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Schlumberger revenue reached $39.54 billion in 2011, reflecting a full year of revenue from the Smith and Geoservices businesses
acquired in 2010. At the same time, market conditions were positive, driven by improved worldwide activity.
After the huge increase in oil demand in 2010, consumption grew by a more modest 0.7 million barrels per day in 2011 as a result
of economic concerns in the OECD countries, lower growth in the emerging economies, the year’s geopolitical unrest, and the
global economic uncertainty that reemerged late in the summer.
Natural gas markets showed distinct regional behavior. In North America, increasing supply and mild winter weather kept natural
gas prices low, while in Asia the need for alternative energy sources following the Fukushima incident along with fast-growing
demand in non-OECD economies maintained prices high. In Europe, prices continued to be supported by Asian demand and
production decline in the North Sea.
In this environment, Schlumberger Oilfield Services revenue reached a historical high in 2011 of $37 billion. North America, which
grew by 82% compared with 2010, saw increased activity, stronger pricing, and improved asset efficiency as the market continued
to shift to liquids-rich plays that demanded higher service intensity. A gradual return to activity in the deepwater US Gulf of Mexico
also contributed to North American results. International growth of 24% was marked by strengthening activity in deepwater areas
and active exploration basins as well as by signs of pricing traction for certain Technologies. In Latin America, revenue growth of
29% was driven by drilling and production activity. Europe, CIS, and Africa revenue grew by 22% through strength in the North Sea
and Russia, but suffered the most in terms of the geopolitical unrest that affected North Africa and the Middle East. Revenue in
the Middle East and Asia Area increased by 21%, driven by improving activity in Iraq and Saudi Arabia, although these improve-
ments were slowed by geopolitical unrest in the area.
All three Product Groups benefited from the improved activity. The most substantial gain (73%) was recorded by the Drilling Group
due largely to the full year’s revenue from the acquisitions of Smith International and Geoservices. However, this was also under-
pinned by growth across almost all Drilling Group Technologies, driven by activity and pricing gains. The ramp-up in IPM well con-
struction projects in Iraq also contributed to the growth. Reservoir Production grew by 41%, led by Well Services in North America
through higher pricing, capacity additions, and improved asset utilization and efficiency as the market transitioned to liquids-rich
plays. Reservoir Characterization grew by 7%, led by Wireline on activity mix and WesternGeco on higher multiclient seismic sales.
In terms of health, safety, and the environment, 2011 was a year of contrast. Statistically, some key figures improved, while others
declined. No contractor loss of life was recorded, and the Arab Spring brought no physical harm to employees or their dependents.
However, we still suffered an unacceptably high number of fatalities—particularly driving related—and this remains our number
one exposure. In 2012 we must continue to place an even stronger focus on driving safety.
Market penetration of new technologies contributed to the year’s performance. In reservoir characterization services, the growing
wave of exploration projects increased demand for the Wireline Scanner Family* measurements that provide more complete under-
standing of difficult and complex formations. In many cases these were complemented by InSitu Fluid Analyzer* and Quicksilver
Probe* formation fluid testing and sampling services, while other advanced Wireline technologies were used in the evaluation of
unconventional reservoirs. WesternGeco benefited from this trend with new contracts for Coil Shooting* and Dual Coil Shooting*
full-azimuth seismic acquisition surveys, a type of survey unique to Schlumberger.
Further integration of Schlumberger and Smith drilling technologies boosted Drilling Group results. This included growing use of
Smith IDEAS* modeling software that enables better matching of drill bits to rotary-steerable systems. In addition, Smith drillbit
technologies benefited from the larger Schlumberger geographical footprint, while Drilling & Measurements Scope* Family logging-
while-drilling services played significant roles in enhancing performance in a number of complex, high-profile wells.
Letter to Shareholders
