2
drilling speed have already made more than 1,100 runs in North
America alone, achieving an average improvement of 15% in rate
of penetration since their introduction in the first quarter. In
the second quarter, we commercialized ONYX 360* rotating
cutters, which will lead to major improvements in bit run lengths
in abrasive formations. Our success in integrating a number of
distinct drillbit technologies, either developed in house or added
to our portfolio through acquisition, has been significant, and
Schlumberger is now recognized as the leading drillbit supplier
in the industry.
In the Production Group, we conducted a number of field
experiments and started field testing new technologies designed
to significantly improve the efficiency of how we fracture
horizontal shale wells in North America to increase production
while reducing water consumption and hydraulic horsepower.
These technologies will be components of the BroadBand*
unconventional reservoir completion technique, which includes
both engineered fluid systems and completion hardware to be
introduced gradually to the market in the coming year. In
another Production Group development, we acquired a number
of rod pump companies operating in the key liquid-producing
shale basins in North America. This technology will be
integrated with our existing Artificial Lift business to provide
life-of-the-well artificial lift solutions that leverage our
production engineering expertise and extensive monitoring and
data integration capabilities.
During the first half of the year, we completed the OneSubsea
joint venture with Cameron, combining our deep understanding
of the reservoir and our industry-leading well completions,
subsea processing, and integration capabilities with the design
capability, manufacturing excellence, and installation record of
Cameron. From this comprehensive foundation, OneSubsea
offers best-in-class subsea solutions by optimizing complete
subsea production systems that help customers improve subsea
development production and recovery.
In line with our belief that the size of Schlumberger now
represents a significant strength, we have begun implementa-
tion of a series of transformational initiatives designed to
leverage both the size of our operations and the breadth of our
offerings to generate a further competitive advantage. We are
already seeing how better asset management, personnel deploy-
ment, and improved reliability of field technical equipment can
bring sustainable gains in both efficiency and quality. Looking
forward, we believe that transforming our organization to make
our size and breadth help improve performance and lower risk
will further differentiate us as a company.
Looking ahead at 2014, we expect economic fundamentals to
further improve in the US while Europe seems set for stronger
growth. These positive effects should overcome lower growth in
some developing economies and support a continuing rebound
in the world economy. Within this scenario, oil demand forecasts
in 2014 have now been revised upward to the highest growth
rate in several years. Oil supply is expected to keep pace with
demand, with the market remaining well balanced. Natural gas
prices internationally should be supported by demand in Asia
and Europe, while in the US we see no change in fundamentals,
with any meaningful recovery in dry gas drilling activity still
some way out in the future.
The quality of our results in 2013 was driven by strong new
technology sales and an unwavering focus on execution and
resource management. With E&P spending expected to grow
further in 2014, led by international activity and continuing
strength in deepwater US Gulf of Mexico, we remain positive and
optimistic about the year ahead on the back of a well-balanced
business portfolio, wide geographical footprint, and our
strengthening operational, organizational, and executional
capability.
I would like to thank our customers for their confidence and
support, and our employees for their commitment and their
continued focus on execution through integration, quality,
and efficiency.
Paal Kibsgaard
Chief Executive Officer
