Oilfield Services
Full-year 2011 revenue of $37.0 billion was 39% higher than 2010 primarily reflecting the acquisition of Smith on
August 27, 2010 as well as the significantly improved activity, pricing and asset efficiency for Well Services
Technologies in North America as the market transitioned to liquid-rich plays demanding increasing service intensity
in drilling and completing horizontal wells.
Year-on-year pretax operating margin increased 79 bps to 19.8% largely due to the improved pricing and asset
efficiency for Well Services Technologies in North America and the resumption of higher-margin activity in the US Gulf
of Mexico. However, the margin expansion was tempered by activity disruptions from the geopolitical unrest in North
Africa and in the Middle East during the first quarter of 2011.
Reservoir Characterization Group
Full-year revenue of $9.93 billion was 7% higher than the previous year on stronger Wireline activity, higher
WesternGeco marine and multiclient sales, and increased SIS software sales.
Year-on-year, pretax operating margin decreased 23 bps to 24.7% led by margin declines in Wireline and Testing
Services, largely due to the revenue mix, as well as the impact of geopolitical events which prevailed during the first
quarter of 2011. The margin decline however was partially offset by a favorable WesternGeco multiclient sales mix and
improved marine vessel utilization.
Drilling Group
Full-year revenue of $13.86 billion was 75% higher than the previous year reflecting the acquisitions of Smith, in
August 2010, and Geoservices, in April 2010, partially offset by a decrease in IPM activities in Mexico. The ramp-up of
IPM projects in Iraq also contributed to the revenue increase.
Year-on-year, pretax operating margin decreased 32 bps to 16.3% largely due to the addition of the Smith and
Geoservices activities as well as the effects of the geopolitical events.
Production Group
Full-year revenue of $13.14 billion was 40% higher than the previous year while pretax operating margin increased
525 bps to 20.1%. Well Services revenue and margins expanded strongly in North America on higher pricing, capacity
additions and improved asset utilization and efficiency as the market transitioned to liquid-rich plays. Internationally,
Well Services also posted growth on the strength of higher activity, despite the exceptional geopolitical events that
occurred during the first quarter of 2011.
Interest and Other Income
Interest and other income consisted of the following:
(Stated in millions)
2012
2011 2010
Interest income
$ 30
$ 40 $ 50
Equity in net earnings of affiliated companies:
M-I SWACO
–
– 78
Others
142
90 87
$172
$130 $215
Equity income from the M-I SWACO joint venture in 2010 represented eight months of equity income through the
closing of the Smith transaction.
Interest Expense
Interest expense of $340 million in 2012 increased by $42 million compared to 2011 primarily due to the $1 billion of
$1.25% Senior Notes due 2017 and $1 billion of 2.40% Senior Notes due 2022 that Schlumberger issued during 2012.
Interest expense of $298 million in 2011 increased by $91 million compared to 2010 primarily due to the $4.6 billion of
long-term debt that Schlumberger issued during 2011.
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