particular production chemicals, reservoir chemicals, and lift solutions will be a domain where we need to invest in technology, and we need to explore opportunity to accelerate our market participation because we believe two things: we believe first, that this market will benefit from further innovation, from further integration, from further disruption, and hence create through OpEx, the efficiency gains into production operations, into recovery. And we believe that the market is discovering to some extent has discovered, but has an opportunity to exploit more of these production chemicals, more of this optimized full life lift solution and combined with digital, so we believe that all in all, this market is not only an OpEx versus CapEx. This market is responding to increased demand, and increased opportunity we see in the market that has been there growing, and for which we are willing to respond and the customer feedback and engagement we had realizing the potential of what we can put together from technology from workflow integration, from automation and from optimization from the main reservoir knowledge to process equipment will clearly create a new leg into the technology deployment and into the efficiency of producing assets.
So — and I will not try to oppose OpEx/CapEx. I will just say that the production recovery is becoming critical- it has been for the last few quarters – has increasingly become part of the priority of our customers. Now we believe as well that this market has further resilience because the market, every liquid produced in the world, more or less demands an amount of production chemicals to assure its resilience in production. And at the same time, we believe that as the long term, most of the assets will see a higher water cuts, and some of the assets will see more complex reservoir fluids coming up to the process facility. There will be an increasing need to add in more sophisticated and more technical production chemicals to the flow. So all in all, an opportunity today and a resilient outlook for tomorrow.
David Anderson: So it’s not so much, you see, I’ve seen CapEx slowing. It is more that you see OpEx side increasing and more technology increasing. That sounds…
Olivier Le Peuch: Exactly. I see what we see and in the engagement with customers, we see that in their quest for production recovery opportunity, we see that a combination of production chemicals, digital capability including optimizing some production lift solutions and overall intervention is in dire need for modernizing, innovation, and automation. And we believe that the addition of this to our portfolio, the significant talent and capability we are getting through the addition of ChampionX will help us fast-track this new path of production recovery market expansion. That would be a combination of OpEx and CapEx, and OpEx will only supplement and add opportunity for growth and it is not at all relating to where we are in the cycle for CapEx.
David Anderson: Understood. And then so just as a follow-up on the ChampionX deal. I was surprised to see you announced $400 million in synergies for a company that was as well run as ChampionX is. Can you help us break that down a little bit more? Like, where do you see the greatest opportunity on the cost side? And also, if you could expand the revenue synergy side. To be honest, we hear about revenue synergies all the time but ultimately don’t materialize. So what’s different here in ChampionX, where you have more confidence in the revenue synergy side?
Stephane Biguet: So Dave, yes, thanks for the question. So again, yes, $400 million of annual synergies which we think we can achieve in the first three years. And as we said, 70% to 80% achieved in the second year, which makes the transaction accretive to earnings per share in year two. So now we have the full integration team in place, refining estimates going through all the buckets of synergies. So I’m not going to give you definitive numbers, but as a rough split, most of the synergies, most of the $400 million synergies, let’s say, about 75% of it is related to costs and 25% related to initial revenue synergies, so of the 75% cost synergies, again, an approximate 75%, you can say that roughly half of that is on our own SLB spend.
We mentioned earlier, we spent a lot of chemicals, for example, for overall operations. And with the manufacturing and internalization of spend we can do with ChampionX, we think we can have great savings there. And the over half or so of the cost synergies would be G&A and other operating cost savings if that helps.
David Anderson: Thank you very much. Appreciate it.
Stephane Biguet: Thank you.
Olivier Le Peuch: Thank you, Dave.
Operator: Next, we move on to Arun Jayaram with JPMorgan. Please go ahead.
Arun Jayaram: Good morning. Olivier, I wanted to get your perspective on the spending picture in Saudi Arabia and the potential impacts from SLB given the decision to maintain their maximum spare capacity at 12 million barrels, but obviously, a shift to higher levels of gas development. And I just wondered also if you could maybe address just the recent decision to suspend some shallow water drilling in the country.
Olivier Le Peuch: Yeah. Thank you, Arun. I think let me first maybe for simplicity and for aligning our views, maybe let me unpack first and give some additional color on this rig suspension. And I think these are public data, and I think a total of 20 to 22 rigs are being suspended to divest for consolidation. But this is in the context of this both Safaniya and Manifa projects, oil incremental project expansion program, that has been suspended. Both of these assets were having combined slightly above 20 jackups operating in these two assets at the end of last year. The anticipation of the additional rigs necessary for the expansion, we expect customers will add (corrected by company after the call) another dozen rigs. When you make the math at the end of this year, both of these assets will host slightly above 10 to a dozen rigs or a net 10 rigs less than the rig count at the (corrected by company after the call) end of last year.
