SLB, the world’s largest oilfield services provider, affirmed on Friday that its ongoing operations in Russia are compliant with the latest U.S. sanctions imposed this month. However, the company acknowledged a decline in revenue generated from its Russian business. SLB remains one of the few Western companies operating in Russia following the 2022 invasion of Ukraine.
New sanctions issued by the U.S. Treasury Department on January 10th aim to restrict Russia’s access to U.S. services crucial for crude oil and petroleum product extraction and production. These sanctions, which include modifications to a pre-existing executive order, provide companies until February 27th to wind down their Russian operations. SLB’s continued presence in Russia has drawn criticism from U.S. lawmakers on both sides of the aisle, who argue that the company’s operations bolster revenues for the Russian government. Representative Lloyd Doggett (D-TX) emphasized that a reasonable interpretation of the new guidance necessitates the withdrawal of U.S. oilfield service companies from Russia.
SLB CEO Olivier Le Peuch addressed the new sanctions during an earnings call on Friday. He stated that SLB is currently reviewing the new restrictions and believes its proactive measures to curtail activities in Russia, including a global halt on product and technology shipments into the country from all SLB facilities, align with the updated sanctions. These voluntary steps were taken prior to the January 10th announcement.
Coinciding with the sanctions update, SLB announced a higher quarterly dividend and expedited share repurchases following a fourth-quarter profit that surpassed expectations. However, the company also issued a cautionary note, forecasting flat revenue for 2025 due to a projected oil oversupply.
Le Peuch confirmed that revenue from SLB’s Russian operations has been steadily decreasing. In 2024, Russia contributed 4% to SLB’s total revenue, down from 5% in the preceding year. This decline reflects the impact of both geopolitical tensions and the company’s voluntary operational adjustments. The future of SLB’s presence in Russia remains subject to ongoing review and potential further developments in U.S. sanctions policy.
