Schlumberger revenue in 2013 climbed to a record $45.3 billion,
up 8%, and growing for the fourth consecutive year. International
revenue grew by $3.2 billion, or 11%, on higher exploration and
development activity—both offshore and in key land markets. In
North America, we demonstrated continued resilience in the
challenging land market by growing the business by close to
$400 million, or 3%, aided by our strong position in the offshore
market—particularly in the US Gulf of Mexico.
Yearly growth in global oil demand has been stabilizing at close
to one million barrels per day for the past three years. This has
been driven by the emerging economies, noticeably in Asia and
in the Middle East, while consumption in the OECD countries
has leveled after declining for three consecutive years as a result
of energy efficiency gains. In terms of supply, markets are well
balanced, with North America benefiting from the activity-
intensive development of tight oil resources that almost
single-handedly drove the increase in global crude oil production
in 2013. Output from other areas, both OPEC and non-OPEC,
remained stable. In terms of price, geopolitical and security
tensions in the Middle East and major outages in Libya
supported oil prices with spot Brent averaging $109/bbl in 2013,
only slightly below the $112/bbl of 2012.
International gas markets remained tight during the year, driven
by strong demand growth in Japan and emerging economies in
Asia. Relatively limited additional LNG and interregional
pipeline capacity contributed to support prices at oil parity in
the Asian spot markets and at levels corresponding to the long-
term price formulas in Europe. In North America, after having
reached a 10-year low in 2012, natural gas spot prices rallied by
35% in 2013 from a progressive rebalancing of supply and
demand as well as from relatively cold temperatures in the final
months of the year. Steady production levels—particularly
from the continuing development of the Marcellus Shale gas
play—together with strong competition with coal in the power
sector prevented prices from rising further.
Against this background, the strength of our international
performance during the year was led by the Middle East & Asia
Area, which grew by 23% from an expanding portfolio of projects
and activities in key land markets in the Middle East, increased
exploration and development work across Asia, and sustained
activity in Australasia and China. Within the Europe, CIS &
Africa Area, year-on-year revenue grew by 8%, led by the Russia
and Central Asia region on strong land activity in West Siberia
and robust offshore project work in Sakhalin. The Latin America
Area grew by 3% over the year, mainly because of good progress
on the Shushufindi production management project in Ecuador
and strong integrated project management activity in Argentina.
In North America, revenue strengthened by 3%, driven by higher
offshore drilling and exploration activity.
All three product groups benefited from the growth in activity.
Reservoir Characterization revenue grew by 10% over the year
from market share gains and higher exploration activity in
offshore and key international land markets. Drilling Group
revenue, up 9%, increased on robust demand for services as
offshore drilling activity strengthened in the US Gulf of Mexico,
Sub-Saharan Africa, Russia, and the Middle East & Asia Area.
Drilling Group revenue also increased in key international land
markets in Saudi Arabia, China, and Australia on higher rig
count. Production Group revenue grew by 8%, mostly from
activity in the international GeoMarket* regions.
In terms of health, safety, and the environment, we made further
progress in 2013, building on the strong safety performance of
2012. But in spite of this, we still suffered several fatalities,
generally associated with contractor driving, and we are working
relentlessly to prevent these tragic losses from occurring in the
future. Injury rates and automobile accident rates fell in 2013,
largely as a result of our continued focus on driving safety as well
as on injury prevention programs. As an extension to our Journey
Management Program, we opened a new Global Journey
Management Center in Kuala Lumpur, Malaysia, in October.
New technology sales were strong across all groups, offering
opportunities for higher pricing in almost all markets as
customers seek new approaches to old challenges. The Wireline
Saturn 3D radial fluid sampling probe, for example, has enjoyed
one of the most rapidly growing deployments of new formation
evaluation technology for a number of years. The Saturn probe
extends formation testing to the previously inaccessible fluids
and reservoir environments of low-permeability formations,
heavy-oil reservoirs, unconsolidated formations, near-critical
fluids, and rugose boreholes in today’s complex developments.
Among Drilling Group technologies, innovative new drill bits
enjoyed significant market penetration. Drill bits equipped with
Stinger* conical diamond elements for stability and improved
Letter to Shareholders
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