Olivier Le Peuch: Yes. I think first, you have to realize that the capacity expansion program announced by the multiple country that have met their commitments extend from 27 to 30 plus, 30, 35 or 40 from the last country that have expanded this. And hence, I think the capacity will be — continue to be seeing addition both land and offshore to respond to that capacity expansion. Gas, I think, is here for the long in the Middle East for 2 reasons. First, there are gas reserves that are really at a very good economic point, partially in Qatar, and we continue to present an LNG feed to the global gas market, but also unconventional reserves are seeing a significant investment, and we expect this to actually grow fast in the coming years in two or three countries that are focused on commercial gas.
So the combination of this is giving us the confidence that the record ever investment that we have seen last year in Middle East will continue in ‘24, ‘25 and has potential to expand well into the second half of the decade.
Operator: And our next question is from Neil Mehta with Goldman Sachs.
Neil Mehta : A couple of questions for me. The first is on EBITDA margins. Congrats on crossing that 25% EBITDA margin mark. How should we think about the margin path in 2024? And as you think about the upside and downside factors that could drive you on that metric, how should we think about that?
Stephane Biguet : Clearly, we see upside in ’24 and continued margin expansion as we expressed earlier, really, the — I’m sure you will calculate, but our guidance of mid-teens EBITDA growth in absolute dollars will be achieved with revenue growth, but clearly with margin expansion across our core and in digital, as I mentioned. So yes, we continue to see margin expansion. We have great operating leverage. We have pricing tailwinds in our in our backlog and new technology adoption, and this is pushing margins together with the favorable mix, as you well know, offshore is helping margins as well. So, it’s subside — it’s continue to subside from now on.
Neil Mehta : Okay. It does sound like geo mix, operating leverage pricing, a lot of different factors there. That’s helpful. And then in terms of North America, I recognize it’s a smaller business for you, but you indicated in the comments you expect North America to grow in 2024 despite weaker rig count and activity. Can you talk about what’s driving that and how you’re able to outperform in the face of a tougher North America macro? And where are you seeing the technology adoption from a customer perspective?
Olivier Le Peuch: No, we’re very pleased with our performance in North America in retrospect in 2023 as we visibly outperformed the rig count, and we were able to grow in sequentially visibly. And we expect indeed to continue to outperform the market, and it comes from multiple factors, the mix factor of exposure we have with great exposure in Gulf of Mexico as well as East Canada and Alaska, we will see a potential of technology adoption and giving us the benefits of our mix. But also in the U.S. land market, I think we had a transition to a fit-for-basin and technology leverage focused portfolio in U.S. land and to some extent, in Canada. And we have seen this as a success with adoption of some really unique drilling technology in particular digital CCS giving us the tailwind to outperform the market in 2023, and we see this continuing.
Now the priority for customers remain clearly efficiency and recovery in U.S. land market and hence, more efficiency on the trading well construction side, more recovery, use of digital, use of ESPs and also low carbon when it matters. We’ll continue to make the impact and serve us very well. And the U.S. Gulf of Mexico and offshore market performance through integration performance to execution and reliability of our execution, I think, will continue to be paramount for our customers. And as long as we continue to deliver at this level, we’ll get rewarded with market position and contract and pricing. And hence, we’ll be able to outperform the recount, hence our guidance up to reaching the mid-single digit in 2024 against the market outlook.
Operator: Next, we’ll go to Arun Jayaram with JPMorgan.
Arun Jayaram: I wanted to get your thoughts on what you’re seeing in the international markets in terms — perhaps you could compare and contrast the spending behavior you’re seeing from the NOCs versus the IOCs?
Olivier Le Peuch: Thank you, Arun. I think if I were to characterize at the highest level, I think that we have seen significant traction in the last two years and rebound of investment internationally by the international company with a delay coming from the contractual nature and also from the investment execution decision for a national company. We anticipate national company to actually grow faster in — as we turn into 2024 led in particular by the Middle East region with leading NOCs clearly going. But I think the momentum we have gained, which was leading the pack to some extent in IOC in 2023. We expect due to the nature of our mix offshore exposure still a very solid exploration appraisal for a few of them will continue to give us momentum in the IOCs internationally.
And I will not forget about the international independents that have a market position, partly in some offshore markets, and they are continuing to execute on their plan. And so we are pleased, and I think we are looking forward to the national company accelerating their relatively speaking, their growth in 2024 compared to the IOCs.
