Schlumberger highlights 'favorable' offshore activity in Q2 report

July 22, 2022
Schlumberger's second quarter was characterized by a 'favorable' mix of exploration and offshore activity and the increasing impact of improved pricing, resulting in its largest sequential quarterly growth since 2010.

Offshore staff

HOUSTON  Schlumberger reported that its revenue of $6.8 billion increased 14% sequentially and 20% year on year in the second quarter of this year. 

Schlumberger CEO Olivier Le Peuch said, “The second quarter marked a significant inflection point for Schlumberger with a strong acceleration of revenue and earnings growth. Sequentially, revenue grew 14%, by more than $800 million; EPS—excluding charges and credits—increased 47%; and pretax segment operating margin expanded 212 basis points. Growth was broad-based, driven by an increase in activity internationally, in North America, and across all divisions. The quarter was also characterized by a favorable mix of exploration and offshore activity and the increasing impact of improved pricing, resulting in the largest sequential quarterly growth since 2010."

Growth was led by Europe/CIS/Africa, which experienced 20% sequential growth due to higher production systems sales in Europe and Scandinavia, the seasonal drilling activity rebound in the Northern Hemisphere, and offshore activity increases in Sub-Sahara Africa benefitting all divisions.

Latin America sequential revenue growth of 10% was due to higher stimulation activity in Argentina, increased production systems sales in Brazil and Mexico, and higher offshore drilling in Guyana. 

Middle East & Asia revenue increased 7% sequentially due to higher drilling across Asia, particularly in China, Australia and Indonesia as well as multidivisional activity increases across the Middle East mainly in Oman, United Arab Emirates, Saudi Arabia, Egypt and Iraq.

In North America, sequential revenue growth of 20% was driven by a significant increase in land and offshore drilling activity as well as higher exploration data licensing in the US Gulf of Mexico.

In addition, well construction revenue increased 12% sequentially due to higher land and offshore drilling activity both in North America and internationally, in addition to improved pricing. Reservoir performance revenue grew 10% due to higher intervention, evaluation and stimulation activity, both on land and offshore along with improved pricing. This performance in the core was complemented by the Digital & Integration division, which experienced an 11% sequential revenue increase, driven by higher exploration data licensing sales.

Q2 offshore highlights

OneSubsea, the subsea technologies business of Schlumberger, has been awarded an engineering, procurement, construction, and installation contract by OKEA for the supply of three subsea high-boost pumps to increase production from the Draugen Field, located in the southern part of the Norwegian Sea. OneSubsea will deliver a new high-boost pump module and modify two existing pump modules into high-boost pumps capable of handling higher differential pressure and throughput to maximize production from this asset. Delivery of the pump modules is scheduled for 2023.

Sarawak Shell Berhad has awarded Schlumberger a contract for integrated drilling services on seven exploration wells offshore Malaysia. The scope of the contract includes drilling and measurement, electrical wireline, drilling fluids, solids control, cementing, casing drilling, bits and mud logging. Schlumberger will apply a variety of technologies, including the Allegro CD directional casing-while-drilling service with the sonicVISION sonic-while-drilling service to enhance performance of this operation, which commenced during the second quarter of 2022.

Chariot, the African-focused transitional energy company, has signed a FEED contract with Schlumberger and Subsea 7 for the Anchois gas development project offshore Morocco. The scope of the agreement incorporates offshore components including well completions; subsea production systems; and subsea umbilicals, risers, and flowlines that will be delivered by Subsea Integration Alliance. 

Offshore Brazil, Schlumberger’s autonomous operations on the Peregrino platform offer a glimpse into the future of well construction—built on a digitally native foundation and equipment and service integration capabilities. In addition to the delivery of the full drilling and control systems on the platform, Schlumberger developed a digital avatar of the rig, fully enabling the seamless digital orchestration of the surface equipment and subsurface well construction process—a step closer to the autonomous drilling vision.

In Malaysia, Petronas has awarded Schlumberger a contract to incorporate the DrillOps on-target well delivery solution in a drilling campaign in the West Malaysia offshore, the first deployment of this digital application in Asia. Drilling has already commenced, with DrillOps expected to deliver superior drilling performance, safety and efficiency for Petronas. 

Offshore Brazil, Schlumberger’s recent application of technology and an integrated drilling contract model has enabled Petrobras to drill two of its fastest wells on record, including the most recent national record of 23 days—seven days ahead of plan. The adoption of an integrated approach enabled Petrobras’ drilling plan that was executed with fit-for-purpose technology, including GeoSphere HD high-definition reservoir mapping-while-drilling service and AxeBlade ridged diamond element bit. This marked the first use of geometric cutters in the Marlim Field and contributed to operational success. With the recent record-breaking performances, Schlumberger Well Construction has now drilled the three fastest wells offshore Brazil.

Offshore East Java, Schlumberger enabled Saka Indonesia Pangkah Ltd. to bring two plugged exploration wells into production, avoiding the need to drill new wells and shortening time to first gas. This was the first conversion of an offshore exploration well to a producing well where the casing had been cut at the seabed. To achieve this, Schlumberger used a novel application of its Casing Reconnect metal-to-metal, gas-tight casing repair system for reentry and completion.

Schlumberger is deploying a new technology that can increase the efficiency of rigless plugging and abandonment (P&A) of wells. The Schlumberger dual-string P&A barrier evaluation technology was run for the first time in the Gulf of Mexico to evaluate cement bonding in the annulus between the 13 3/8-inch and 16-inch casing with the logging tool run inside uncemented 9 5/8-inch production casing. The technique documented sufficient cement bonding to allow the Bureau of Safety and Environmental Enforcement to waive further remediation of that annulus. This saved W&T Offshore Inc. multiple days on the abandonment operation being performed by the Q4000 vessel, operated by Helix Energy Solutions Group Inc., Schlumberger’s partner in the nonincorporated Subsea Services Alliance.

Second-half 2022

Le Peuch said, “Looking ahead, the second half of the year continues to shape up very well as highlighted in our revised expectations for the full year, encompassing all phases of oil and gas development and all operating environments—from high-volume onshore to deepwater offshore—and firmly establishing digital, decarbonization and improved pricing as defining characteristics of this upcycle."