CEO Statement
Positioned for
outperformance
We are delivering innovation at speed and scale across the entire energy landscape. Paving a path to net zero and beyond.
2022 Annual Report
2022 was a pivotal year for our company and the global energy industry. The industry is undergoing a significant renaissance, driven by strong market fundamentals, urgency around energy security, and the growing imperatives of digitization and decarbonization. At the same time, we must balance the growing demand for energy with the need to rapidly reduce emissions in support of a net-zero future.
This has given us the opportunity to redefine who we are. Our company has always had a commitment to address the most difficult challenges in our industry and to continue pushing the limits of innovation. But given the need to drive energy security, affordability and sustainability, we need to transform and evolve.
This is why we announced our new identity, SLB, which cements our purpose as a global technology company focused on driving energy innovation for a balanced planet. It underscores our commitment to moving farther, faster in facilitating the world’s energy needs today—and shaping the energy systems of the future. And it puts our commitment to sustainability and our net zero commitments right at the heart of who we are.
To support this ambition, we have created a strategic roadmap to drive our three engines of growth: Core Oil and Gas, Digital, and New Energy. Our Core business is positioned to seize the ongoing upcycle, leveraging our global reach, technology differentiation, and customer intimacy to drive innovation. We are scaling our Digital strategy across the market and using our cloud technology to enhance efficiency. And we are seeding investments in New Energy to innovate at scale and build a diverse portfolio of businesses suited for different energy transition scenarios and time horizons.
With this strategy in place, we are positioned for both growth and returns, and we remain committed to achieving double-digit EBITDA, CAGR, ROCE, and FCF Margin through 2025. As we move forward on the path toward the energy transition, we do so with a clear roadmap for how we will execute our strategy. 2022 was a benchmark year as we put that strategy and vision in motion, and we are confident that we will continue to drive higher value for our customers, communities, shareholders and employees through 2023 and beyond.
Olivier Le Peuch
Chief Executive Officer
Against the backdrop of the energy crisis, constrained spare global capacity, and geopolitics, including the conflict in Ukraine and dislocation of supply flows from Russia, the need for increased investment has intensified.
These dynamics have sparked a supply-led upcycle that, coupled with long-term demand trends, will likely extend well beyond the middle of this decade. E&P operators are deploying capital in oil and gas to sustain or increase production, while at the same time adopting technologies and allocating capital to decarbonize their oil and gas operations. The total investment in energy transition has more than doubled over the past five years and, according to the International Energy Agency, is expected to more than double again by 2030.
Constructive market fundamentals, energy security, and the global urgency to accelerate energy transition will support increased investment in both lower-carbon oil and gas production and clean energy development for years to come.
Our roadmap: a returns-focused strategy designed to meet the current and future needs of customers and return value to shareholders. And with our goal of achieving net-zero carbon emissions intrinsically linked to this strategy, sustainability sits at the heart of everything we do.
Today, we are well-positioned with three engines of growth: Core, Digital, and New Energy.
Our Core is positioned to outperform the market and deliver further margin expansion through the cycle and beyond.
With SLB’s unmatched market breadth, best-in-class performance, and unique integration capabilities, we are prepared to seize the growth cycle. Our geographical positioning, with notable strength in Offshore, the Middle East, and North America, ensures balanced exposure across the cycle.
We are innovating for resilience and sustainability to deliver a higher-value, lower-carbon future. Within our Core business, SLB’s fit-for-basin strategy has accelerated technology customization for each operating area and brought even greater value to customers on a local level.
Through Digital we will completely redefine the future of energy and the future of SLB.
Digital is set to make a material impact on our industry by reducing cycle times and risk, accelerating returns, and increasing productivity while lowering costs and emissions. Our long-established installed software base, unrivaled customer intimacy, and unique partnerships create a solid foundation for success.
Our Delfi platform, the industry’s first integrated cloud platform, is primed for widespread adoption and growth in our core business and in adjacent and non-adjacent new and evolving markets.
Opportunities to create value for our customers will further fuel our growth as we guide the transition from established software applications to our digital platform. Customers will gain access to new and exciting resources, from data and collaboration tools from our cloud partners to our fully interconnected industry-leading simulators. Throughout this transition, they will continue to look to us for key services—such as data migration, workflow redesign, and transition—that are critical to their own digital journeys.
Through a combination of internal R&D and innovation, focused M&A, and partnerships, SLB is building a technology offering in New Energy that's unlike any other.
Our strategy for creating and scaling a diversified portfolio of businesses focused on decarbonization and clean energy technology will be key to the future. We are delivering technology solutions that address industrial and power generation emissions, which account for about half of global emissions, while ensuring we meet the world's need for accessible, reliable, and affordable energy.
Our New Energy business operates based on three key principles: impact and materiality, adjacency, and technology-led business models. We prioritize business opportunities based on market size and growth, emissions impact, and potential business size and we focus on opportunities that best leverage SLB's capabilities and experience, global reach, and customer base, to enable disruptive new solutions or drive economics.
Now more than ever, sustainability is non-negotiable. Upstream, midstream, and downstream operations make up around 5.2 GTCO2e—approximately 10 percent of global carbon emissions. At SLB, we welcome the critical role we play in decarbonizing oil and gas while exploring pathways to meet the growing energy demand.
As a symbol of our commitment to the challenge ahead, we’ve based our new identity on the carbon budget curve—the maximum net global CO2 emissions permissible to limit global warming to 1.5 degrees Celsius.
We are proud of the ambitious, science-based targets we committed to in 2021 to reach net-zero emissions by 2050, which include our Scope 3 emissions.
In 2022, we made significant advances with the launch of SLB End-to-end Emissions Solutions (SEES) and we’re taking bold steps in climate action, evolving our portfolio, making new investments, and empowering local communities to go further for a balanced planet. In the past year, SLB remained one of the highest-ranked companies in the energy industry across key environmental, social, and governance ratings agencies.
Strategic partners help SLB's emission reduction efforts to reach new heights. One example of this is our collaboration with Saudi Aramco to develop a digital platform for sustainability solutions in hard-to-abate industries. The platform will allow customers to collect, measure, report, and verify their emissions while also evaluating different decarbonization pathways.
Transition Technologies Our portfolio of Transition Technologies™ offers products and services built on rigorous technical methodology to quantify and reduce emissions. These technologies address emissions challenges across the spectrum, including methane emissions, flaring, well construction CO2 footprint, and solutions for electrification of production systems infrastructure and full field development.
In 2022 alone, SLB Transition Technologies helped avoid over 700,000 tonnes of CO2e emissions —the equivalent of taking almost 160,000 cars off the road. Our Transition Technologies portfolio is set to continue growing, and we expect it to surpass the $1 billion revenue mark in 2023.
IN FOCUS
The SLB fit-for-basin frac plug portfolio achieved significant market adoption milestones.
In 2022, the FracXion Micro™ fully composite frac plugs eclipsed 100,000 installations. Additionally, the full portfolio of ReacXion™ fully dissolvable frac plugs, an SLB footprint-reducing technology, achieved 50,000 installations and lowered operators’ CO2e emissions by reducing diesel consumption by an estimated 5.7 million liters. These technologies represent how SLB creates new opportunities by understanding customer needs to amplify our sustainability impact and reduce our customers’ cost to operate.
We have a bold vision for what energy can be—and with our technology and expertise, we are delivering on it.
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