Reuters: SLB restricts activities in Russia due to tougher sanctions

The American oilfield service company SLB (formerly Schlumberger) has made a number of operational and structural changes to its business in Russia to keep it amid tightening sanctions, writes Reuters.

In particular, the company banned its employees in the Russian Federation from accessing certain software, messaging systems and data stored in the US and the UK. These actions were taken after Reuters reported in January that SLB was expanding its operations in the Russian Federation due to the departure of competitors.

According to the agency, after the start of the special operation in Ukraine, the number of SLB staff in Russia decreased from 10,000 to 9,600 people, and the share of the Russian market in the group’s total revenue decreased from 6% to 5%.

SLB CEO Olivier Le Peche also warned employees of a reduction in activities in the Russian Federation due to “market conditions” and the company’s steps taken, including a ban on new investments and the introduction of technologies.

“For now, we believe the best way forward for all stakeholders is to continue working in Russia as long as we can do so in full compliance with international sanctions,” he said.

By data consulting agency Yakov & Partners (formerly McKinsey in Russia), foreign companies accounted for 20% of the entire Russian oilfield services market in 2021. Another 50% is accounted for by the structures of the largest oil companies in the Russian Federation, 20% – by large independent oilfield service companies and another 10% – by medium and small oilfield services.

According to analysts, the level of oil production in Russia in 2030 may remain above 500 million tons per year if it is possible to replace critically important imported technologies. Without import substitution, production could be reduced by 20% by 2030. In 2022, Russian oilmen produced 535 million tons of oil. Thus, production may fall down to 428 million tons.