From an operating perspective, these still uncertain economic circumstances have induced Schlumberger Limited. (NYSE:SLB)’s customers to seek “much closer partnerships with us,” including “more collaborative problem solving utilizing our complementary expertise and further leveraging our wide technology offering, integration capabilities, and global footprint.”
A trio of key geographic venues
You’re generally familiar with the company’s most recent financial results, and its first-quarter report is looming on the horizon, and so I’ll move to a quick look at Kibsgaard’s assessment of a few of Schlumberger Limited. (NYSE:SLB)’s key markets. Let’s examine its status in the Middle East, Russia, and sub-Saharan Africa:
In looking to the Middle East, the CEO focused on Saudi Arabia and Iraq. The kingdom, where Schlumberger first began working in 1941, continues to expand its production efforts, with a rig count that is expected to reach 170 units this year. As is the case with, say, Mexico, Saudi Arabia provides an argument for an oilfield services component in Foolish energy portfolios. Outside services companies are permitted to participate in both countries’ exploration and production efforts, while none is permitted into Mexico, and only Chevron Corporation (NYSE:CVX) is involved upstream with Saudi Aramco.
Schlumberger’s base in Iraq is located in Rumaila, where it is staffed by nearly 1,000 engineers, operators, technical specialists, and petrotechnical experts. That locale is also the site of a BP plc (ADR) (NYSE:BP) -led effort to expand production on the country’s giant Rumaila field. Schlumberger Limited. (NYSE:SLB) anticipates generating approximately $600 million in revenue from Iraq this year.
In Russia, Schlumberger employs about 14,000 people, of whom 96% are Russian national (NYSE:NOV)s. The company is active off Sakhalin Island, in the Caspian Sea, as well as in Timano-Pechora, and Western Siberia. Its state-of-the-art seismic unit is already conducting marine surveys in the Kara Sea, where Rosneft is involved in partnerships with Exxon Mobil Corporation (NYSE:XOM) and Italy’s Eni SpA (ADR) (NYSE:E), among others.
To the energy industry, sub-Saharan Africa largely means Nigeria and Angola, although Schlumberger Limited. (NYSE:SLB) is active in 18 countries in that portion of the continent, which it serves from 84 operational bases. A portion of its 6,900 employees in the region are located in Angola’s Kwanza basin, which has recently been discovered to possess a deepwater pre-salt play, similar to Brazil’s Santos Basin. Before our planet’s continental shifts, those two areas appear to have been joined, hence the geologic similarities.
This is just a tiny sampling of the myriad of operating venues wherein Schlumberger is plying its trade. Among the more nascent areas where it is working, I would include the South China Sea, where it is involved in horizontal drilling for CNOOC Limited (ADR) (NYSE:CEO). And in Argentina’s unconventional — and promising — Vaca Muerta play, it’s in the early stages of an integrated services contract with Royal Dutch Shell plc (ADR) (NYSE:RDS.A).
The Foolish bottom line
We obviously could hopscotch to still other markets where Schlumberger is aiding national oil companies, international oil companies, and independent producers in their exploration and production efforts. But by now you probably get the message: A technological leader with a wide geographic representation, Schlumberger Limited. (NYSE:SLB) is unlikely to diminish in importance before oil and gas become insignificant to our world. That event is unlikely to occur in any of our lifetimes.
The article A Close Look at the King Kong of Oilfield Services originally appeared on Fool.com.
Fool contributor David Lee Smith owns shares of BP and recommends Chevron.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
