US Oil Giant SLB Reportedly Bolsters Presence In Russia As Western Rivals Exit Market Amid War With Ukraine

One of the world’s leading oilfield services companies Schlumberger NV SLB, better known as SLB, is reportedly expanding its operations in Russia. This comes at a time when its major Western rivals are exiting the market due to Moscow’s aggressive invasion of Ukraine.

What Happened: Texas-based SLB had committed in July 2023 to stop “shipments of products and technology into Russia” from its worldwide facilities. By September, Russian customs data confirmed that such imports had indeed stopped.

However, the same data shows that SLB continued to import materials from other sources, bringing in equipment worth $17.5 million between August and December 2023. A source close to the company clarified that these imports did not originate from an “SLB facility”, thus aligning with SLB's public statements and international sanctions guidelines, Financial Times reported on Friday.

Despite calls from human rights groups and the Ukrainian government for SLB to withdraw from Russia, the company has made it clear that it has no plans to leave. In contrast, Baker Hughes and Halliburton, SLB’s two largest U.S. competitors in the oil services sector, have already exited Russia following Moscow's invasion of Ukraine.

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Why It Matters: SLB’s decision to expand in Russia comes at a crucial time. The company’s operations in Russia accounted for 5% of its $33.1 billion revenues in 2023, and it employed about 9,000 staff in the country. Despite the geopolitical risks, Western policymakers have been hesitant to impose comprehensive sanctions on oilfield services in Russia, for fear of disrupting fossil fuel exports and causing a surge in global oil prices.

SLB’s expansion in Russia is also significant in light of its planned acquisition of ChampionX. The acquisition, which is expected to conclude in late 2024 or early 2025, could potentially bolster SLB’s presence in the global oilfield services market.

Furthermore, the rise in oil prices could potentially boost SLB’s revenues in the near future.

Price Action: At the time of writing, SLB was trading 0.15% higher at $45.11 during Friday’s pre-market after closing at $45.04 on Thursday, according to Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari