The amounts above exclude accrued interest and penalties of $210 million, $168 million and $136 million at
December 31, 2010, 2009 and 2008 respectively. All of the unrecognized tax benefits, if recognized, would impact the
Schlumberger effective tax rate.
Schlumberger classifies interest and penalties relating to uncertain tax positions within
Taxes on income
in the
Consolidated Statement of Income
. During 2010, 2009 and 2008, Schlumberger recognized approximately $42 million,
$32 million and $25 million in interest and penalties, respectively.
The following table summarizes the tax years that are either currently under audit or remain open and subject to
examination by the tax authorities in the most significant jurisdictions in which Schlumberger operates:
Brazil
2004 – 2010
Canada
2003 – 2010
Mexico
2005 – 2010
Norway
2003 – 2010
Russia
2007 – 2010
Saudi Arabia
2001 – 2010
United Kingdom
2008 – 2010
United States
2005 – 2010
In certain of the jurisdictions noted above, Schlumberger operates through more than one legal entity, each of which
has different open years subject to examination. The table above presents the open years subject to examination for the
most material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically
not closed until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of
limitations can extend beyond the open years subject to examination.
15. Leases and Lease Commitments
Total rental expense was $1.2 billion in 2010, $1.0 billion in 2009, and $1.1 billion in 2008. Future minimum rental
commitments under noncancelable operating leases for each of the next five years are as follows:
(Stated in millions)
2011
$ 325
2012
242
2013
167
2014
124
2015
99
Thereafter
377
$1,334
16. Contingencies
In 2007, Schlumberger received an inquiry from the United States Department of Justice (“DOJ”) related to the DOJ’s
investigation of whether certain freight forwarding and customs clearance services of Panalpina, Inc., and other
companies provided to oil and oilfield service companies, including Schlumberger, violated the Foreign Corrupt
Practices Act. Schlumberger is cooperating with the DOJ. Schlumberger is cooperating with the governmental
authorities and is currently unable to predict the outcome of this matter.
In 2009, Schlumberger learned that United States officials began a grand jury investigation and an associated
regulatory inquiry, both related to certain Schlumberger operations in specified countries that are subject to United
States trade and economic sanctions. Also in 2009, Smith received an administrative subpoena with respect to its
historical business practices in certain countries that are subject to United States trade and economic sanctions.
Schlumberger is cooperating with the governmental authorities and is currently unable to predict the outcome of these
matters.
On April 20, 2010, a fire and explosion occurred onboard the semisubmersible drilling rig
Deepwater Horizon
, owned
by Transocean Ltd. and under contract to a subsidiary of BP plc. Pursuant to a contract between M-I SWACO and BP, M-I
SWACO provided certain services under the direction of BP. A number of legal actions, certain of which name an M-I
SWACO entity as a defendant, have been filed in connection with the
Deepwater Horizon
incident, and additional legal
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