In a report citing company records and people familiar with the issues, Reuters details how SLB (formerly Schlumberger), the largest oil-field firm in the world, has enjoyed immense success in its Russia operations, as it has cherry-picked service and equipment contracts which had been dropped by Western competitors as they rushed to pull out of the nation following the possibility the West would impose Ukraine-related sanctions after the Russian military action in Ukraine.
In March, following the invasion of Ukraine in late February, SLB announced it had plans to immediately suspend new technology deployment and cease further investment in its Russian operations, due to “immense concern” of the company over the “escalating conflict in Ukraine.”
However even as it has endured criticism for continuing its operations in Russia, SLB has expanded its activities in the sanctioned nation and only seen its revenues increase as a result, over the past year.
Between July and October of 2022, the company’s reservoir performance division in Russia and Central Asia saw revenues grow by 25% compared to the previous quarter. That was a significantly increased rate of growth over the 12% and 11% growth seen in the Asian, Middle Eastern, and North African regions, according to company records viewed by Reuters.
The US based firm, previously known as Schlumberger last October, is expecting it will produce all-time record profits in the fourth quarter in its Russian reservoir performance division, according to a separate presentation viewed by the outlet.
As it is doing this, the company is not actually violating any sanctions imposed on Russia, since all of the sanctions are designed to avoid adversely impacting total production of crude by Russia, due to the effects that would occur in world oil markets if one of the world’s biggest crude producers were to see their production reduced to any degree. So the company is free to help Russia produce oil without any cost, unlike companies which are involved in selling and transporting that oil to other nations.
In late 2022, SLB added 70 employees in Russia, including additional employees to handle its most important accounts, such as those of Gazprom ad Rosneft, according to sources with knowledge of the matter. The multinational oil giant employs roughly 10,000 workers in Russia and neighboring Kazakhstan, which comprises about 10% of its global workforce.
Of SLB’s total revenue, Russia produced roughly 6%, or $1.21 billion in the first nine months of the last year, according to regulatory filings. It is expected the company is preparing to increase its operations in the country by the summer.