Oilfield services group SLB resists mounting pressure to exit Russia

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Oilfield services firm SLB is resisting growing pressure to exit Russia, telling investors that its operations do not violate new sanctions targeting the country’s oil sector.

SLBformerly known as Schlumberger, said on Friday that it is reviewing strict rules issued by the Biden administration last week that restrict the supply of US oil services to Russia. But the company’s chief executive Olivier Le Peuch told investors on a conference call that he believed its performance was now “in line with the new sanctions”.

The Houston-headquartered company has increased the contribution of its Russian operations to 4 percent of its global revenue by 2024, or about $1.4bn, from 5 percent in a year earlier.

SLB is coming under renewed pressure from US lawmakers to divest from Russia after imposing new sanctions aimed at curbing the flow of petrodollars used to support the Kremlin. war in Ukraine. In October a coalition of more than 50 members of Congress wrote to the Biden administration demanding tougher sanctions on US-based oil services companies operating in Russia, with the aim of forcing SLB out of the country .

SLB is among the few based in the US oil companies is still operating domestically after Moscow’s full-scale invasion of Ukraine in February 2022. The company’s two biggest western rivals, Baker Hughes and Halliburton, have sold their Russian operations to local administrators in 2022.

Le Peuch told analysts that SLB has taken voluntary steps to reduce its Russian operations, including halting exports of products and technology into the country from all SLB facilities worldwide by 2023.

“We are evaluating the new sanctions, and for now, we believe that our voluntary measures are in line with the new sanctions,” he added.

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

Oilfield service providers do much of the less fun work for the global oil and gas industry – everything from building roads and installing pipelines to drilling wells and pump out the waste. But they also provide access to advanced technologies essential to support the research and development of complex drilling operations.

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

Human rights groups and the Ukrainian government allege SLB’s work in Russia helps generate billions of dollars in oil revenue to support the Kremlin’s war effort. Last year, the National Anti-Corruption Agency of Ukraine added SLB to the list of people it does not know if they “support war around the world”.