Schlumberger CEO Outlines Digital Strategy

By Liz Hampton and Nishara Karuvalli Pathikkal
Wednesday, September 4, 2019

Schlumberger NV's newly-appointed Chief Executive Officer Olivier Le Peuch on Wednesday outlined his vision for the world's largest oilfield services company, vowing to exit unprofitable businesses, restructure some units and focus on returns.

In his first public remarks since taking office in July, the 32-year company veteran also warned the company would record a sizeable, non-cash charge to write down assets in the current quarter. He did not specify the size of the writedown.

Le Peuch, who replaced former CEO Paal Kibsgaard nearly two months ago, outlined plans to accelerate digital investments and to restructure and rename one of Kibsgaard's major initiatives that invested in and ran customer oilfields. He also said the company would resize its North American onshore operations, which had grown under Kibsgaard.

"We are setting an ambition to more than double the contribution of our digital businesses within the foreseeable future," said Le Peuch.

The costly investments in customer projects and the recent $430 million acquisition of hydraulic fracturing equipment unsettled investors and contributed to Schlumberger's 69% share declined over the last five years.

"The Schlumberger of tomorrow will not be the Schlumberger of today," Le Peuch told investors at the Barclays CEO Energy-Power Conference in New York. Improved returns will take priority over revenue growth, he said.

Schlumberger will exit unprofitable businesses and continue to try to sell stakes in ventures under the Schlumberger Production Management group, which was seen by some as competing with customers. SPM staff will form a new asset performance solutions group, Le Peuch said.

Kibsgaard last year said the company wanted to sell stakes in some projects including in Canada and Argentina.

"We are committing not to take equity positions in oil and gas assets," Le Peuch said.

Analysts and investors are looking to Le Peuch to steer Schlumberger back to its roots, and navigate through a new era of digitalization underway in the oil and gas industry.

"Former CEO Paal Kibsgaard was engaged in an almost dizzying array of initiatives," analysts for Jefferies wrote in a note this week ahead of Le Peuch's presentation.

"We expect new CEO Le Peuch just to emphasize fewer things and so portray a more focused organization," they added.

The North American business has faced "significant pressure" and "unsustainable margin compression down to mid-single digits," Le Peuch also said. He said he would prioritize strategic review of the North American portfolio.

Schlumberger shares were up 4% at $33.11 in afternoon trading.


(Reporting by Nishara Karuvalli Pathikkal in Bengaluru; Editing by Arun Koyyur and Marguerita Choy)

Categories: Technology Industry News Automation Digital

Related Stories

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

Propane’s Economic Edge for Ports During Trade Uncertainty

Shell’s Brazil-Bound FPSO Starts Taking Shape

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Technip Energies Gets FEED Job for Inpex’ Abadi LNG Project in Indonesia

Current News

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Eni-Petronas Gas Joint Venture Up for Launch in 2026

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com