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Schlumberger revenue reached a new high of $42.15 billion in
2012—an increase of 14%—driven by robust exploration and
development both offshore and in key land markets. Outside
North America, revenue grew by 16%, the biggest increase
since 2008, while North America revenue grew by 9%, with
strong offshore activity in the US Gulf of Mexico outweighing
a challenging land market.
Global demand for oil recorded annual growth of some
0.8 million bbl/d for the second year running following the
exceptionally strong recovery of 2010. Lower demand in the
OECD countries through energy efficiency gains tempered
stronger growth in the non-OECD economies and in China in
particular. Oil supply grew by more than one million bbl/d in
North America as light tight oil production accelerated,
although this was partially offset by decline in a number of
non-OPEC countries. Within OPEC, production in Libya
continued to recover, leading to a slight increase in spare
capacity, which remained relatively slim. This, together with
ongoing geopolitical tension and the associated risk of supply
disruption, continued to support oil prices.
For natural gas, the three main markets continued to behave
independently. In North America, storage levels remained
at record highs throughout the year as a result of growing
domestic production and mild weather that pushed spot
prices down to 10-year lows in April. Toward the end of the
year, however, storage levels returned closer to historical
averages. In Asia, natural gas prices remained close to oil
parity, supported by sustained high demand in Japan follow-
ing the 2011 nuclear incident and by strong demand in China.
In Europe, lower demand was offset by declining domestic
supply and by the effect of higher Asian demand.
In this environment, all Schlumberger Areas made marked
contributions to highs in both revenue and income. Strong
international performance was led by the Europe/CIS/Africa
Area, where revenue was up 18%, mainly from strength in
Russia and in the Nigeria & Gulf of Guinea, Angola, East
Africa, and North Sea GeoMarkets. In Latin America, revenue
grew by 17%, driven by Integrated Project Management con-
tracts on land and activity for Wireline services and Drilling
Group product and services offshore—mainly in the Mexico
& Central America; Venezuela, Trinidad & Tobago; and
Ecuador GeoMarkets. Revenue in the Middle East & Asia Area
increased by 13% on strong results in the Saudi Arabia &
Bahrain, Australasia, Brunei, Malaysia & Philippines, and
China GeoMarkets. And in North America, revenue grew by
$1.2 billion to reach $13.5 billion, driven by a robust 38%
increase in demand for deepwater and exploration services
offshore, particularly in the US Gulf of Mexico. Revenue
from North America land also improved—by a modest 4%—
on strong demand for Production Group technologies,
although this was tempered by weakness in the hydraulic
fracturing market.
All Product Groups recorded double-digit growth. Reservoir
Characterization revenue of $11.4 billion increased by 15%,
with all Technologies also posting double-digit growth driven
by offshore exploration activity across the Areas. Drilling
Group revenue increased 15% to $16.0 billion, led by strong
growth in M-I SWACO, Drilling & Measurements, and Drilling
Tools & Remedial technologies. Production Group revenue of
$14.9 billion increased 13%, with double-digit growth in Well
Intervention, Completions, and Artificial Lift Technologies.
Well Services revenue also increased, primarily from
offshore activity.
In terms of health, safety, and the environment, 2012 was our
best year since 1998. Although any loss of life is tragic, we
reduced fatalities substantially, including those related to
driving. Injury rates and automobile accident rates also fell,
with our focus on driving safety beginning to show results.
The top Performed by Schlumberger award recognized one of
the major initiatives in this area, and you can read about the
journey management project later in this report. In other
activities, Schlumberger was one of the largest contributors
of papers at the leading biennial industry conference in
Perth, Australia, and received a top award for innovation for
our HSE for Youth program.
New technology across the portfolio contributed to results
in 2012. In Reservoir Characterization, we introduced
IsoMetrix* marine seismic technology that measures the
reflected wave in greater detail. It represents a major step
forward, particularly for applications in the exploration
Letter to Shareholders
