Schlumberger 2010 Annual Report - page 3

Schlumberger revenue in 2010 reached a new high of $27.45 billion, driven by strong activity in North America, steady
progress in international markets, and the acquisitions of Geoservices and Smith International. Oil demand consumption
averaged 87.7 million barrels per day in 2010, making the year-on-year increase the second largest in three decades, while
natural gas prices saw pressure from higher unconventional gas production in North America and a greater supply of
liquefied natural gas (LNG) around the world.
Within this market, Schlumberger Oilfield Services full-year revenue in 2010 of $22.08 billion grew 8% versus 2009, driven
by recovery in North America with increasing demand and stronger pricing for pressure pumping services. This Area also
benefited from greater activity in liquids-rich plays. Offshore, the tragic Macondo incident in the US Gulf of Mexico led
to a shutdown in deepwater operations that severely impacted revenue and led to slowdowns in other parts of the world.
Middle East and Asia Area revenue climbed 7% from a number of factors, including increasing Wireline logging and
expanded IPM work. Latin America revenue grew by 2%, with rapid growth in Brazil overcoming weaker activity in Mexico
as poor weather, increasing security concerns, and reduced client budgets impacted operations. Europe/CIS/Africa
revenue decreased 4% versus 2009. Among the Technologies, growth was primarily seen in Well Services activities,
both in volume and in price, although the acquisition of Geoservices also contributed to the increase.
In addition to growing activity, results were underpinned through continuing market penetration of new-technology
services such as Scope* advanced logging-while-drilling measurements, Scanner* wireline technologies, and ACTive*
coiled tubing services. Scanner services were boosted by the commercial introduction of the latest family member, the
Dielectric Scanner* multifrequency dielectric dispersion service. In reservoir production, ACTive real-time coiled tubing
services saw growth, particularly with ACTive conveyance of Wireline production logging technology and fiber-optic
continuous measurement of temperature and pressure along the wellbore. The growing deployment of integrated
technologies such as these highlights exciting growth possibilities across the Schlumberger technology portfolio.
It was, however, Drilling services that displayed early evidence of the opportunities provided by the acquisitions of
Geoservices and Smith International. These successes included the completion of a remote three-well exploration project
offshore Greenland that used Schlumberger technologies as well as Smith and M-I SWACO products and services and
Geoservices mud logging. In Brazil, a similar combination of services helped one well record substantial increases in rates
of penetration while meeting all directional drilling goals. In this particular case, the integrated nature of the bottomhole
assembly demonstrated how technology optimization can benefit performance in the high-cost deepwater drilling
environment. A third such operation offshore Indonesia further displayed the value of integrated bottomhole assemblies.
WesternGeco revenue of $1.99 billion in 2010 was 6% lower than 2009 primarily as a result of lower marine activity and
weaker pricing. While land activity was also weaker, strong multiclient sales, particularly in the fourth quarter, were
able to offset some of these effects. New seismic technology scored some significant successes with the penetration of
marine single-vessel, full-azimuth Coil Shooting* surveys into a number of the major offshore basins around the world.
Coil Shooting aquisition, unique to Schlumberger, brings better illumination of complex presalt, subsalt, and sub-basalt
formations in a variety of environments.
The integration of Geoservices and Smith International proceeded smoothly. The complementary nature of many of
our product and service lines helped the process as a network of integration teams and Area coordinators rapidly
identified revenue and cost-synergy opportunities that contributed to results in 2010 and that augur well for 2011.
Total Schlumberger 2010 results reflect four months of activity from the acquired Smith businesses, which contributed
revenue of $3.30 billion.
Letter from the Chairman
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