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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

Commission File Number 1-4601

img113994210_0.jpg 

Schlumberger N.V. (Schlumberger Limited)

(Exact name of registrant as specified in its charter)

 

Curaçao

52-0684746

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

42 rue Saint-Dominique
Paris, France

75007

5599 San Felipe, 17th Floor
Houston, Texas, United States of America

77056

62 Buckingham Gate

London, United Kingdom

 

SW1E 6AJ

 

 

 

Parkstraat 83
The Hague, The Netherlands

2514 JG

(Addresses of principal executive offices)

(Zip Codes)

Registrant’s telephone number including area code, is: (713) 513-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SLB

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES NO

As of June 30, 2023, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $69.70 billion.

As of December 31, 2023, the number of shares of common stock outstanding was 1,427,394,843.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required to be furnished pursuant to Part III of this Form 10-K is set forth in, and is incorporated by reference from, the registrant’s definitive proxy statement for its 2024 Annual General Meeting of Shareholders, to be filed by the registrant with the Securities and Exchange Commission (“SEC”) pursuant to Regulation 14A within 120 days after December 31, 2023 (the “2024 Proxy Statement”).

 

 


 

SCHLUMBERGER LIMITED

Table of Contents

Form 10-K

 

 

Page

 

 

 

PART I

 

 

 

 

Item 1.

Business

3

 

 

 

Item 1A.

Risk Factors

10

 

 

 

Item 1B.

Unresolved Staff Comments

14

 

 

 

Item 1C.

Cybersecurity

14

 

 

 

Item 2.

Properties

15

 

 

 

Item 3.

Legal Proceedings

15

 

 

 

Item 4.

Mine Safety Disclosures

15

 

 

 

PART II

 

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

16

 

 

 

Item 6.

[Reserved]

17

 

 

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

 

 

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

28

 

 

 

Item 8.

Financial Statements and Supplementary Data

29

 

 

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

60

 

 

 

Item 9A.

Controls and Procedures

60

 

 

 

Item 9B.

Other Information

60

 

 

 

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

60

 

 

 

PART III

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

61

 

 

 

Item 11.

Executive Compensation

61

 

 

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

61

 

 

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

61

 

 

 

Item 14.

Principal Accounting Fees and Services

61

 

 

 

PART IV

 

 

 

 

Item 15.

Exhibits and Financial Statement Schedules

62

 

 

 

Item 16.

Form 10-K Summary

65

 

 

 

 

Signatures

66

 

 

 

 

Certifications

 

 

2


 

PART I

 

Item 1. Business.

All references in this report to “Registrant,” “Company,” “SLB,” “we” or “our” are to Schlumberger Limited (Schlumberger N.V.) and its consolidated subsidiaries.

We are SLB, a global technology company driving energy innovation for a balanced planet. With a global presence in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating energy technology, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition.

Today, the world faces the challenge of providing secure and affordable energy to meet growing demand, while rapidly decarbonizing for a sustainable future. With nearly a century of market and technology leadership, SLB is well positioned and committed to being a leader in providing solutions to address this trilemma.

 

In October 2022, we changed our brand name to SLB and unveiled a new logo that underscores our vision for a decarbonized energy future. This bold change highlighted our leadership as a global technology company focused on driving energy innovation within traditional energy sources and beyond. The SLB brand builds on nearly a century of technology innovation and industrialization. Our identity symbolizes SLB's commitment to moving farther and faster in facilitating the world's energy needs today and forging the road ahead for a sustainable future.

SLB is organized under four Divisions that combine and integrate SLB’s technologies, enhancing our ability to support the emerging long-term growth opportunities in each of these market segments. The four Divisions are:

Digital & Integration
Reservoir Performance
Well Construction
Production Systems

Digital & Integration – Combines SLB’s industry-leading digital solutions and data products with its integrated offering of Asset Performance Solutions (“APS”). This Division enables greater performance for our customers by reducing cycle times and risk, accelerating returns, increasing productivity, and lowering costs and carbon emissions.

The primary offerings comprising this Division are:

Digital solutions: Includes products, services, and solutions that span the energy value chain from subsurface characterization through field development and hydrocarbon production to carbon management and the integration of adjacent energy systems. Offerings are founded upon proprietary and open-source data platform technologies, industry-leading simulators and workflow tools, and include domain-specific application of innovative digital capabilities, such as artificial intelligence and machine learning. Solutions are deployable on traditional on-premise IT infrastructures, the cloud, and the edge, allowing for full market coverage irrespective of customer constraints.
Exploration data and data processing: Provides comprehensive worldwide reservoir interpretation and data processing services, enabled by a scientifically advanced platform and innovative subsurface imaging techniques for exploration data, and includes one of the industry’s most extensive exploration data libraries.
Asset Performance Solutions: Offers an integrated business model for field production projects. Combines SLB’s services and products with drilling rig management and specialized engineering and project management expertise, to provide a complete solution from well construction to production improvement. As of December 31, 2023, SLB’s APS portfolio primarily consisted of three field production projects in Ecuador and one in Canada.

Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to optimizing reservoir productivity and performance. Reservoir Performance develops and deploys innovative technologies and services to evaluate, intervene, and stimulate reservoirs providing customers with greater insights into their assets and maximizing their return on investment.

The primary offerings comprising this Division are:

Wireline: Provides the information necessary to evaluate subsurface geology and fluids to plan and monitor well construction and to monitor and evaluate well production through both openhole and cased hole services, including wireline logging and perforating.
Testing: Provides exploration and production pressure and flow-rate measurement services both at the surface and downhole supported by a network of laboratories that facilitate rock and fluid characterization.
Stimulation and Intervention: Provides services used during well completions, as well as those used to maintain optimal production throughout the life of a well, including pressure pumping, well stimulation, and coiled tubing equipment for downhole mechanical well intervention and coiled-tubing drilling, reservoir monitoring, and downhole data acquisition.

3


 

Well Construction – Combines the full portfolio of products and services to optimize well placement and performance, maximize drilling efficiency, and improve wellbore assurance. Well Construction provides operators and drilling rig manufacturers with services and products related to designing and constructing a well.

The primary offerings comprising this Division are:

Drilling & Measurements: Provides mud logging services for geological and drilling surveillance, directional drilling, measurement-while-drilling, and logging-while-drilling services for all well profiles as well as engineering support.
Drilling Fluids: Supplies individually engineered drilling fluid systems that improve drilling performance and maintain well control and wellbore stability throughout drilling operations.
Drill Bits: Designs, manufactures, and markets roller cone and fixed cutter drill bits for all drilling environments.
Drilling Tools: Includes a wide variety of bottomhole assembly and borehole enlargement technologies for drilling operations.
Well Cementing: Provides products and services that secure and protect well casings while isolating fluid zones and maximizing wellbore activity.
Integrated Well Construction: Provides integrated solutions to construct or change the architecture (re-entry) of wells, including well planning, well drilling, engineering, supervision, logistics, procurement and contracting of third parties, and drilling rig management.
Rigs and Equipment: Provides drilling equipment, including pressure control equipment and rotary drilling equipment, and services for shipyards, drilling contractors, operators, and rental tool companies, as well as land drilling rigs and related services.

Production Systems – Develops technologies and provides expertise that enhance production and recovery from subsurface reservoirs to the surface, into pipelines, and to refineries. Production Systems provides a comprehensive portfolio of equipment and services including subsurface production systems, subsea and surface equipment and services, and midstream production systems.

The primary offerings comprising this Division are:

Artificial Lift: Provides production equipment and optimization services using electrical submersible pumps, gas lift equipment, progressing cavity pumps, and surface horizontal pumping systems.
Completions Equipment: Supplies well completion services and equipment that include packers, safety valves, and sand control technology, as well as a range of intelligent well completions technology and equipment.
Surface: Designs and manufactures onshore and offshore platform wellhead systems and processing solutions, including valves, chokes, actuators, and surface trees, and provides services to operators.
Valves: Serves portions of the upstream, midstream, and downstream markets and provides valve products that are primarily used to control and direct the flow of hydrocarbons as they are moved from wellheads through flow lines, gathering lines, and transmission systems to refineries, petrochemical plants, and industrial centers for processing.
Processing: Enables efficient monetization of subsurface assets using standard and custom-designed onshore, offshore, and downstream processing and treatment systems, as well as unique, reservoir-driven, fit-for-purpose integrated production systems for accelerating first production and maximizing project economics.
OneSubsea: Provides integrated solutions, products, systems, and services for the subsea market, including integrated subsea production systems involving wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors and services designed to maximize reservoir recovery and extend the life of each field.

 

On October 2, 2023, SLB, Aker Solutions (“Aker”), and Subsea7 closed their previously announced joint venture. The new business, OneSubsea, will drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time. OneSubsea now comprises SLB’s and Aker’s subsea businesses, which include an extensive complementary subsea production and processing technology portfolio, world-class manufacturing scale and capacity, access to industry-leading reservoir and digital domain expertise, unique pore-to-process integration capabilities, and strengthened research and development capabilities. SLB owns 70% of the joint venture, while Aker owns 20% and Subsea7 owns 10%. As the majority owner and controlling entity, SLB is considered the acquirer and reflects OneSubsea as a consolidated subsidiary in its Consolidated Financial Statements.

SLB's four Divisions operate through a geographical structure of four Basins that are aligned with critical concentrations of activity: Americas Land, Offshore Atlantic, Middle East & North Africa, and Asia. The Basins are configured around common regional characteristics that enable us to deploy fit-for-purpose technologies, operating models, and skills to meet the specific customer needs in each Basin. The Basins are further organized into GeoUnits, which can be a region, a single country, or made up of several countries. With a strong focus on customers, the Basins identify opportunities for growth, and are focused on agility, responsiveness, and competitiveness.

Supporting the Divisions is a global network of research and development centers. Through these centers we advance SLB’s technology programs to enhance industry efficiency, lower finding and producing costs, improve productivity, maximize reserve recovery, and increase asset value safely, securely, and sustainably. These centers also support SLB's New Energy investments in lower carbon energy sources and carbon capture technologies.

4


 

Corporate Strategy

The evolving marketplace will require bold new technologies and ideas, digital transformation and a deep commitment to sustainability. With a balanced energy transition in mind, our strategy is focused on three engines of growth: Core, Digital and New Energy.

Core

Consisting of our Reservoir Performance, WeIl Construction and Production Systems Divisions, Core remains SLB’s largest engine of growth. Building on decades of technology advancement, we will continue innovating new products, services and technologies that make the exploration, development and production of oil and gas assets cleaner, more resilient, and more efficient, with lower carbon emissions and less impact on the environment.

We continue to build on our fit-for-basin approach and technology access initiatives, developing bespoke and custom technology tailored to the regions and environments in which we operate. This strategy allows us to address the rapid evolution of our industry into more regional markets, each with distinct resource plays and economics.

With the continued growth of digitally enabled technologies that improve efficiency and performance, including our Transition Technologies™ portfolio and our SLB End-to-end Emissions Solutions (SEES) methane elimination business, SLB provides solutions that enable customers to increase production from their reserves at a competitive cost and at a lower carbon intensity per barrel equivalent.

Digital

Digital capabilities continue to grow throughout the energy industry as a key element of the complex systems required to meet current energy demand and to harness the promise of a lower-carbon future. SLB is uniquely positioned to support customers on their digital journeys by managing data migration, workflow redesign, and transition to the cloud.

SLB’s customers have access to leading digital products and services that help to meet their sustainability goals by driving transparency, better measurement, more effective planning, and more impactful and reliable outcomes. To continue elevating customer offerings, we are accelerating the adoption of our proprietary cloud offering Delfi™, enabling enterprise data management, delivering autonomous operations, and innovating through domain-driven artificial intelligence.

Our cloud-based solutions allow our customers to transition from our established software applications to our Delfi digital platform, and shift from a user-based license model to software-as-a-service (SaaS) subscriptions. This enables customers to evolve from legacy infrastructure and deliver new levels of value creation, with access to key resources such as storage and computing from our cloud partners and access to our industry-leading simulators. Our evolving offering of on-premises solutions allows us to support the digital transition journey of customers that prefer or are required to maintain data solutions locally.

New Energy

New Energy offers a significant opportunity to use SLB’s experience and scale to drive innovation for a low-carbon economy spanning industries beyond oil and gas. We are building a broad, diverse portfolio across New Energy sectors, selected for their materiality and adjacency to existing SLB strengths and our ability to offer differentiated technology.

Our New Energy portfolio builds on several fundamental SLB strengths: our unique subsurface domain expertise, applicable beyond oil and gas; our ability to design and deploy complex processing and production systems as an original equipment manufacturer; our differentiated track record for innovation and industrialization; and our ability to deploy at scale in any region of the world with local knowledge and talent.

SLB will continue building businesses and forging partnerships across various industries to focus on five key areas: carbon solutions, hydrogen, geothermal and geoenergy, stationary energy storage, and critical minerals. Our ambition is to seed technology capabilities in each of these domains, and then grow throughout the decade, ultimately scaling our New Energy offering into the Company’s fastest growing and largest division.

Carbon Solutions: Carbon capture, and sequestration (“CCS”) is critical to advancing decarbonization and achieving the goals of the Paris Agreement on climate change. With industry-leading reservoir modeling capabilities, SLB has been in the CCS business for more than three decades. The Company is actively progressing CCS technologies to enable widespread adoption of CCS and is going beyond subsurface characterization and well construction to include capture technology, project economics, technology selection, and permitting. In addition, SLB is developing digital platforms to support emissions management for carbon and methane that will allow clients to measure, monitor, and plan abatement strategies.

Hydrogen: SLB is investing in low-carbon hydrogen generation technologies. One such investment is Genvia, a unique private-public partnership that combines SLB’s expertise and experience with that of the French Atomic Energy and Alternative Energies Commission and partners. Genvia aims to deliver the most efficient and cost-effective solid oxide electrolyzer technology for producing clean hydrogen in hard-to-abate industrial settings—a key component of the energy transition.

5


 

Geothermal and Geoenergy: Geothermal power leverages the heat of the earth to generate electricity or provide heat directly, by tapping into subsurface hot water and steam zones that are continuously recharged, both naturally and by injection. Geoenergy uses the ambient temperatures beneath the earth's surface to act as a thermal battery and dramatically reduce energy consumption from heating and cooling buildings, electrify and, therefore, drive both efficiency and decarbonization.

Stationary Energy Storage: Stationary energy storage is a key enabler to make variable renewable energy sources (such as solar or wind) a larger component of the world’s electricity systems enabling power to be delivered in the right place, at the right time, to meet demand. As renewables become a greater percentage of the energy mix, the need increases for additional long-duration energy storage to ensure the efficiency of renewable assets and the reliability of electricity systems.

Critical Minerals: SLB is applying its knowledge of extraction technologies and processing to the location and sources of critical minerals, such as lithium from brine deposits, that will be required to support the energy transition.

Sustainability

SLB’s emissions reduction strategy is at the center of our identity and vision, and our commitment to a sustainable future is underscored by bold science-backed targets aligned with the Paris Agreement. In 2021, SLB became the first company in the energy services industry to commit to a 2050 net-zero greenhouse gas (“GHG”) emissions target including all three emission scopes.

 

By setting targets based on SLB’s total 2019 baseline GHG footprint—inclusive of Scope 3 emissions (which accounted for approximately 95% of SLB’s baseline)—and not just its Scope 1 and 2 footprint, SLB’s comprehensive emissions reduction roadmap addresses the entire energy value chain.

SLB’s 2050 net-zero target is supported by the following interim milestones, using 2019 as the baseline year:

- by 2025, a 30% reduction in Scope 1 and Scope 2 emissions;

- by 2030, a 50% reduction in Scope 1 and Scope 2 emissions; and

- by 2030, a 30% reduction in Scope 3 emissions.

SLB’s Scope 1 and 2 emissions primarily come from fuel use and electricity consumption. SLB’s Scope 3 emissions are indirect, such as emissions from customers’ use of SLB technology and emissions from our use of third-party goods and services.

There are three key components to SLB achieving the 2050 net-zero target: reducing operational emissions, reducing customer emissions that occur while using SLB technology, and taking carbon-negative actions of sufficient scale to offset any residual operating and technology emissions that the Company may have in 2050.

In tandem with our 2050 net-zero commitment, SLB introduced a portfolio of Transition Technologies™ in 2021. This portfolio includes a select group of products and services that quantifiably reduce our customers’ GHG emissions footprint, while continuing to drive high performance, reliability, and efficiency. This portfolio is supported by an industry-leading impact quantification framework and will continue to grow as sustainability is further embedded in the Company’s research and development process.

Human Capital

As a leading global technology company that operates in more than 100 countries with a workforce of approximately 111,000 people from diverse backgrounds, cultures, and nationalities, one of SLB’s greatest strengths is the diversity of our people. We believe that our ability to attract, develop, motivate, and retain a highly competent and diverse workforce has been paramount to our success for many decades. We recognize that cultivating diversity and promoting inclusion are essential to attracting the best talent from around the world and enabling creativity and innovation to drive business success. We believe our strong culture focused on workforce diversity, inclusivity, and learning and development results in the best possible working environment for all our people.

Workforce Diversity

SLB's long-standing commitment to national and cultural diversity is reflected in our workforce composition and our philosophy to recruit and develop people from the communities in which we operate. Our workforce nationality mix generally aligns with the revenue derived from the countries in which we work, as reflected in the charts below. This fosters a culture that is global in outlook, yet local in practice.

 

 

 

 

 

 

 

 

 

 

 

 

 

6


 

img113994210_1.jpg 

 

img113994210_2.jpg 

 

SLB also recognizes the importance of gender diversity as a source of creativity, innovation, and competitive advantage. We are committed to leading our industry in this area and, in this regard, a number of years ago we established goals of having women represent 25% of our salaried workforce by 2025 and 30% by 2030. As of December 31, 2023, women represented just under 25% of our salaried workforce.

Inclusivity

We are building on our diversity to foster a strong culture of inclusion, in which each person can feel accepted, respected, and empowered to perform at their best. SLB has numerous policies and programs to support our inclusive culture, including:

a global Code of Conduct that outlines the standards of behavior and ethics that all employees are expected to follow, and that prohibits any form of discrimination, harassment, or retaliation;
a global diversity, equity, and inclusion (“DEI”) strategy with a network of diversity and inclusion champions that promote DEI awareness and best practices; and
a global mobility program that enables employees to gain international exposure and experience and develop cross-cultural competencies.

Learning and Development

SLB invests significantly in the learning and development of our people. We strive to identify talent early, and to provide employees who demonstrate exceptional performance with opportunities to progress to higher levels within the organization. This allows us to accelerate personal development while maximizing performance, fostering an agile workforce with the skills necessary to lead SLB today and into the future.

 

SLB believes that through diversity, inclusivity, and learning and development, we can support our people to reach their full potential which unlocks value for all of our stakeholders.

 

Competition

The principal methods of competition within the energy services industry are technological innovation, quality of service, and price differentiation. These factors vary geographically and are dependent upon the different services and products that SLB offers. SLB has numerous competitors, both large and small.

 

Intellectual Property

SLB owns or controls the industry’s leading portfolio of intellectual property, including but not limited to patents, proprietary information, trade secrets, and software tools and applications that, in the aggregate, are material to SLB’s business. While SLB seeks and holds a significant number of patents covering various products and processes, no particular patent or group of patents is material to SLB’s business.

 

Seasonality

Seasonal changes in weather and significant weather events can temporarily affect the delivery of SLB’s products and services. For example, the spring thaw in Canada and other Northern climates and consequent road restrictions can affect activity levels, while the winter months in the North Sea, Russia, and China can produce severe weather conditions that can temporarily reduce levels of activity. In addition, hurricanes and typhoons can disrupt coastal and offshore operations. Furthermore, customer spending patterns for exploration

7


 

data, software, and other products may result in higher activity in the fourth quarter of the year as clients seek to fully utilize their annual budgets. Conversely, customer budget constraints in North America may lead to lower demand for our services and products in the fourth quarter of the year.

 

Customers

SLB’s primary customers are national oil companies, large integrated oil companies, and independent operators. No single customer exceeded 10% of SLB’s consolidated revenue during each of 2023, 2022 and 2021.

 

Governmental Regulations

SLB is subject to numerous environmental and other governmental and regulatory requirements related to its operations worldwide. For additional details, see “Item 1(a). Risk Factors – Legal and Regulatory Risks,” which is incorporated by reference in this Item 1.

 

Corporate Information

SLB was founded in 1926. Schlumberger Limited, the NYSE-listed parent of the SLB family of companies, is incorporated under the laws of Curaçao and has executive offices in Paris, Houston, London, and The Hague. The Company changed its brand name to SLB in 2022 but did not change the legal name of its listed parent company, which remains Schlumberger Limited.

 

Available Information

The SLB website is www.slb.com. SLB uses its Investor Relations website, https://investorcenter.slb.com/, as a routine channel for distribution of important information, including news releases, analyst presentations, and financial information. SLB makes available, free of charge through its Investor Relations website at https://investorcenter.slb.com/, access to its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, and amendments to each of those reports, as soon as reasonably practicable after such material is filed with or furnished to the SEC. Alternatively, you may access these reports at the SEC’s website at www.sec.gov. Copies are also available, without charge, from SLB Investor Relations, 5599 San Felipe, Houston, Texas 77056. Unless expressly noted, the information on its website or any other website is not incorporated by reference in this Form 10-K and should not be considered part of this Form 10-K or any other filing SLB makes with the SEC.

Information About Our Executive Officers

The following table sets forth, as of January 24, 2024, the names and ages of SLB’s executive officers, including all offices and positions held by each executive officer during the past five years.

 

Name

Age

Current Position and Five-Year Business Experience

Olivier Le Peuch

60

Chief Executive Officer and Director, since August 2019; Chief Operating Officer, February 2019 to July 2019; and Executive Vice President, Reservoir and Infrastructure, May 2018 to February 2019.

Khaled Al Mogharbel

53

Executive Vice President, Geographies, since July 2020; Executive Vice President, Operations, April 2019 to June 2020; Executive Vice President, Eastern Hemisphere, February 2019 to March 2019; and President, Eastern Hemisphere, May 2017 to January 2019.

Stephane Biguet

55

Executive Vice President and Chief Financial Officer, since January 2020; and Vice President, Finance, December 2017 to January 2020.

Abdellah Merad

50

Executive Vice President, Core Services and Equipment, since April 2022; Executive Vice President, Performance Management, May 2019 to March 2022; and President, Production Group, October 2017 to April 2019.

Katharina Beumelburg

47

Chief Strategy and Sustainability Officer, since May 2021; Senior Vice President, Transmission Service, Siemens Energy, Siemens AG (a multinational industrial manufacturing company), April 2020 to May 2021; and Executive Vice President, Strategy, Siemens Gas and Power, Siemens AG, November 2016 to April 2020.

Demosthenis Pafitis

56

Chief Technology Officer, since February 2020; and Senior Vice President, SLB 4.0 Platforms, from December 2017 to January 2020.

Dianne Ralston

57

Chief Legal Officer, since December 2020, and Secretary, since April 2021; and Executive Vice President, Chief Legal Officer, and Secretary, TechnipFMC plc (a global oilfield services company), January 2017 to September 2020.

8


 

Carmen Rando Bejar

46

Chief People Officer, since April 2022; Vice President, Global Business Services, September 2019 to March 2022; and Operational Planning and Resource Manager, Drilling and Measurements, April 2018 to August 2019.

Rakesh Jaggi

54

President, Digital and Integration, since April 2023; Senior Vice President, Sales & Commercial, May 2019 to March 2023; and President, Completions, March 2017 to May 2019.

 

 

 

Gavin Rennick

49

President, New Energy, since April 2022; Vice President, Human Resources, February 2019 to March 2022; and President, Software Integrated Solutions, January 2017 to February 2019.

Kevin Fyfe

50

Vice President and Treasurer, since July 2022; and Vice President and Controller, October 2017 to June 2022.

Howard Guild

52

Chief Accounting Officer, since July 2005.

Ugo Prechner

46

Vice President and Controller, since August 2022; Well Construction Controller, July 2020 to July 2022; Controller Operations, August 2019 to June 2020; and M-I SWACO Controller, October 2017 to August 2019.

Vijay Kasibhatla

60

Director, Mergers and Acquisitions, since January 2013.

9


 

Item 1A. Risk Factors.

The following discussion of risk factors known to us contains important information for the understanding of our “forward-looking statements,” which are discussed immediately following Item 7A. of this Form 10-K and elsewhere. These risk factors should also be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related notes included in Item 8. Financial Statements and Supplementary Data of this Form 10-K.

Please carefully consider the risks described below, which discuss the material factors that make an investment in our securities speculative or risky, other material included or incorporated by reference in this Form 10-K, and other reports and materials that we file with the SEC. Additional risks and uncertainties not currently known to us or that we currently deem immaterial could also materially adversely affect our business, reputation, financial condition, results of operations, cash flows and prospects.

Business and Operational Risks

Demand for our products and services is substantially dependent on the levels of expenditures by our customers, which can change based on many factors, including fluctuations in oil and gas prices. Oil and gas industry downturns have resulted in reduced demand for oilfield products and services and lower expenditures by our customers, which has in the past had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.

Demand for our products and services depends substantially on expenditures by our customers for the exploration, development and production of oil and gas reserves. These expenditures are generally dependent on our customers’ views of future demand for oil and gas and future oil and gas prices, as well as our customers’ ability to access capital. In addition, the transition of the global energy sector from a primarily fossil fuel-based system to a diverse system which includes renewable energy sources could affect our customers’ levels of expenditures.

Actual and anticipated declines in oil and gas prices have in the past resulted in, and may in the future result in, lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us. These effects have had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.

Historically, oil and gas prices have experienced significant volatility and can be affected by a variety of factors, including:

 

changes in the supply of and demand for hydrocarbons, which are affected by general economic and business conditions;
the costs of exploring for, producing, and delivering oil and gas;
the ability or willingness of the Organization of Petroleum Exporting Countries and the expanded alliance known as OPEC+ to set and maintain production levels for oil;
the level of oil and gas exploration and production activity;
the level of excess production capacity;
the level of refining and storage capacity;
the level of oil and gas inventories;
access to potential resources;
political and economic uncertainty and geopolitical unrest;
governmental laws, policies, regulations, subsidies, and other actions, including initiatives to promote the use of renewable energy sources;
speculation as to the future price of oil and the speculative trading of oil and gas futures contracts;
technological advances affecting energy consumption; and
extreme weather conditions, natural disasters, and public health or similar issues, such as pandemics and epidemics.

The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward pressure on the prices that we are able to charge. Sustained market uncertainty can also result in lower demand and pricing for our products and services. A significant industry downturn, sustained market uncertainty, or increased availability of economical alternative energy sources could result in a reduction in demand for our products and services, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.

 

Disruptions in the political, regulatory, economic, and social environments of the countries in which we operate could adversely affect our reputation, financial condition, results of operations and cash flows.

We are a global technology company, and our non-US operations accounted for approximately 84% of our consolidated revenue in 2023 and 2022, and 85% in 2021. Geopolitical instability and unforeseen changes in any of the markets in which we operate could result in business disruptions or operational challenges that may adversely affect the demand for our products and services, or our reputation, our financial condition, and our results of operations and cash flows. These factors include, but are not limited to, the following:

 

uncertain or volatile political, social, and economic conditions;
exposure to expropriation, nationalization, deprivation or confiscation of our assets or the assets of our customers, or other governmental actions;

10


 

social unrest, acts of terrorism, war, or other armed conflict;
confiscatory taxation or other adverse tax policies;
theft of, or lack of sufficient legal protection for, proprietary technology and other intellectual property;
deprivation of contract rights;
trade and economic sanctions or other restrictions imposed by the European Union, the United States, the United Kingdom, China, or other regions or countries that could restrict or curtail our ability to operate in certain markets;
public health crises;
unexpected changes in legal and regulatory requirements, including changes in interpretation or enforcement of existing laws;
restrictions on the repatriation of income or capital;
currency exchange controls;
inflation; and
currency exchange rate fluctuations and devaluations.

 

As an example of a risk resulting from our global operations, in March 2022 we decided to immediately suspend new investment and technology deployment to our Russia operations. In July 2023, we announced that we were halting shipments of products into Russia from all our facilities worldwide in response to the continued expansion of international sanctions. Russia represented approximately 5% of our worldwide revenue during 2023. The carrying value of our net assets in Russia was approximately $0.6 billion as of December 31, 2023. This consisted of $0.2 billion of receivables, $0.3 billion of fixed assets, $0.4 billion of other assets, and $0.3 billion of current liabilities.

We continue to actively monitor the dynamic situation in Ukraine and applicable laws, sanctions and trade control restrictions resulting from the conflict. The extent to which our operations, financial results and cash flows may be affected by the ongoing conflict in Ukraine will depend on various factors, including the extent and duration of the conflict; the effects of the conflict on regional and global economic and geopolitical conditions; the effect of further laws, sanctions and trade control restrictions on our business, the global economy and global supply chains; and the impact of fluctuations in the exchange rate of the ruble. Continuation or escalation of the conflict may also exacerbate this and other risk factors identified in this Form 10-K, including cybersecurity, regulatory, and reputational risks.

 

Failure to effectively and timely address the energy transition could adversely affect our business, results of operations, and cash flows.

Our long-term success depends on our ability to effectively address the energy transition, which will require adapting our technology portfolio to changing customer preferences and government requirements, developing solutions to decarbonize oil and gas operations, and scaling innovative low-carbon and carbon-neutral technologies. If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our products and services could be adversely affected. Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.

 

Our operations are subject to cyber incidents that could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our success depends in part on our ability to provide effective cyber security protection in connection with our digital technologies and services as well as our internal digital infrastructure. We operate information technology networks and systems for internal purposes that incorporate third-party software and technologies. We also connect to and exchange data with external networks that may be operated by our customers, suppliers, alliance partners, or other third parties. We provide digital technologies that allow us or our customers to remotely perform wellsite and field operations. We also develop software and other digital products and services that store, retrieve, manipulate, and manage our customers’ information and data, external data, personal data, and our own data.

 

Our digital technologies and services, as well as third-party products, services and technologies that we rely on (including emerging technologies, such as artificial intelligence programs), are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. Cyberattacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including artificial intelligence) that circumvent controls, evade detection and even remove forensic evidence of the infiltration. There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur. We have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from social engineering such as phishing and ransomware infections. Even if we successfully defend our own digital technologies and services, we also rely on providers of third-party products, services, and networks, with whom we may share data and services, and who may be unable to effectively defend their digital technologies and services against attack.

Unauthorized access to or modification of, or actions disabling our ability to obtain authorized access to, our customers’ data, other external data, personal data, or our own data, as a result of a cyber incident, attack or exploitation of a security vulnerability, or loss of control of our clients’ operations could result in significant damage to our reputation or disruption of the services we provide to our customers or of our customers’ businesses. In addition, allegations, reports, or concerns regarding vulnerabilities affecting our digital products or services could damage our reputation. This could lead to fewer customers using our digital products and services, which

11


 

could have a material adverse impact on our financial condition, results of operations, cash flows, and future prospects. In addition, if our systems or third-party products, services, and network systems for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to our intellectual property, proprietary or confidential information; loss of customer, supplier, or our employee data; breach of personal data; interruption of our business operations; disruption of our customers’ businesses; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees, our customers, our suppliers, our alliance partners and other third parties, and may result in claims against us.

 

We operate in a highly competitive environment. If we are unable to maintain technology leadership, this could adversely affect any competitive advantage we hold.

The energy industry is highly competitive and rapidly evolving. Our business may be adversely affected if we fail to continue developing and producing innovative technologies in response to changes in the market, including customer and government requirements, or if we fail to deliver such technologies to our customers in a timely and cost-competitive manner. If we are unable to maintain technology leadership in our industry, our ability to maintain market share, defend, maintain, or increase prices for our products and services, and negotiate acceptable contract terms with our customers could be adversely affected. Furthermore, competing or new technologies may accelerate the obsolescence of our products or services and reduce the value of our intellectual property.

Limitations on our ability to obtain, maintain, protect, or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.

There can be no assurance that the steps we take to obtain, maintain, protect, and enforce our intellectual property rights will be adequate. Some of our products or services, and the processes we use to produce or provide them, have been granted patent protection, have patent applications pending, or are trade secrets. Our business may be adversely affected when our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our patent applications are denied, or our trade secrets are not adequately protected. Patent protection on some types of technology, such as software or machine learning processes, may not be available in certain countries in which we operate. Our competitors may also be able to develop technology independently that is similar to ours without infringing on our patents or gaining access to our trade secrets.

Third parties may claim that we have infringed upon or otherwise violated their intellectual property rights.

The tools, techniques, methodologies, programs, and components we use to provide our services and products may infringe upon or otherwise violate the intellectual property rights of others or be challenged on that basis. Regardless of the merits, any such claims generally result in significant legal and other costs, including reputational harm, and may distract management from running our business. Resolving such claims could increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies. If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product.

Legal and Regulatory Risks

Our operations require us to comply with numerous laws and regulations, violations of which could have a material adverse effect on our reputation, financial condition, results of operations or cash flows.

Our operations are subject to international, regional, national, and local laws and regulations in every place where we operate, relating to matters such as environmental protection, health and safety, labor and employment, human rights, import/export controls, currency exchange, bribery and corruption, data privacy and cybersecurity, intellectual property, immigration, and taxation. These laws and regulations are complex, frequently change, have tended to become more stringent over time, and could conflict among one another. In the event the scope of these laws and regulations expands in the future, the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash flows.

Our operations are subject to anti-corruption and anti-bribery laws and regulations, such as the Foreign Corrupt Practices Act, the UK Bribery Act, and other similar laws. We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons. Our ability to transfer people, products, and data among certain countries is subject to maintaining required licenses and complying with these laws and regulations.

The internal controls, policies and procedures, and employee training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing employees, contractors, or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Any determination that we have violated or are responsible for violations of applicable laws, including securities, environmental, trade control, trade sanctions, or anti-corruption laws, could have a material adverse effect on our financial condition. Violations of international and US laws and regulations or the loss of any required licenses may result in fines and penalties, criminal sanctions, administrative remedies, or restrictions on business conduct, and could have a material adverse effect on our business, operations, and financial condition. In addition, any major violations could have a significant effect on our reputation and consequently on our ability to win future business and maintain existing customer and supplier relationships.

 

Existing or future laws, regulations, court orders or other public- or private-sector initiatives to limit greenhouse gas emissions or relating to climate change may reduce demand for our products and services.

12


 

Continuing political and social attention to the issue of climate change has resulted in both existing and proposed international agreements and national, regional, and local legislation and regulatory measures to limit GHG emissions and mitigate the effects of climate change. The implementation of these agreements, including the Paris Agreement, the Europe Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, impose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.

In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions. As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring mitigation of the effects of climate change.

There is also increased focus by our customers, investors and other stakeholders on climate change, sustainability, and energy transition matters. Actions to address these concerns or negative perceptions of our industry or fossil fuel products and their relationship to the environment have led to initiatives to conserve energy and promote the use of alternative energy sources, which may reduce the demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services. In addition, initiatives by investors and financial institutions to limit funding to companies in fossil fuel-related industries may adversely affect our liquidity or access to capital. Any of these initiatives may, in turn, adversely affect our financial condition, results of operations, and cash flows.

 

Environmental compliance costs and liabilities arising as a result of environmental laws and regulations could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We are subject to numerous laws and regulations relating to environmental protection, including those governing air and GHG emissions, water discharges and waste management, as well as the importation and use of hazardous materials, radioactive materials, chemicals, and explosives. The technical requirements of these laws and regulations are becoming increasingly complex, stringent, and expensive to implement. These laws sometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others.

We use and generate hazardous substances and wastes in our operations. In addition, many of our current and former properties are, or have been, used for industrial purposes. Accordingly, we could become subject to material liabilities relating to the investigation and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as a result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement or changing interpretations of existing laws and regulations, the enactment of new laws and regulations, the discovery of previously unknown contamination, or the imposition of new or increased requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, operations, and financial condition.

 

We could be subject to substantial liability claims, including as a result of well incidents, which could adversely affect our reputation, financial condition, results of operations, and cash flows.

The technical complexities of our operations expose us to a wide range of significant health, safety, and environmental risks. Our operations involve the use of radioactive materials, chemicals, explosives and other equipment and services that are deployed in challenging exploration, development, and production environments. Accidents or acts of malfeasance involving these services or equipment, or a failure of a product (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations, which could materially adversely affect us. Any well incidents, including blowouts at a well site or any loss of containment or well control, may expose us to additional liabilities, which could be material. Generally, we rely on contractual indemnities, releases, and limitations on liability with our customers and insurance to protect us from potential liability related to such events. However, our insurance may not protect us against liability for certain kinds of events, including events involving pollution, or against losses resulting from business interruption. Moreover, we may not be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any damages caused by our services or products that are not covered by insurance or are in excess of policy limits or subject to substantial deductibles, could adversely affect our financial condition, results of operations, and cash flows.

 

General Risk Factors

Our aspirations, goals, and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.

We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our net-zero emissions target and our energy transition strategy. Statements related to these goals, targets, and objectives reflect our current plans and aspirations and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective, including with respect to emissions reduction, is subject to numerous factors and conditions, some of which are outside of our control. Our targets are based on empirical data and estimates that reflect our understanding of current best practices for measuring or estimating emissions or other metrics, but we anticipate that future innovations in both measurement technologies and estimation methodologies could cause us to revise our baseline as well as re-calculate progress toward our targets.

13


 

Our business faces increased scrutiny from certain investors and other stakeholders related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not meet investor or other stakeholder expectations and standards, including any third-party ratings used by stakeholders, which continue to evolve, our reputation, our ability to attract or retain employees, our ability to access capital, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.

 

Failure to attract and retain qualified personnel could impede our operations.

Our future success depends on our ability to recruit, train, and retain qualified personnel. We require highly skilled personnel to operate and provide technical services and support for our business. Competition for the personnel necessary for our businesses intensifies as activity increases, technology evolves and customer demands change. In periods of high utilization, it is often more difficult to find and retain qualified individuals. This could increase our costs or have other material adverse effects on our operations.

 

Severe weather events, including extreme weather conditions associated with climate change, have in the past and may in the future adversely affect our operations and financial results.

Our business has been, and in the future will be, affected by severe weather events in areas where we operate, which could materially affect our operations and financial results. Extreme weather conditions such as hurricanes, flooding, landslides, and heat waves have in the past resulted in, and may in the future result in, the evacuation of personnel, stoppage of services and activity disruptions at our facilities, in our supply chain, or at well-sites, or result in disruptions to our customers’ operations. Particularly severe weather events affecting platforms or structures may result in a suspension of activities. Climate change may impact the frequency and/or intensity of such events. In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall, and hurricane-strength winds may damage our facilities. Any such extreme weather events may result in increased operating costs or decreases in revenue.

 

Public health emergencies, such as the COVID-19 pandemic, and resulting adverse economic conditions have had, and may continue to have, a material adverse effect on our financial condition, results of operations, and cash flows.

Public health emergencies, including the COVID-19 pandemic, have caused, and could again cause, a significant reduction in global economic activity, significantly weakening demand for oil and gas, and in turn, demand for our products and services. Other effects of public health emergencies have included, and may continue to include, significant volatility and disruption of the global financial markets; adverse revenue and net income effects; disruptions to our operations, including suspension or deferral of drilling activities; customer shutdowns of oil and gas exploration and production; downward revisions to customer budgets; limitations on access to sources of liquidity; supply chain disruptions; limitations on access to raw materials; employee impacts from illness; and local and regional closures or lockdowns, including temporary closures of our facilities and the facilities of our customers and suppliers. The extent to which our operating and financial results will be and may continue to be affected by public health emergencies will depend on various factors beyond our control, such as the continued severity and duration of the public health emergencies, including any sustained geographic resurgence; the emergence of new variants and strains of a contagious disease or virus; and the success of actions to contain or mitigate the effects of the public health emergency. A public health emergency, and volatile regional and global economic conditions stemming from a public health emergency, could also aggravate our other risk factors described in this Form 10-K.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

SLB maintains a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. This program is integrated within the Company’s enterprise risk management system and addresses both the corporate information technology environment and customer-facing products.

The underlying controls of the cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and the International Organization Standardization (“ISO”) 27001 Information Security Management System Requirements. SLB has an annual assessment, performed by a third party, of the Company’s cyber risk management program against the NIST CSF.

SLB has a Cyber Security Operations Center operating in three locations to provide 24/7 monitoring of its global cybersecurity environment and to coordinate the investigation and remediation of alerts. A program for staging incident response drills is in place to prepare support teams in the event of a significant incident.

Cyber partners are a key part of SLB’s cybersecurity infrastructure. SLB partners with leading cybersecurity companies and organizations, leveraging third-party technology and expertise. SLB engages with these partners to monitor and maintain the performance and effectiveness of products and services that are deployed in SLB’s environment.

14


 

SLB’s Cyber Security Director reports to SLB’s Chief Information Officer and is the head of the Company’s cybersecurity team. The Cyber Security Director is responsible for assessing and managing SLB’s cyber risk management program, informs senior management regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents and supervises such efforts. The cybersecurity team has decades of experience selecting, deploying, and operating cybersecurity technologies, initiatives, and processes around the world, and relies on threat intelligence as well as other information obtained from governmental, public or private sources, including external consultants engaged by SLB.

The Audit Committee of the Board of Directors oversees SLB’s cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks. The cybersecurity team briefs the Audit Committee on the effectiveness of SLB’s cyber risk management program, typically on a quarterly basis. In addition, cybersecurity risks are reviewed by the SLB Board of Directors, at least annually, as part of the Company’s corporate risk mapping exercise.

SLB faces risks from cybersecurity threats that could have a material adverse effect on its business, financial condition, results of operations, cash flows or reputation. SLB has experienced, and will continue to experience, cyber incidents in the normal course of its business. However, prior cybersecurity incidents have not had a material adverse effect on SLB’s business, financial condition, results of operations, or cash flows. See “Risk Factors – Business and Operational Risks – Our operations are subject to cyber incidents that could have a material adverse effect on our business, financial condition, results of operations, and cash flows.”

Item 2. Properties.

SLB owns or leases numerous manufacturing facilities, administrative offices, service centers, research centers, data processing centers, mines, and other facilities throughout the world, none of which are individually material.

The information with respect to this Item 3. Legal Proceedings is set forth in Note 15 – Contingencies, in the accompanying Consolidated Financial Statements.

Item 4. Mine Safety Disclosures.

Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-K.

 

15


 

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

As of December 31, 2023, there were 21,444 stockholders of record. The principal US market for SLB’s common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol “SLB.”

 

The following graph compares the cumulative total stockholder return on SLB common stock with the cumulative total return on the Standard & Poor’s 500 Index (“S&P 500 Index”) and the cumulative total return on the Philadelphia Oil Service Index. It assumes $100 was invested on December 31, 2018 in SLB common stock, in the S&P 500 Index and in the Philadelphia Oil Service Index, as well as the reinvestment of dividends on the last day of the month of payment. The stockholder return set forth below is not necessarily indicative of future performance. The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that SLB specifically incorporates it by reference into such filing.

 

Comparison of Five-Year Cumulative Total Return Among

SLB Common Stock, the S&P 500 Index and the

Philadelphia Oil Service Index

 

img113994210_3.jpg 

 

 

Share Repurchases

On January 21, 2016, the SLB Board of Directors approved a $10 billion share repurchase program for SLB common stock. SLB had cumulatively repurchased $1.7 billion of its common stock under this program as of December 31, 2023.

 

SLB's common stock repurchase program activity for the three months ended December 31, 2023 was as follows:

 

16


 

(Stated in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total number of shares purchased

 

Average price paid per share

 

Total number of shares purchased as part of publicly announced plans or programs

 

Maximum value of shares that may yet be purchased under the plans or programs

 

October 2023

 

598.9

 

$

58.10

 

 

598.9

 

$

8,343,538

 

November 2023

 

618.2

 

$

53.96

 

 

618.2

 

$

8,310,182

 

December 2023

 

619.9

 

$

51.44

 

 

619.9

 

$

8,278,295

 

 

1,837.0

 

$

54.46

 

 

1,837.0

 

 

Unregistered Sales of Equity Securities

On October 2, 2023, SLB, Aker and Subsea7 closed their previously announced joint venture. In addition to contributing its subsea business to the joint venture, at closing SLB issued 5.1 million shares of its common stock valued at $306.5 million to Aker through a private placement pursuant to Rule 144A.

Item 6. [Reserved].

 

17


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions, and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this Form 10-K.

 

This section of the Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussions of 2021 items and year-to-year comparison between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of SLB’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

2023 Executive Overview

2023 was a remarkable year marked by widespread revenue growth, margin expansion, and exceptional cash flow. Year on year, revenue grew 18%, pretax segment operating margin increased 185 basis points (“bps”) to 20% and we delivered $6.6 billion of cash flow from operations and $4.0 billion of free cash flow—allowing us to reduce net debt by $1.4 billion and return $2.0 billion to shareholders this year through dividends and stock repurchases.

Our strong full-year performance was fueled by substantial international growth, with approximately 90% of our international GeoUnits posting year-on-year increases, complemented by sustained performance in North America.

International revenue grew 20% year on year by more than $4 billion. Notably, we achieved our highest-ever revenue in the Middle East, led by impressive growth in Saudi Arabia, the United Arab Emirates, and Egypt & East Mediterranean GeoUnits.

In the offshore basins, we benefited from long-cycle developments, capacity expansions, and exploration and appraisal activities with remarkable growth in Brazil and Angola, and solid increases in the US Gulf of Mexico, Guyana, and Norway.

In North America, while activity moderated as expected in the second half of the year, revenue increased 12% year on year, outpacing the rig count. This outperformance was driven by our technology-leveraged portfolio in both US land and the US Gulf of Mexico.

On a divisional basis, our Core business—comprising Reservoir Performance, Well Construction, and Production Systems—accelerated, growing revenue 20% year on year and expanding pretax segment operating margin 277 bps.

Digital & Integration revenue increased 4% year on year. This was led by digital, which continued strong growth momentum, delivering more than $2 billion in revenue. Our success in digital was driven by further adoption of Delfi technology and customers embracing our connected and autonomous drilling, data, and AI solutions.

We also saw continued adoption of our Transition Technologies portfolio as customers look to enhance efficiency and reduce emissions. The imperative to operate more sustainably is translating into tangible investments by our customers, resulting in the portfolio generating more than $1 billion of revenue.

As global energy demand continues to increase, international production is expected to play a key role in meeting supply through the end of the decade. Notably, we anticipate record investment levels in the Middle East extending beyond 2025, with significant expansion in Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. Offshore remains another distinct attribute of this durable growth cycle, serving as an important source for production growth and capacity additions, and we expect strong activity to continue in Brazil, West Africa, the Eastern Mediterranean, the Middle East, and Southeast Asia.

In the international environment, despite elevated geopolitical tensions in various regions, we do not anticipate a significant impact on the sector's overall activity, absent any escalation. Furthermore, we expect the long-cycle investments across the Middle East, global offshore, and gas resource plays to be largely decoupled from short-term commodity price fluctuations.

In 2024, SLB expects to experience another year of strong growth driven by the international markets. Benefiting from these market dynamics, we foresee further growth led by Production Systems, strengthened by the additional subsea opportunities from our OneSubsea joint venture. Sustained momentum is expected in Reservoir Performance, accompanied by increased activity in Well Construction. Additionally, we expect continued customer adoption of our Digital business, particularly in our new technology platforms.

Our performance and returns-focused strategy, combined with our differentiated market positioning and digital capabilities, will drive profitable growth and further margin expansion, setting a strong foundation for long-term outperformance.

 

With confidence in the strength and longevity of the cycle and visibility into sustained strong cash flows, in January 2024, our Board of Directors approved a 10% increase to our quarterly dividend. Additionally, we plan to increase share repurchases in 2024, visibly enhancing returns to shareholders for the full year.

18


 

Fourth Quarter 2023 Results

 

 

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter 2023

 

Third Quarter 2023

 

 

 

 

Pretax

 

 

 

 

 

Pretax

 

 

Revenue

 

 

Income

 

 

Revenue

 

 

Income

 

Digital & Integration

$

1,049

 

 

$

356

 

$

982

 

 

$

314

 

Reservoir Performance

 

1,735

 

 

 

371

 

 

1,680

 

 

 

344

 

Well Construction

 

3,426

 

 

 

770

 

 

3,430

 

 

 

759

 

Production Systems

 

2,944

 

 

 

442

 

 

 

2,367

 

 

 

319

 

Eliminations & other

 

(164

)

 

 

(71

)

 

(149

)

 

 

(53

)

Pretax segment operating income

 

 

 

 

1,868

 

 

 

 

 

1,683

 

Corporate & other (1)

 

 

 

 

(193

)

 

 

 

 

(182

)

Interest income (2)

 

 

 

 

30

 

 

 

 

 

20

 

Interest expense (3)

 

 

 

 

(126

)

 

 

 

 

(126

)

Charges & credits (4)

 

 

 

 

(146

)

 

 

 

 

 

-

 

$

8,990

 

$

1,433

 

$

8,310

 

$

1,395

 

 

(1)
Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.
(2)
Excludes interest income included in the segments’ income (fourth quarter 2023: $11 million; third quarter 2023: $2 million).
(3)
Excludes interest expense included in the segments’ income (fourth quarter 2023: $4 million; third quarter 2023: $3 million).
(4)
Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.

 

Fourth-quarter revenue of $9.0 billion increased 8% sequentially with the acquired Aker subsea business accounting for approximately 70% of the growth, while the legacy portfolio continued its growth trajectory in the international markets.

International revenue of $7.3 billion grew 10% sequentially, driven by Europe & Africa and the Middle East & Asia. Europe & Africa increased 16% sequentially driven by the acquired Aker subsea business, which accounted for most of the sequential revenue growth, primarily in Scandinavia. Revenue in the Middle East & Asia increased 11% sequentially driven by higher drilling, intervention, stimulation, and evaluation activity, both on land and offshore. North America revenue of $1.6 billion was flat sequentially as reduced drilling activity in US land and Canada was offset by higher offshore revenue in the US Gulf of Mexico.

Compared to the same quarter last year, fourth-quarter 2023 international revenue outpaced North America, growing 18%, while North America was relatively flat. Excluding the acquired Aker subsea business, international revenue grew 10% year on year, marking the 10th consecutive quarter of double-digit growth.

Fourth-quarter 2023 pretax segment operating income margin of 21% increased year on year, representing the 12th consecutive quarter of growth.

Digital & Integration

Digital & Integration revenue of $1.0 billion increased 7% sequentially due to increased digital revenue across all areas led by the Middle East & Asia and Europe & Africa.

Digital & Integration pretax operating margin of 34% expanded 197 bps sequentially due to improved profitability in digital.

Reservoir Performance

Reservoir Performance revenue of $1.7 billion grew 3% sequentially primarily due to increased activity internationally, mainly in the Middle East and Africa.

Reservoir Performance pretax operating margin of 21% expanded 88 bps sequentially and represents the Division’s highest level of pretax operating margin in this cycle. This increase was primarily driven by higher activity, pricing, and improved operating leverage.

Well Construction

Well Construction revenue of $3.4 billion was flat sequentially with international growth being offset by a decline in North America revenue. International revenue increased 2% driven primarily by strong growth in the Middle East & Asia and Africa. North America revenue decreased 7% on a lower US land rig count.

Well Construction pretax operating margin of 22% increased 35 bps sequentially primarily driven by improved profitability from the increased activity in the Middle East & Asia and Africa.

19


 

Production Systems

Production Systems revenue of $2.94 billion increased 24% sequentially. The acquired Aker subsea business accounted for most of the growth. Excluding the effects of this acquisition, revenue grew 4% sequentially due to strong international sales.

Production Systems pretax operating margin expanded 153 bps sequentially to 15%, its highest level in this cycle. The improvement was driven primarily by higher sales of midstream, artificial lift, and subsea production systems.

Full-Year 2023 Results

 

 

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

2022

 

 

 

 

Pretax

 

 

 

 

 

Pretax

 

 

Revenue

 

 

Income

 

 

Revenue

 

 

Income

 

Digital & Integration

$

3,871

 

 

$

1,257

 

$

3,725

 

 

$

1,357

 

Reservoir Performance

 

6,561

 

 

 

1,263

 

 

5,553

 

 

 

881

 

Well Construction

 

13,478

 

 

 

2,932

 

 

11,397

 

 

 

2,202

 

Production Systems

 

9,831

 

 

 

1,245

 

 

 

7,862

 

 

 

748

 

Eliminations & other

 

(606

)

 

 

(174

)

 

(446

)

 

 

(177

)

Pretax segment operating income

 

 

 

 

6,523

 

 

 

 

 

5,011

 

Corporate & other (1)

 

 

 

 

(729

)

 

 

 

 

(637

)

Interest income (2)

 

 

 

 

87

 

 

 

 

 

27

 

Interest expense (3)

 

 

 

 

(489

)

 

 

 

 

(477

)

Charges & credits (4)

 

 

 

 

(110

)

 

 

 

 

347

 

$

33,135

 

$

5,282

 

$

28,091

 

$

4,271

 

 

(1)
Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.
(2)
Excludes interest income included in the segments’ income (2023: $13 million; 2022: $72 million).
(3)
Excludes interest expense included in the segments’ income (2023: $14 million; 2022: $13 million) .
(4)
Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.

 

Full-year 2023 revenue of $33.1 billion increased 18% year on year led by Well Construction and Production Systems. On a geographic basis, year-on-year revenue growth was broad-based with North America revenue increasing 12% due to strong land and offshore drilling and higher sales of production systems, while international revenue grew 20%. International growth was widespread across all areas, led by the Middle East & Asia, which grew 21% due to higher drilling and intervention activity. Europe & Africa grew 18% primarily from higher sales of production systems in Europe and increased activity in offshore Africa, while Latin America revenue increased 17% due to robust drilling activity and higher sales of production systems.

Full-year 2023 pretax segment operating margin of 20% expanded by 185 bps as compared to 2022 driven by higher activity, improved pricing, and a more favorable activity mix.

Digital & Integration

Digital & Integration revenue of $3.9 billion increased 4% year on year, as strong growth in digital sales was largely offset by lower APS revenue and decreased exploration data licensing sales. The APS revenue decline resulted primarily from a temporary production interruption in the projects in Ecuador during the first quarter of 2023 due to a pipeline disruption and lower commodity prices that impacted the project in Canada. The lower exploration data licensing sales were driven by the absence of the $95 million of transfer fees recorded in the second quarter of 2022.

 

Digital & Integration pretax operating margin contracted 397 bps to 32% primarily due to the absence of the $95 million of exploration data transfer fees and reduced profitability from APS projects.

Reservoir Performance

Reservoir Performance revenue of $6.6 billion increased 18% year on year due primarily to increased activity internationally.

Reservoir Performance pretax operating margin expanded 338 bps to 19% primarily due to higher activity levels and improved pricing.

Well Construction

Well Construction revenue of $13.5 billion increased 18% year on year with double-digit growth across all areas. North America grew 17% while international revenue increased 19%. This growth was driven by drilling fluids and measurements—both on higher land and offshore activity—along with improved pricing.

20


 

Well Construction pretax operating margin expanded 243 bps to 22% with profitability improving across all geographic areas driven by the higher activity and improved pricing.

Production Systems

Production Systems revenue of $9.8 billion increased 25% driven by strong growth across all areas led by Latin America and the Middle East & Asia, as well as the impact of the Aker subsea business, which was acquired on October 2, 2023.

Production Systems pretax operating margin expanded 315 bps to 13% mainly driven by higher subsea production system, artificial lift, and surface production system sales, as well as improved pricing, and the easing of supply chain constraints.

Interest & Other Income, Net

Interest & other income, net consisted of the following:

 

 

 

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

2023

 

 

2022

 

Earnings of equity method investments

$

206

 

 

$

164

 

Interest income

 

100

 

 

 

99

 

Gain on sale of Liberty shares

 

36

 

 

 

325

 

Gain on ADC equity investment

 

-

 

 

 

107

 

Gain on sale of real estate

 

-

 

 

 

43

 

Gain on repurchase of bonds

 

-

 

 

 

11

 

Loss on Blue Chip Swap transactions

 

-

 

 

 

(139

)

$

342

 

 

$

610

 

 

On December 31, 2020, SLB contributed its onshore hydraulic fracturing business in the United States and Canada, including its pressure pumping, pumpdown perforating and Permian frac sand business, to Liberty Energy Inc. (“Liberty”) in exchange for an equity interest in Liberty. During 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and recognized a gain of $36 million. During 2022, SLB sold 47.8 million of its shares of Liberty and recognized a gain of $325 million.

Although SLB's functional currency in Argentina is the US dollar, a portion of its transactions are denominated in pesos. SLB uses Argentina’s official exchange rate to remeasure its Argentine peso-denominated net assets into US dollars. The Central Bank of Argentina maintains certain currency controls that limit SLB’s ability to access US dollars in Argentina and remit cash from its Argentine operations. A legal indirect foreign exchange mechanism exists in the form of capital market transactions known as Blue Chip Swaps, which effectively results in a parallel US dollar exchange rate. This parallel rate, which cannot be used as the basis to remeasure SLB’s net monetary assets in US dollars under US GAAP, was approximately 20% higher than Argentina’s official exchange rate at December 31, 2023 and 93% higher at December 31, 2022.

During the fourth quarter of 2023, Argentina devalued its peso relative to the US dollar by approximately 55%. As a result, SLB recorded a $90 million devaluation charge, of which $61 million is classified in Cost of services in the Consolidated Statement of Income, with the remaining $29 million classified in Cost of sales. SLB’s peso-denominated net assets in Argentina were approximately $75 million at December 31, 2023 ($40 million at December 31, 2022 and $270 million at September 30, 2022), primarily consisting of cash. Argentina represented less than 5% of SLB’s consolidated revenue in each of 2023 and 2022.

SLB accounts for its investment in the Arabian Drilling Company (“ADC”), an onshore and offshore gas and oil rig drilling company in Saudi Arabia, under the equity method. During the fourth quarter of 2022, ADC completed an initial public offering (“IPO”). In connection with the IPO, SLB sold a portion of its interest in a secondary offering that resulted in SLB receiving net proceeds of $223 million. As a result of these transactions, SLB’s ownership interest in ADC decreased from 49% to approximately 34%. SLB recognized a gain of $107 million, representing the gain on the sale of a portion of its interest as well as the effect of the ownership dilution of its equity investment due to the IPO.

During 2022, SLB sold certain real estate and recognized a gain of $43 million.

During 2022, SLB repurchased $395 million of its 3.75% Senior Notes due 2024 and $409 million of its 4.00% Senior Notes due 2025 for $790 million, resulting in a gain of $11 million after considering the write-off of the related deferred financing fees and other costs.

Interest Expense

Interest expense of $503 million in 2023 increased $13 million compared to 2022.

21


 

Other

Research & engineering and General & administrative expenses, as a percentage of Revenue, were as follows:

 

 

2023

 

 

2022

 

Research & engineering

 

2.1

%

 

 

2.3

%

General & administrative

 

1.1

%

 

 

1.3

%

 

Income Taxes

The SLB effective tax rate is sensitive to the geographic mix of earnings. When the percentage of pretax earnings generated outside of North America increases, the SLB effective tax rate generally decreases. Conversely, when the percentage of pretax earnings generated outside of North America decreases, the SLB effective tax rate generally increases.

 

The effective tax rate was 19% in 2023 as compared to 18% in 2022. The increase in the effective tax rate was primarily due to the charges and credits described in Note 3 to the Consolidated Financial Statements. These charges and credits reduced the effective tax rate in 2022 by approximately one percentage point.

Charges and Credits

SLB recorded charges and credits during 2023 and 2022. These charges and credits, which are summarized below, are more fully described in Note 3 to the Consolidated Financial Statements.

 

The following is a summary of the 2023 charges and credits:

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax Charge (Credit)

 

 

Tax Benefit (Expense)

 

 

Noncontrolling Interests

 

 

Net

 

First quarter:

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of Liberty shares

$

(36

)

 

$

(8

)

 

$

-

 

 

$

(28

)

Fourth quarter:

 

 

 

 

 

 

 

 

 

 

 

Merger and integration

 

56

 

 

 

8

 

 

 

8

 

 

 

40

 

Currency devaluation loss in Argentina

 

90

 

 

 

-

 

 

 

-

 

 

 

90

 

 

$

110

 

 

$

-

 

 

$

8

 

$

102

 

 

The following is a summary of the 2022 charges and credits:

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

Pretax Charge (Credit)

 

 

Tax Benefit (Expense)

 

 

Net

 

First quarter:

 

 

 

 

 

 

 

 

Gain on sale of Liberty shares

$

(26

)

 

$

(4

)

 

$

(22

)

Second quarter:

 

 

 

 

 

 

 

 

Gain on sale of Liberty shares

 

(215

)

 

 

(14

)

 

 

(201

)

Gain on sale of real estate

 

(43

)

 

 

(2

)

 

 

(41

)

Fourth quarter:

 

 

 

 

 

 

 

 

Gain on sale of Liberty shares

 

(84

)

 

 

(19

)

 

 

(65

)

Loss on Blue Chip Swap transactions

 

139

 

 

 

-

 

 

 

139

 

Gain on ADC equity investment

 

(107

)

 

 

(3

)

 

 

(104

)

Gain on repurchase of bonds

 

(11

)

 

 

(2

)

 

 

(9

)

 

$

(347

)

 

$

(44

)

$

(303

)

 

22


 

Liquidity and Capital Resources

Details of the components of liquidity as well as changes in liquidity follow:

 

 

 

 

(Stated in millions)

 

 

 

 

 

 

 

Dec. 31,

 

Dec. 31,

 

Components of Liquidity:

2023

 

2022

 

Cash

$

2,900

 

$

1,655

 

Short-term investments

 

1,089

 

 

1,239

 

Short-term borrowings and current portion of long-term debt

 

(1,123

)

 

 

(1,632

)

Long-term debt

 

(10,842

)

 

(10,594

)

Net debt (1)

$

(7,976

)

$

(9,332

)

 

Changes in Liquidity:

2023

 

 

2022

 

Net income

$

4,275

 

 

$

3,492

 

Charges and credits

 

110

 

 

 

(347

)

Depreciation and amortization (2)

 

2,312

 

 

 

2,147

 

Stock-based compensation expense

 

293

 

 

 

313

 

Deferred taxes

 

28

 

 

 

(39

)

Earnings of equity method investments, less dividends received

 

(132

)

 

 

(96

)

Increase in working capital

 

(215

)

 

 

(1,709

)

US federal tax refund

 

85

 

 

 

-

 

Other

 

(119

)

 

 

(41

)

Cash flow from operations

 

6,637

 

 

 

3,720

 

Capital expenditures

 

(1,939

)

 

 

(1,618

)

APS investments

 

(507

)

 

 

(587

)

Exploration data capitalized

 

(153

)

 

 

(97

)

Free cash flow (3)

 

4,038

 

 

 

1,418

 

Dividends paid

 

(1,317

)

 

 

(848

)

Stock repurchase program

 

(694

)

 

 

-

 

Proceeds from employee stock purchase plan

 

191

 

 

 

141

 

Proceeds from exercise of stock options

 

90

 

 

 

81

 

Taxes paid on net-settled stock-based compensation awards

 

(169

)

 

 

(93

)

Business acquisitions and investments, net of cash acquired plus debt assumed

 

(330

)

 

 

(58

)

Proceeds from sale of Liberty shares

 

137

 

 

 

732

 

Proceeds from sale of ADC shares

 

-

 

 

 

223

 

Proceeds from sale of real estate

 

-

 

 

 

120

 

Purchases of Blue Chip Swap securities

 

(185

)

 

 

(259

)

Proceeds from sales of Blue Chip Swap securities

 

97

 

 

 

111

 

Other

 

(195

)

 

 

(105

)

Change in net debt before impact of changes in foreign exchange rates on net debt

 

1,663

 

 

 

1,463

 

Impact of changes in foreign exchange rates on net debt

 

(307

)

 

 

261

 

Decrease in Net Debt

 

1,356

 

 

 

1,724

 

Net Debt, Beginning of period

 

(9,332

)

 

 

(11,056

)

Net Debt, End of period

$

(7,976

)

 

$

(9,332

)

 

(1)
Net debt” represents gross debt less cash and short-term investments. Management believes that Net debt provides useful information to investors and management regarding the level of SLB’s indebtedness by reflecting cash and investments that could be used to repay debt. Net debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.
(2)
Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs and APS investments.
(3)
“Free cash flow” represents cash flow from operations less capital expenditures, APS investments and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.

 

Key liquidity events during 2023 and 2022 included:

Cash flow from operations of $6.6 billion in 2023 increased approximately $2.9 billion as compared to 2022. This increase was primarily due to a $1.4 billion increase in net income adjusted for the previously mentioned charges and credits and depreciation and amortization expense combined with the effect of working capital only consuming $0.2 billion of liquidity in 2023 as compared to $1.7 billion in 2022. This $1.5 billion improvement in working capital was largely attributable to strong collections of accounts receivable and a smaller increase in inventory in 2023 as compared to 2022. Inventory increased in 2022 as a result of the

23


 

significant activity growth that SLB was expecting in 2023. Additionally, SLB received a US federal tax refund of $85 million during the fourth quarter of 2023 relating to prior years.
In January 2023, SLB announced a 43% increase to its quarterly cash dividend from $0.175 per share of outstanding common stock to $0.25 per share, beginning with the dividend payable in April 2023. In April 2022, SLB announced a 40% increase to its quarterly cash dividend from $0.125 per share of outstanding common stock to $0.175 per share, beginning with the dividend payable in July 2022. Dividends paid during 2023 and 2022 were $1.3 billion and $0.8 billion, respectively.

 

In January 2024, SLB announced a 10% increase to its quarterly cash dividend from $0.25 per share of outstanding common stock to $0.275 per share, beginning with the dividend payable in April 2024.

As of December 31, 2023, SLB had cumulatively repurchased $1.7 billion of its common stock under its $10 billion share repurchase program. SLB repurchased approximately 13.3 million shares of its common stock under this program during 2023, for a total purchase price of $694 million. SLB did not repurchase any of its common stock during 2022.
Capital investments (consisting of capital expenditures, APS investments, and exploration data capitalized) were $2.6 billion in 2023 and $2.3 billion in 2022. Capital investments during 2024 are expected to be approximately $2.6 billion.
During the first quarter of 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and received net proceeds of $137 million. As a result, SLB recognized a gain of $36 million. During 2022, SLB sold 47.8 million of its shares of Liberty and received proceeds of $732 million.