REG-Schlumberger Limited Schlumberger Announces Fourth-Quarter and Full-Year 2012 Results

Fri Jan 18, 2013 6:00am EST

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HOUSTON--(Business Wire)--


Schlumberger Limited (NYSE:SLB) today reported full-year 2012 revenue of $42.15
billion versus $36.96 billion in 2011. 

Full-year 2012 income from continuing operations attributable to Schlumberger,
excluding charges and credits, was $5.58 billion, representing diluted
earnings-per-share of $4.17 versus $3.61 in 2011. 

Fourth-Quarter Results

Fourth-quarter 2012 revenue was $11.17 billion versus $10.61 billion in the
third quarter of 2012, and $10.30 billion in the fourth quarter of 2011. 

Income from continuing operations attributable to Schlumberger, excluding
charges and credits, was $1.44 billion, which was flat sequentially, and
represents a 3% decrease year-on-year. Diluted earnings-per-share from
continuing operations, excluding charges and credits, was $1.08, the same as in
the previous quarter, and $1.10 in the fourth quarter of 2011. 

Schlumberger recorded charges of $0.06 per share in the fourth quarter of 2012
versus $0.02 per share in the previous quarter, and $0.06 per share in the
fourth quarter of 2011. 

Oilfield Services revenue of $11.17 billion increased 5% sequentially and 8%
year-on-year. Oilfield Services pretax operating income of $2.2 billion
increased 1% sequentially and was flat year-on-year. 

Schlumberger CEO Paal Kibsgaard commented, "We capped the year with revenues of
over $42 billion, up by 14%, with the International Areas growing by $4 billion,
or 16%, their strongest growth by far since 2008. International grew from robust
exploration and development activity, both offshore and in key land markets. In
North America, we demonstrated our resiliency from the challenges of the land
markets by growing the business by more than $1 billion, or 9%, aided by our
strong position in the offshore market, particularly in the US Gulf of Mexico.
In addition, full-year pretax operating income grew 14%, with International
delivering a 31% increase leading to International margins expanding 226 basis
points (bps) to reach 20.5%, higher than North American margins of 20.3%. 

Our fourth-quarter results showed continued growth in key markets in addition to
typical year-end product, software and multiclient sales. Performance was driven
by international areas where service quality was strong, and service capacity
tight for certain product lines. Our results were, however, impacted by the
previously announced seasonal slowdowns and contract delays as well as by
mobilization and new project start-up costs. In North America, strong
performance in the US Gulf of Mexico overcame lower-than-expected activity in
Canada and further weakening in the US land markets. 

Significant revenue growth was recorded in the Latin America and Middle East &
Asia Areas. Pretax operating margins showed improvement in Latin America while
in the Middle East & Asia Area margins declined on activity mix and IPM project
start-up costs. Revenue declined by 1% in the Europe/CIS/Africa Area which also
saw decreased margins from the seasonal slow-downs in the North Sea and Russia
combined with contract delays in North Africa. International pricing continued
to slowly improve driven by strong execution, new technology sales and proactive
bidding on small- to medium-size contracts. 

In North America, deepwater drilling operations drove strong activity and
excellent performance in the US Gulf of Mexico where results more than offset
lower drilling activity and the impact of lower pricing in US land for hydraulic
fracturing, drilling, coiled tubing and cased-hole wireline services. As a
result, North America revenue and pretax margins both advanced sequentially. 

Among the technology highlights for the quarter, WesternGeco ended the first
IsoMetrix season with three commercial projects and the technology continues to
gain attention as exploration of difficult and complex reservoir prospects
evolves. Two IsoMetrix vessels will be available in 2013. Meanwhile, Wireline
ThruBit* pump-down openhole logging technology saw substantial market
penetration in US land and the Well Services SPARK* business model also saw
growth with the unique approach of offering customers access to our engineered
fluid systems, while using their own personnel and hydraulic horsepower. 

The world macroeconomic environment remains uncertain while the GDP growth
outlook for 2013 remains unchanged. Global oil demand is expected to grow at
similar levels to 2012. The supply side will see further growth in North America
while other non-OPEC production will likely continue to face delay and decline
challenges. Absent any unexpected macroeconomic or geopolitical events, global
spare capacity is expected to remain largely unchanged. 

With international E&P spending forecast to increase by around 10% in the coming
year, and a strong activity outlook for the US Gulf of Mexico, Schlumberger is
well positioned for growth with a balanced business portfolio, wide geographical
footprint and strong executional capability." 

Other Events

* On November 15, 2012 Schlumberger and Cameron International Corporation
("Cameron") announced that they had entered into an agreement with respect to
the creation of OneSubsea, a joint venture to manufacture and develop products,
systems and services for the subsea oil and gas market. Schlumberger will own
40% of OneSubsea. The transaction is subject to regulatory approvals and other
customary closing conditions and is expected to close by the second quarter of
2013. Under the terms of the agreement, Cameron and Schlumberger will each
contribute all of their respective subsea businesses to the joint venture and
Schlumberger will make a $600 million cash payment to Cameron. Cameron will
manage OneSubsea and Schlumberger will equity account for its investment in the
joint venture. 
* On December 20, 2012, Gazprom Geologorazvedka and Schlumberger signed a
technology cooperation framework agreement to maximize exploration efficiency
for Gazprom`s land and offshore fields and license areas in the Russian
Federation. The agreement includes the introduction of Schlumberger technology
and software products, and the development of a personnel training program. This
agreement follows the technology framework agreement signed in 2008 between
Gazprom and Schlumberger. 
* On January 17, 2013, the Board of Directors approved a 13.6% increase in the
quarterly dividend. The next quarterly dividend, which will increase to $0.3125
per share of outstanding common stock, is payable on April 12, 2013 to
stockholders of record on February 20, 2013.

                                                                                                                                                     
 Condensed Consolidated Statement of Income                                                                                                          
                                                                                                                                                     
 (Stated in millions, except per share amounts)                                                                                                      
                                                                                                                                                     
                                                              Fourth Quarter                                   Twelve Months                         
 Periods Ended December 31,                                   2012                        2011                 2012                     2011         
                                                                                                                                                     
 Revenue                                                      $    11,174                 $    10,301          $    42,149              $    36,959  
 Interest and other income, net (1)                                35                          35                   172                      130     
 Expenses                                                                                                                                            
 Cost of revenue(2)                                                8,798                       7,997                33,056                   28,949  
 Research & engineering                                            307                         273                  1,168                    1,073   
 General & administrative(2)                                       111                         98                   405                      417     
 Merger & integration(2)                                           60                          22                   128                      113     
 Restructuring(2)                                                  33                          -                    33                       -       
 Interest                                                          93                          86                   340                      298     
 Income before taxes                                               1,807                       1,860                7,191                    6,239   
 Taxes on income(2)                                                436                         457                  1,723                    1,509   
 Income from continuing operations                                 1,371                       1,403                5,468                    4,730   
 Income from discontinued operations                               -                           16                   51                       277     
 Net income                                                        1,371                       1,419                5,519                    5,007   
 Net income attributable to noncontrolling interests               9                           5                    29                       10      
 Net income attributable to Schlumberger                      $    1,362                  $    1,414           $    5,490               $    4,997   
                                                                                                                                                     
 Schlumberger amounts attributable to:                                                                                                               
 Income from continuing operations(2)                         $    1,362                  $    1,398           $    5,439               $    4,720   
 Income from discontinued operations                               -                           16                   51                       277     
 Net income                                                   $    1,362                  $    1,414           $    5,490               $    4,997   
                                                                                                                                                     
 Diluted earnings per share of Schlumberger                                                                                                          
 Income from continuing operations(2)                         $    1.02                   $    1.04            $    4.06                $    3.47    
 Income from discontinued operations                               -                           0.01                 0.04                     0.20    
 Net income                                                   $    1.02                   $    1.05            $    4.10                $    3.67    
                                                                                                                                                     
 Average shares outstanding                                        1,328                       1,338                1,330                    1,349   
 Average shares outstanding assuming dilution                      1,336                       1,347                1,339                    1,361   
                                                                                                                                                     
 Depreciation & amortization included in expenses(3)          $    930                    $    859             $    3,500               $    3,274   
                                                                                                                                                     


                                                                  
 1)        Includes interest income of:                           
           Fourth quarter 2012 - $5 million (2011 - $11 million)  
           Twelve months 2012 - $29 million (2011 - $39 million)  
 2)        See pages 6 for details of charges and credits.        
 3)        Including multiclient seismic data cost.               
                                                                  


                                                                                         
 Condensed Consolidated Balance Sheet                                                    
                                                                                         
 (Stated in millions)                                                                    
                                                                                         
                                                     Dec. 31,             Dec. 31,       
 Assets                                              2012                 2011           
 Current Assets                                                                          
 Cash and short-term investments                     $      6,274         $      4,827   
 Receivables                                                11,351               9,500   
 Other current assets                                       6,531                6,212   
                                                            24,156               20,539  
 Fixed income investments, held to maturity                 245                  256     
 Fixed assets                                               14,780               12,993  
 Multiclient seismic data                                   518                  425     
 Goodwill                                                   14,585               14,154  
 Other intangible assets                                    4,802                4,882   
 Other assets                                               2,461                1,952   
                                                     $      61,547        $      55,201  
                                                                                         
 Liabilities and Equity                                                                  
 Current Liabilities                                                                     
 Accounts payable and accrued liabilities            $      8,453         $      7,579   
 Estimated liability for taxes on income                    1,426                1,245   
 Short-term borrowings and current portion                                               
 of long-term debt                                          2,121                1,377   
 Dividend payable                                           368                  337     
                                                            12,368               10,538  
 Long-term debt                                             9,509                8,556   
 Postretirement benefits                                    2,169                1,732   
 Deferred taxes                                             1,493                1,731   
 Other liabilities                                          1,150                1,252   
                                                            26,689               23,809  
 Equity                                                     34,858               31,392  
                                                     $      61,547        $      55,201  
                                                                                         


Net Debt

"Net Debt" represents gross debt less cash, short-term investments and fixed
income investments, held to maturity. Management believes that Net Debt provides
useful information regarding the level of Schlumberger`s indebtedness by
reflecting cash and investments that could be used to repay debt. Details of
changes in Net Debt for the full year 2012 follow:

                                                                                                                         
 (Stated in millions)                                                                                                    
                                                                                                                         
 Twelve Months                                                                 2012                                      
 Net Debt, January 1, 2012                                                     $    (4,850  )                            
 Income from continuing operations                                                  5,468                                
 Depreciation and amortization                                                      3,500                                
 Pension and other postretirement benefits expense                                  404                                  
 Excess of equity income over dividends received                                    (61     )                            
 Stock-based compensation expense                                                   335                                  
 Pension and other postretirement benefits funding                                  (673    )                            
 Increase in working capital                                                        (1,968  )                            
 Capital expenditures                                                               (4,695  )                            
 Multiclient seismic data capitalized                                               (351    )                            
 Dividends paid                                                                     (1,432  )                            
 Proceeds from employee stock plans                                                 410                                  
 Stock repurchase program                                                           (972    )                            
 Business acquisitions and investments, net of cash and debt acquired               (845    )                            
 Proceeds from the sale of Wilson and CE Franklin                                   1,027                                
 Other                                                                              (363    )                            
 Currency effect on net debt                                                        (45     )                            
 Net Debt, December 31, 2012                                                   $    (5,111  )                            
                                                                                                                         
                                                                               Dec. 31,                Dec. 31,          
 Components of Net Debt                                                        2012                    2011              
 Cash and short-term investments                                               $    6,274              $    4,827        
 Fixed income investments, held to maturity                                         245                     256          
 Short-term borrowings and current portion of long-term debt                        (2,121  )               (1,377  )    
 Long-term debt                                                                     (9,509  )               (8,556  )    
                                                                               $    (5,111  )          $    (4,850  )    
                                                                                                                         


Charges and Credits

In addition to financial results determined in accordance with US generally
accepted accounting principles (GAAP), this document also includes non-GAAP
financial measures (as defined under the SEC`s Regulation G). The following is a
reconciliation of these non-GAAP measures to the comparable GAAP measures:

                                                                                                                                                                                                                              
 (Stated in millions, except per share amounts)                                                                                                                                                                               
                                                                                                                                                                                                                              
                                                                  Fourth Quarter 2012                                                                                                                                         
                                                                  Pretax                   Tax                          Noncont.                  Net                      Diluted           Income Statement Classification  
                                                                                                          Interest                                    EPS                        
 Schlumberger income from continuing operations,                                                                                                                                                                              
 as reported                                                      $     1,807              $   436                      $      9                  $   1,362                $     1.02                                         
 Merger and integration costs                                           60                     10                              -                      50                         0.04        Merger & integration             
 Workforce reduction                                                    33                     6                               -                      27                         0.02        Restructuring                    
 Schlumberger income from continuing operations,                                                                                                                                                                              
 excluding charges & credits                                      $     1,900              $   452                      $      9                  $   1,439                $     1.08                                         
                                                                                                                                                                                                                              
                                                                  Third Quarter 2012                                                                                                                                          
                                                                  Pretax                   Tax                          Noncont.                  Net                      Diluted           Income Statement Classification  
                                                                                                          Interest                                    EPS                        
 Schlumberger income from continuing operations,                                                                                                                                                                              
 as reported                                                      $     1,857              $   442                      $      3                  $   1,412                $     1.06                                         
 Merger and integration costs                                           32                     4                               -                      28                         0.02        Merger & integration             
 Schlumberger income from continuing operations,                                                                                                                                                                              
 excluding charges & credits                                      $     1,889              $   446                      $      3                  $   1,440                $     1.08                                         
                                                                                                                                                                                                                              
                                                                  Fourth Quarter 2011                                                                                                                                         
                                                                  Pretax                   Tax                          Noncont.                  Net                      Diluted           Income Statement Classification  
                                                                                                          Interest                                    EPS(*)                     
 Schlumberger income from continuing operations,                                                                                                                                                                              
 as reported                                                      $     1,860              $   457                      $      5                  $   1,398                $     1.04                                         
 Merger and integration costs                                           22                     2                               -                      20                         0.01        Merger & integration             
 Write-off of assets in Libya                                           60                     -                               -                      60                         0.04        Cost of revenue                  
 Schlumberger income from continuing operations,                                                                                                                                                                              
 excluding charges & credits                                      $     1,942              $   459                      $      5                  $   1,478                $     1.10                                         
                                                                                                                                                                                                                              
                                                                  Twelve Months 2012                                                                                                                                          
                                                                  Pretax                   Tax                          Noncont.                  Net                      Diluted           Income Statement Classification  
                                                                                                          Interest                                    EPS(*)                     
 Schlumberger income from continuing operations,                                                                                                                                                                              
 as reported                                                      $     7,191              $   1,723                    $      29                 $   5,439                $     4.06                                         
 Merger and integration costs                                           128                    16                              -                      112                        0.08        Merger & integration             
 Workforce reduction                                                    33                     6                               -                      27                         0.02        Cost of revenue                  
 Schlumberger income from continuing operations,                                                                                                                                                                              
 excluding charges & credits                                      $     7,352              $   1,745                    $      29                 $   5,578                $     4.17                                         
                                                                                                                                                                                                                              
                                                                  Twelve Months 2011                                                                                                                                          
                                                                  Pretax                   Tax                          Noncont.                  Net                      Diluted           Income Statement Classification  
                                                                                                          Interest                                    EPS                        
 Schlumberger income from continuing operations,                                                                                                                                                                              
 as reported                                                      $     6,239              $   1,509                    $      10                 $   4,720                $     3.47                                         
 Merger and integration costs                                           113                    18                              -                      95                         0.07        Merger & integration             
 Donation to Schlumberger Foundation                                    50                     10                              -                      40                         0.03        General & administrative         
 Write-off of assets in Libya                                           60                     -                               -                      60                         0.04        Cost of revenue                  
 Schlumberger income from continuing operations,                                                                                                                                                                              
 excluding charges & credits                                      $     6,462              $   1,537                    $      10                 $   4,915                $     3.61                                         
                                                                                                                                                                                                                              
 (*) Does not add due to rounding                                                                                                                                                                                             
                                                                                                                                                                                                                              


                                                                                                                                                
 Product Groups                                                                                                                                 
 (Stated in millions)                                                                                                                           
                                     Three Months Ended                                                                                         
                                     Dec. 31, 2012                                             Sept. 30, 2012                                   
                                     Revenue                         Income                    Revenue                         Income           
                                                           Before                                                    Before         
                                                           Taxes                                                     Taxes          
 Oilfield Services                                                                                                                              
 Reservoir Characterization          $    3,150                      $    917                  $    2,910                      $    838         
 Drilling                                 4,137                           696                       4,048                           733         
 Production                               3,924                           590                       3,675                           548         
 Eliminations & other                     (37     )                       (39    )                  (25     )                       23          
                                          11,174                          2,164                     10,608                          2,142       
 Corporate & other                        -                               (180   )                  -                               (176   )    
 Interest income(1)                       -                               6                         -                               8           
 Interest expense(1)                      -                               (90    )                  -                               (85    )    
 Charges & credits                        -                               (93    )                  -                               (32    )    
                                     $    11,174                     $    1,807                $    10,608                     $    1,857       
                                                                                                                                                
                                                                                                                                                
 Geographic Areas                                                                                                                               
 (Stated in millions)                                                                                                                           
                                     Three Months Ended                                                                                         
                                     Dec. 31, 2012                                             Sept. 30, 2012                                   
                                     Revenue                         Income                    Revenue                         Income           
                                                           Before                                                    Before         
                                                           Taxes                                                     Taxes          
 Oilfield Services                                                                                                                              
 North America                       $    3,409                      $    655                  $    3,290                      $    610         
 Latin America                            2,071                           377                       1,860                           333         
 Europe/CIS/Africa                        2,958                           579                       2,985                           646         
 Middle East & Asia                       2,577                           601                       2,352                           570         
 Eliminations & other                     159                             (48    )                  121                             (17    )    
                                          11,174                          2,164                     10,608                          2,142       
 Corporate & other                        -                               (180   )                  -                               (176   )    
 Interest income(1)                       -                               6                         -                               8           
 Interest expense(1)                      -                               (90    )                  -                               (85    )    
 Charges & credits                        -                               (93    )                  -                               (32    )    
                                     $    11,174                     $    1,807                $    10,608                     $    1,857       
                                                                                                                                                


                                                                                        
 (1)    Excludes interest included in the Product Groups and Geographic Areas Results.  
                                                                                        


                                                                                                                                           
 Product Groups                                                                                                                            
 (Stated in millions)                                                                                                                      
                                     Twelve Months Ended                                                                                   
                                     Dec. 31, 2012                                             Dec. 31, 2011                               
                                     Revenue                         Income                    Revenue                    Income           
                                                           Before                                                    Before           
                                                           Taxes                                                     Taxes            
 Oilfield Services                                                                                                                         
 Reservoir Characterization          $    11,424                     $    3,212                $     9,929                $    2,449       
 Drilling                                 15,971                          2,824                      13,860                    2,254       
 Production                               14,875                          2,371                      13,136                    2,637       
 Eliminations & other                     (121    )                       (60    )                   34                        (35    )    
                                          42,149                          8,347                      36,959                    7,305       
 Corporate & other                        -                               (694   )                   -                         (590   )    
 Interest income(1)                       -                               30                         -                         37          
 Interest expense(1)                      -                               (331   )                   -                         (290   )    
 Charges & credits                        -                               (161   )                   -                         (223   )    
                                     $    42,149                     $    7,191                $     36,959               $    6,239       
                                                                                                                                           
                                                                                                                                           
 Geographic Areas                                                                                                                          
 (Stated in millions)                                                                                                                      
                                     Twelve Months Ended                                                                                   
                                     Dec. 31, 2012                                             Dec. 31, 2011                               
                                     Revenue                         Income                    Revenue                    Income           
                                                           Before                                                    Before           
                                                           Taxes                                                     Taxes            
 Oilfield Services                                                                                                                         
 North America                       $    13,485                     $    2,736                $     12,323               $    3,052       
 Latin America                            7,554                           1,387                      6,467                     1,074       
 Europe/CIS/Africa                        11,443                          2,245                      9,676                     1,477       
 Middle East & Asia                       9,194                           2,152                      8,102                     1,874       
 Eliminations & other                     473                             (173   )                   391                       (172   )    
                                          42,149                          8,347                      36,959                    7,305       
 Corporate & other                        -                               (694   )                   -                         (590   )    
 Interest income(1)                       -                               30                         -                         37          
 Interest expense(1)                      -                               (331   )                   -                         (290   )    
 Charges & credits                        -                               (161   )                   -                         (223   )    
                                     $    42,149                     $    7,191                $     36,959               $    6,239       


                                                                                        
 (1)    Excludes interest included in the Product Groups and Geographic Areas Results.  
                                                                                        


Oilfield Services

Full-year 2012 revenue of $42.15 billion increased 14% over 2011 with the
International Areas growing by 16% and the North America Area by 9%.
International revenue of $28.2 billion increased $3.9 billion from higher
exploration and development activity in a number of GeoMarkets-both offshore and
in key land markets. The international increase was led by the Europe/CIS/Africa
Area where revenue was up 18%, mainly from strength in Russia and in the Nigeria
& Gulf of Guinea, Angola, East Africa and North Sea GeoMarkets. Latin America
revenue grew by 17%, driven by strong Integrated Project Management (IPM)
activity on land, and robust offshore activity for Wireline services and
Drilling Group Technologies mainly in the Mexico & Central America; Venezuela,
Trinidad & Tobago; and Ecuador GeoMarkets. Middle East & Asia Area revenue
increased by 13% on strong results in the Saudi Arabia & Bahrain; Australasia;
Brunei, Malaysia & Philippines; and China GeoMarkets. North America revenue of
$13.5 billion increased $1.2 billion, driven by a 38% increase in offshore
revenue with robust deepwater and exploration services benefiting Reservoir
Characterization and Drilling Group Technologies, particularly in the US Gulf of
Mexico. North America land revenue improved by 4% on stronger Production Group
products and services although the increase was tempered by weakness in the
hydraulic fracturing market. 

By segment, Reservoir Characterization Group revenue of $11.4 billion increased
$1.5 billion, or 15%, with all product lines posting double-digit growth driven
by improved offshore exploration activity across all Areas. Drilling Group
revenue of $16.0 billion increased $2.1 billion, or 15%, led by strong growth in
M-I SWACO, Drilling & Measurements and Drilling Tools & Remedial products and
services. Production Group revenue of $14.9 billion increased $1.7 billion, or
13%, with double-digit growth posted by Well Intervention, Completions and
Artificial Lift Technologies. Well Services revenue also increased, although
this was mainly limited to international and North America offshore activity. 

Full-year 2012 pretax operating income of $8.3 billion increased $1.0 billion,
or 14%, as International pretax operating income of $5.8 billion increased 31%
while North America pretax operating income of $2.7 billion declined 10%
year-on-year. 

Pretax operating margin was essentially flat with the previous year at 19.8% as
International pretax operating margin expanded 226 basis points (bps) to reach
20.5% while North America pretax operating margin declined 448 bps to 20.3%.
Europe/CIS/Africa Area posted a 435 bps improvement to reach 19.6%, Latin
America increased by 175 bps to 18.4%, and Middle East & Asia improved by 27 bps
to 23.4%. The decline in North America was due to pricing pressure for Well
Services production technologies on land. By segment, Reservoir Characterization
Group pretax operating margin expanded 345 bps to 28.1% while pretax operating
margins of the Drilling and ProductionGroups were 17.7% and 15.9%, respectively.


Fourth-Quarter Results

Fourth-quarter revenue of $11.17 billion increased $567 million, or 5%
sequentially, and $873 million or 8% year-on-year on robust international
activity. Of the sequential revenue increase, approximately 36% came from the
typical year-end surge in product and software sales, and 12% came from the
increase in WesternGeco multiclient sales. Sequentially, Reservoir
Characterization Group revenue grew 8% to reach $3.2 billion, while Drilling
Group revenue of $4.1 billion was 2% higher. Production Group revenue increased
7% sequentially to $3.9 billion. Geographically, International revenue of $7.6
billion increased $409 million, or 6% sequentially, while North America revenue
of $3.4 billion grew by $118 million, or 4% sequentially. 

The sequential increase in Reservoir CharacterizationGroup revenue resulted
mainly from robust international end-of-year Schlumberger Information Solutions
(SIS) software sales. Testing Services grew for the third successive quarter
from higher activity in the Saudi Arabia & Bahrain GeoMarket. PetroTechnical
Services posted double-digit revenue growth on strong consulting activity in the
Mexico & Central America GeoMarket. WesternGeco increased slightly as the
end-of-year multiclient sales and UniQ* land seismic technology direct sale in
Russia were partly offset by a sharp seasonal decline in Marine revenue on lower
vessel utilization following the seasonal transits out of the North Sea.
Wireline revenue grew from increased activity in the US Gulf of Mexico but this
was largely offset by a seasonal activity decline in Asia. DrillingGroup revenue
increased on international and offshore demand for Drilling & Measurements and
M-I SWACO technologies. Drilling Tools & Remedial Services also contributed to
growth with the full-quarter revenue from Radius services. IPM improved slightly
as the combination of an increase in projects in Australia and new start-ups in
Iraq and Argentina was partly offset by project completions in North Africa. The
increase in ProductionGroup revenue resulted primarily from stronger Completions
and Artificial Lift product year-end sales coupled with new Framo subsea
projects in the US Gulf of Mexico and in the North Sea and Angola GeoMarkets.
Well Intervention Services revenue also increased on higher activity in the
Mexico & Central America and Saudi Arabia & Bahrain GeoMarkets. Well Services
revenue grew mainly due to higher activity in international and offshore North
America markets. Well Services stage count in North America land also increased,
but revenue declined from continued pricing weakness as a result of hydraulic
horsepower oversupply. 

Among the Areas, Middle East & Asia revenue of $2.6 billion grew 10%
sequentially led by the start of new IPM turnkey projects in Iraq; higher
Testing, Well Intervention and Drilling Group services in addition to year-end
product sales in the Saudi Arabia & Bahrain GeoMarket; the start of the Jurassic
seismic project as well as strong product and year-end software sales in Kuwait;
and the increase in IPM onshore projects and strong drilling activity in the
Australasia GeoMarket. In Latin America, revenue of $2.1 billion increased 11%
sequentially led by robust year-end software and product sales, strong
PetroTechnical Services consulting activity, unconventional fracturing and well
intervention stimulation activity in the Mexico & Central America GeoMarket.
Higher WesternGeco vessel utilization for new seismic acquisition surveys in
Brazil, Trinidad and Uruguay, coupled with the start of an IPM project in
Argentina, also contributed to the increase. In Europe/CIS/Africa, revenue of
$3.0 billion declined 1% mainly due to lower WesternGeco vessel utilization
following the seasonal transit of vessels out of the North Sea. Completed IPM
projects and service contract delays in North Africa and the completion of the
WesternGeco survey in the Kara Sea in Russia also contributed to the decline.
The sequential decrease, however, was partially offset by increased activity in
Angola and higher product and software sales in the Russia and Central Asia
region and the Continental Europe GeoMarket. North America revenue of $3.4
billion increased 4% sequentially-mainly from offshore which was up by 24%,
while land fell by 2%. The increase in offshore revenue resulted from both
higher drilling activity as the number of deepwater drilling rigs increased and
stronger year-end WesternGeco multiclient sales. The decline in land revenue was
mainly due to continued pricing weakness for Well Services hydraulic fracturing
activities. A seasonal decline in deviated and horizontal land drilling activity
paired with pricing weakness also affected the Drilling Group segment in North
America. 

On a worldwide basis, fourth-quarter pretax operating income of $2.2 billion
increased 1% sequentially and was flat year-on-year. International pretax
operating income of $1.6 billion grew 1% sequentially and 21% year-on-year,
while North America pretax operating income of $655 million increased 7%
sequentially but declined 31% year-on-year. 

Pretax operating margin of 19.4% declined 83 bps sequentially and decreased 169
bps year-on-year. International pretax operating margin of 20.5% declined 104
bps sequentially but increased 125 bps year-on-year. The sequential margin
decrease stemmed from a higher-than-usual seasonal slowdown and contractual
delays in the Europe/CIS/Africa Area that traditionally attract higher margins.
In North America, pretax operating margin of 19.2% increased 65 bps sequentially
but declined 764 bps year-on-year. Sequentially, margin expansion was due to the
increased contribution of high-margin offshore services, particularly in the US
Gulf of Mexico, which more than offset margin decline in Drilling Group and Well
Services activities on land. By segment, Reservoir Characterization Group pretax
operating margin reached 29.1% while the pretax operating margins of the
Drilling and ProductionGroups were 16.8% and 15.0%, respectively. 

Reservoir Characterization Group

Fourth-quarter revenue of $3.15 billion increased $240 million or 8%
sequentially, and grew $363 million or 13% year-on-year. Pretax operating income
of $917 million was 9% higher sequentially, and grew 18% year-on-year. 

Sequentially, revenue increased mainly through robust international end-of-year
SIS software sales while Testing Services grew for the third successive quarter
from higher activity in the Saudi Arabia & Bahrain and Mexico & Central America
GeoMarkets. PetroTechnical Services revenue also posted double-digit growth on
strong consulting activity in the Mexico & Central America GeoMarket.
WesternGeco increased slightly as the end-of-year multiclient sales and UniQ
land seismic technology direct sale in Russia were partly offset by the sharp
seasonal decline in Marine revenue on lower vessel utilization following
seasonal transits out of the North Sea. Wireline grew slightly on increased
activity in the US Gulf of Mexico following the recovery from the activity
shut-down associated with Hurricane Isaac in the previous quarter, but this was
offset by a seasonal activity decline in Asia, mainly in the Australasia and
China GeoMarkets. 

Pretax operating margin of 29.1% increased 31 bps sequentially and expanded 122
bps year-on-year. Sequential margin expansion was primarily due to traditionally
strong end-of-year sales of SIS software and WesternGeco multiclient licenses.
Testing Services, Wireline and PetroTechnical Services margins also expanded on
a more favorable technology mix in exploration and development projects. These
improvements were, however, subdued by lower WesternGeco Marine margin as a
result of lower vessel utilization. 

A number of technology highlights across the Reservoir Characterization Group
contributed to the fourth-quarter results. 

Offshore Malaysia, WesternGeco completed the world`s first commercial survey
using the ObliQ* sliding-notch broadband acquisition and imaging technique
combined with Coil Shooting* single-vessel full-azimuth acquisition for
PETRONAS. The Coil Shooting technique was selected to resolve illumination
challenges while the ObliQ technology provided greater penetration in deeper
targets. Data processing is underway in the Kuala Lumpur WesternGeco
GeoSolutions center. 

Offshore Indonesia, BP West Aru, a subsidiary of BP Plc in Indonesia, awarded
WesternGeco one of the largest 3D marine seismic surveys to be conducted in
Indonesia over a maximum of 9,000-km2 in the new concession blocks West Aru I
and II. The project will use Q-Marine Solid* streamer technology and include
extensive onboard data processing. 

Shell has awarded WesternGeco two 4D monitor surveys for Shell companies
including a survey for Shell Nigeria Exploration and Production Company (SNEPCO)
over the Bongo field in Nigeria and a survey for Sarawak Shell Berhad (SSB)
offshore Malaysia. The Nigeria survey will be conducted by the WG Amundsen using
Q-Marine Solid streamer technology and is the second 4D survey WesternGeco has
performed for SNEPCO over this field. The Malaysian 4D survey will be acquired
by the Western Patriot. 

Following a number of successful surveys in the North Sea and in Trinidad &
Tobago, BP has awarded WesternGeco additional contracts for the North Sea,
including two surveys using the Q-Seabed* multicomponent seabed seismic system
and two 4D monitor surveys using the DISCover* broadband deep interpolated
streamer coverage seismic technique. The projects will commence in Q2 2013. 

Offshore UAE, Wireline Flow Scanner* horizontal and deviated well production
logging technology in combination with the RST* reservoir saturation tool was
run for ZADCO, a consortium between ADNOC, ExxonMobil and JODCO, on a horizontal
well using the MaxTRAC* downhole well tractor system. The tools were conveyed to
total depth with two logging runs made over a producing interval that contained
several inflow control devices. The combination of the tools' measurements
enabled a successful determination of the well flow profile, and the
mechanically complex operation experienced no downtime and yielded all required
data. 

In Myanmar, Wireline ReSOLVE* instrumented intervention technology was deployed
to set a plug to shut off unwanted water production from an onshore well for
Petronas Carigali Myanmar (Hong Kong) Limited. The ReSOLVE tool was conveyed by
TuffTRAC* cased hole services tractor technology that enabled running through
completions restrictions to reach the plug-setting depth, overcoming previous
unsuccessful attempts using conventional mechanical means. During the operation,
ReSOLVE technology provided an indication of operational status in real time,
including positive confirmation of the plug setting. 

In the Gulf of Thailand, Wireline MDT Forte-HT* rugged high-temperature modular
formation dynamics tester and lnSitu Fluid Analyzer* technologies were deployed
for PTTEP in three Arthit field wells in the high-temperature North Malay basin.
The technology was instrumental in obtaining representative formation pressures
and conclusive fluid identification and CO2 content, which provided the
customer`s asset team critical information in real time on reservoir fluid
composition by distinguishing dry gas from gas condensate, and on reservoir
fluid properties at downhole conditions, including CO2 content and formation
permeability. 

In Oman, Wireline FMI-HD* fullbore formation microimager technology has been
deployed for PDO on deep tight gas exploration wells drilled with both oil- and
synthetic-based drilling fluids. This provided images with superior resolution
in high resistive formations and higher borehole coverage. This resulted in
better structural definition, more accurate breakout information for
geomechanical modeling, and better interval selection for MDT* modular formation
dynamics tester technologies. 

In the UK sector of the North Sea, Wireline PowerJet Nova* extra deep
penetrating shaped charges set a new world record for the longest single
wireline-conveyed perforating run in a well for Taqa Bratani in the Pelican
field. The PowerJet Nova charges perforated a 421-ft interval and were conveyed
by an extra-strength cable deployed by a high-tension logging unit. Dual Secure*
detonators provided perforating system redundancy while conveyance system
enhancements led to operational efficiency, lower costs and greater safety. Job
execution was flawless. 

In the US Rockies, SureLog* Thrubit wireline triple-combo logging technology was
used to log a 10,000-ft horizontal section of an Oasis Petroleum well in the
Bakken formation, at a formation depth of more than 10,000 ft. By using ThruBit*
logging services, the customer was able to maintain circulation, deploy the
logging tools, and log the well─all during the conditioning trip. The robust
battery and tool design allowed 37 hours of continuous operation, enabling a
petrophysical evaluation of the horizontal section, and a thorough analysis of
completion options using data that were previously unavailable. 

In the geologically complex Kansas Mississippian Lime, the SureLog Thrubit
wireline triple-combo logging suite was used for Osage Resources to optimize
well completion design and improve performance relative to adjacent wells. The
horizontal log showed significant porosity and lithology changes along the
lateral length and enabled design of fracturing stage lengths, water volumes and
perforation clusters for treatment optimization. Based on interpretation of the
log data, Osage Resources decided to add an additional fracturing stage to the
completion design. 

In Turkmenistan, the Wireline Dielectric Scanner* multifrequency dielectric
dispersion service was deployed for the first time in the country for CNPC
International Turkmenistan. Dielectric Scanner technology clearly showed the
gas-water contact and established the interpretation parameters needed to
evaluate gas saturation in the low-porosity carbonate reservoir. 

In Myanmar, Schlumberger Testing has been awarded two separate contracts for
services on deepwater exploration and appraisal wells in the Zawtika field for
PTTEP International Limited. The services consist of full well testing packages,
including surface well testing, fluid sampling, subsea test tree, drillstem test
and tubing conveyed perforating. 

In Pakistan, Testing Services HPHT CERTIS* high-integrity reservoir test
isolation technology combined with Signature* quartz high resolution HPHT gauges
successfully performed six fracturing jobs in different Kadanwari tight gas
formations for Eni. Fracturing and flow back operations were completed over 39
days and the technology combination saved rig time and offered greater safety,
reliability and operational flexibility. 

In Brazil, SIS was awarded a contract to provide software, training and services
to ANP─the Brazilian Petroleum Agency. Schlumberger will provide key
technologies that include Petrel* E&P software and ECLIPSE* reservoir simulation
covering all E&P domains from geology and geophysics to petroleum engineering.
Schlumberger software will be used by the ANP on studies for areas to be offered
in the country's 11th oil and gas tender round, expected to take place in 2013. 

In Colombia, integration of Schlumberger well placement and completion
technologies with PetroTechnical Services expertise helped New Granada Energy
drill and complete the first horizontal well in a field in the Eastern Llanos
Basin. Drilling & Measurements PeriScope* bed boundary mapper data were used in
planning an openhole completion designed to prevent sand production and maximize
reservoir contact. With an achieved production index of 30% and water cut of
less than 1%, New Granada Energy have planned four additional wells on this
field. 

The Schlumberger Reservoir Geomechanics Center of Excellence in the UK has
completed a 3D geomechanical modeling of the deepwater carbonate Jabuti field,
which forms part of the Petrobras Marlim Leste oilfield in the Campos basin,
Brazil. The project was executed by cross-disciplinary teams from Petrobras and
Schlumberger PetroTechnical Services based in Brazil, the UK and Denmark. Key
technologies were combined for the first time in this project, including seismic
AVO inversion, rock physics, 3D full-field and near-wellbore stress models,
structural restoration and geomechanical forward modeling. The results revealed
how the complex interactions between depletion, natural fractures, stresses and
permeability play a critical role in controlling field production and well
stability and integrity. 

In Brazil, Schlumberger PetroTechnical Services was awarded an integrated
geomechanics study for drilling optimization and production risk evaluation in
the deepwater Atlanta field operated by Queiroz Galvão Exploracão e Producão
(QGEP). A 4D mechanical earth model was central to the study, and enabled the
customer to select and optimize solutions for wellbore stability, sand
production, compaction, subsidence and fault reactivation as well as quantify
the impact and risk of different production scenarios. 

Drilling Group

Fourth-quarter revenue of $4.1 billion increased $88 million or 2% sequentially,
and grew $332 million or 9% year-on-year. Pretax operating income of $696
million was 5% lower sequentially, but increased 7% year-on-year. 

Sequentially, revenue increased on international and offshore demand for
Drilling & Measurements and M-I SWACO products and services. Drilling Tools &
Remedial Services activity also contributed to growth with a full-quarter of
revenue for Radius services. IPM revenue grew slightly, as increased projects in
Australia and new start-ups in Iraq and Argentina were partly offset by project
completions in North Africa. The overall revenue increase was tempered by a
decline in drilling-related services, mainly in North America land, due to a
seasonal decline in deviated and horizontal drilling activity coupled with
pricing weakness. 

Pretax operating margin of 16.8% decreased 128 bps sequentially and decreased 26
bps year-on-year. Among the Group Technologies, sequential margins in Drilling &
Measurements and Drilling Tools & Remedial Services were flat, while margin
contractions were recorded at M-I SWACO and IPM due to geographical mix and
operational and start-up delays. 

A number of Drilling Group technologies contributed to the fourth-quarter
results. 

In the UAE, ZADCO, a consortium between ADNOC, ExxonMobil and JODCO, awarded
Schlumberger the integrated drilling services contract on the first two
artificial islands (North & South) for the Upper Zakum field, offshore Abu
Dhabi, one of the world's largest oil fields. The three-year contract represents
the first integrated drilling services contract awarded in the United Arab
Emirates. 

In Malaysia, Schlumberger set three world records using CASING DRILLING
technology in the Angsi D14 well for PETRONAS Carigali Sdn Bhd (PCSB). These
records covered the highest inclination of 82.3º; the deepest 13 3/8-in
casing-while-drilling interval to 1,550 m; and the longest Level 3 directional
drilling interval with 13 3/8-in casing run to 1,361 m. 

In the South China Sea, Drilling & Measurements PeriScope* bed boundary mapper
technology was deployed in a horizontal well drilling campaign to enable CNOOC
Panyu Operating Company to develop highly mature reservoirs with remaining thin
oil columns. PeriScope technology enabled accurate placement of the lateral
sections within 0.5 m of the reservoir top for optimum drainage and reduction of
attic oil. The wells have been producing oil at high rates with very low or zero
water cut and the Drilling & Measurements team has been recognized by Panyu
Operating Company for their contribution to this performance. 

In the Black Sea, Drilling & Measurements StethoScope* formation
pressure-while-drilling service was deployed to test multiple zones in a well
for the Turkish Petroleum Corporation (TPAO) to enable calibration of the pore
pressure model in real time. This allowed TPAO to eliminate the requirement for
drilling a 10 5/8-in section, resulting in significant cost savings. 

In Nigeria, Drilling & Measurements StethoScope formation
pressure-while-drilling technology was used for Total to estimate pore pressure
in the reservoir sands penetrated while drilling. With better understanding of
the pore pressure regime, the customer was able to place the casing deeper and
saved a casing string compared to the original program. In addition, the
pressure points measured were used to calculate formation fluid mobility and
helped optimize the subsequent MDT modular formation dynamics tester sampling
program. 

In Algeria, Drilling & Measurements PowerV* vertical drilling technology
provided controlled well verticality below 0.35º in a highly dipping formation
in the Zemoul el Kbar field for Groupement Sonatrach Agip (GSA). The technology
was used to drill a total of 3,481 m and controlled well trajectory within a
1.4-m lateral displacement. This drilling performance saved the customer three
days compared to previous wells drilled with standard technology. In addition,
the PowerV technology yielded excellent wellbore quality to run logs and deploy
casing. 

In Poland, Schlumberger PowerDrive Archer* high build rate rotary steerable
system technology with customized Smith drill bits were used to build
inclination from vertical to horizontal in a complex-geometry well in the
Lubocino field for Polskie Górnictwo Naftowe i Gazownictwo (PGNiG). PowerDrive
Archer technology built the curve in a single run, successfully landing the well
safely at the required target to overcome the challenges that conventional
motors had faced in this sequence of formations in the past. 

In Russia, the integration of Drilling & Measurements PowerDrive* rotary
steerable technology, M-I SWACO MEGADRILL* system, and Smith drill bits achieved
a new Russian drilling record for LUKOIL with the longest 8 1/2-in section in a
single run with the highest average rate of penetration. As a result,
performance improved from 22.1 days/1000 m down to 9.5 days/1000 m and the
operation, which resulted in excellent hole quality, allowed the first two-stage
completion worldwide with distributed temperature sensing and inflow control
device screens. 

In Russia, Schlumberger Drilling Group technologies were deployed for Eriell
Corporation on several projects in the West Siberia and Volga-Urals regions. On
one well in the Urengoyskoe field, Smith Viking drill bits, developed and
manufactured for Russia, were used with Drilling & Measurements positive
displacement motors to achieve new performance benchmarks, and with Drilling &
Measurements PowerDrive X5* rotary steerable systems where the rate of
penetration was doubled compared to previous wells. On another well in the
Nizhne-Kamenskoe field, the combination of Smith Neyrfor* turbodrilling systems
and customized Smith drill bits helped decrease drilling times in one hole
section by 133%. 

In Russia, Drilling Group technologies helped Rosneft drill an extended-reach,
sidetrack re-entry campaign in the Odoptu-morye field. A combination of Drilling
& Measurements PowerDrive X6* rotary steerable technology with specifically
designed Smith drill bit and engineered jars drilled a 1,990-m sidetrack with a
complex 3D well path. The EcoScope† multifunction logging-while-drilling service
for well placement was used with Schlumberger PetroTechnical Services
interpretation of data from SonicVISION* sonic-while-drilling tools to optimally
place a Smith Trackmaster* whipstock system. This integrated approach resulted
in the well being drilled seven days ahead of plan. 

In Russia, integration of Drilling & Measurements and Smith drillbit
technologies delivered record performance for Rosneft Vankor in the Vankorskoe
development project. On one well, the PowerDrive vorteX* powered rotary
steerable system and customized Smith drill bit were assisted by Schlumberger
rate of penetration optimization software to reach the total depth nearly 10
days ahead of schedule, setting the field's highest daily meterage. By combining
this integrated drilling package with EcoScope multifunction
logging-while-drilling technology, further rig time savings were achieved. 

In Brazil, integration of Drilling Group technologies including the PowerV
vertical drilling system, RHELIANT* synthetic-based drilling fluids and
customized Smith drill bits helped Shell reduce the drilling time of two presalt
wells in the Santos Basin by 15 days. The technology and methodology proposed by
Schlumberger contributed to these wells being within the top quartile of similar
wells in Brazil. 

In Norway, a Drilling Tools & Remedial Services bottomhole assembly, designed
and optimized by the Smith i-DRILL* engineered drilling system, was deployed for
Talisman using a 12 1/4-in bit combination with a staged hole opener (SHO) and a
Rhino XC* on-demand hydraulically actuated reamer. The well section was drilled
and under-reamed with an average rate of penetration 28% faster than that
planned. The Rhino XC tool correctly activated and deactivated below the
measurement-while-drilling tools with no problems experienced while pulling out
of hole through swelled clays. Downhole shock and vibration were minimal,
verticality was maintained within 0.4°, and the drilled section was completed 13
hours ahead of plan. 

In Brazil, Smith drill bits and Schlumberger Dynamic Pressure Management
services successfully performed a percussion drilling operation on a well in the
São Francisco onshore basin for Petra Energia. By using combined air hammers,
hammer bits and managed pressure drilling technologies, a rate of penetration
178% greater than the field average was achieved. Such tailored engineering
solutions are helping Petra Energia`s exploration program by drilling more
efficiently with reduced risk and cost. 

In Russia, Schlumberger IPM was awarded a three-year exploration contract by
Bashneft Polyus, a joint venture between Bashneft and Lukoil, for the Trebsa and
Titova fields in the north-western territories. This region contains one of the
remaining major unexplored onshore oil fields in Russia. Schlumberger will
provide drilling and completion services under IPM management. 

Production Group

Fourth-quarter revenue of $3.9 billion increased $249 million or 7%
sequentially, and grew $221 million or 6% year-on-year. Pretax operating income
of $590 million was 8% higher sequentially, but declined 24% year-on-year. 

Sequentially, the increase in revenue resulted primarily from stronger
Completions and Artificial Lift product year-end sales coupled with new Framo
subsea projects in the US Gulf of Mexico and in the North Sea and Angola
GeoMarkets. Well Intervention Services revenue increased on higher activity in
the Mexico & Central America and Saudi Arabia & Bahrain GeoMarkets. Well
Services revenue grew mainly due to higher activity in the international and the
North America offshore markets. International activities were strong from
stimulation vessel operations in Brazil, unconventional fracturing activity in
Mexico, and new projects in Kuwait and Iraq. Well Services stage count in North
America land also grew but land revenue declined on continued pricing weakness
from the oversupply of hydraulic horsepower. 

Pretax operating margin increased 13 bps sequentially to 15% but declined 590
bps year-on-year. The sequential increase was largely attributable to the
favorable impact of year-end Completions and Artificial Lift product sales
coupled with improved profitability from new Framo subsea projects. This margin
increase was largely offset by continued Well Services pricing weakness. 

Highlights during the quarter included successes in a number of Production Group
technologies. 

In Argentina, Schlumberger has been awarded an integrated services contract by
Shell for their exploration campaign in the unconventional Vaca Muerta formation
of the Neuquen basin. The 18-month contract encompasses project management, well
engineering and execution of well construction services including formation
evaluation, reservoir stimulation, coiled tubing, and well testing. The first
horizontal exploration well was successfully spudded in October, 2012. 

In Pakistan, Losseal* reinforced composite mat pill technology was deployed for
Oil & Gas Development Company Limited (OGDCL) while running the 9 5/8-in casing
string in two Naspha wells on the Potwar Plateau following total loss of
circulation prior to pumping cement. Heavy weight 16.5 and 17 ppg Losseal pills,
which extended the established range of the technology, were used as spacer
material and restored circulation to ensure subsequent zonal isolation. 

In India, Well Services ThermaFRAC* shear-tolerant, high temperature fracturing
fluid has been successfully used at a depth of 4,400 m and a temperature of 325
deg F in a land well for Cairn Energy India Pty Ltd in the KG Basin in the state
of Andra Pradesh. Close collaboration between Cairn Energy India and
Schlumberger optimized the ThermaFRAC fluid design as well as the overall job
design. 

In Tunisia, Well Services executed the first openhole multistage HiWAY*
flow-channel hydraulic fracturing operation for STORM Venture International in
the Bin Tartar field. The treatment included seven stages using HiWAY technology
that resulted in significantly reduced operating time from seven to three days
with no premature treatment terminations. 

In Congo, Well Services PropGUARD* technology has been deployed for Eni in the
Mboundi field with PropGUARD fiber being added during the last proppant stage of
a hydraulic fracturing treatment. The well responded to the treatment, naturally
flowing before being lifted with no proppant being observed at surface during
the flowback and testing. PropGUARD fiber application hydraulic fracturing
treatments have become the solution of choice for increasing oil production when
it is necessary to prevent sand production at the same time. 

In Peru, Schlumberger Well Services has been awarded a 12-well stimulation
contract by Maple Gas Corporation del Peru S.R.L to stimulate vertical wells on
the mature Agua Caliente and Maquia fields. Job planning and execution on the
first well showed outstanding results, with oil production increasing by a
factor of 10 with reduced water cut. 

In Kuwait, Well Intervention Services performed the first ACTive* in-well live
performance with distributed temperature sensing (DTS) and ABRASIJET* hydraulic
pipe-cutting and perforating service on an openhole horizontal well in the tight
Mauddud limestone reservoir for Kuwait Oil Company. Based on the interpretation
of the DTS temperature profile, ABRASIJET technology successfully jetted across
the damaged zones to create slots, leading to increased reservoir contact and
bypassing of near wellbore damage. These innovative technologies played a key
role in the well`s incremental oil production. 

Also in Kuwait, Well Intervention Services deployed ACTive in-well live
performance with DTS on a stimulation operation in a Kuwait Oil Company well in
the Burgan field which had been drilled and completed in 1994 but not placed on
production. Based on interpretation from temperature profiles obtained by DTS
and the provided openhole logs, the pumping schedule was adjusted and the fluids
were placed in an optimized manner across the openhole section targeting the
potential oil zones in order to obtain uniform stimulation of the tight
reservoir section. The well is now producing oil at a rate of 600 bbl/d as a
result of this technology application. 

Elsewhere in Kuwait, Schlumberger Well Intervention Services Discovery MLT*
multilateral tool and ACTive in-well live performance were used to enter a
lateral section in a well for Joint Operations. A stimulation treatment was
performed to bypass damage using real-time fiber-optic DTS permanent monitoring
technology. Post-treatment production attained satisfactory results, leading to
plans for similar operations in the development of multilateral wells of the
South Fawares field. 

Offshore Egypt, Well Intervention Services deployed ACTive in-well live
performance technology with DTS in a stimulation operation for Petrobel. This
intervention enabled identification of excess water producing zones and
real-time decision-making to isolate them. In parallel, the gas zone was
stimulated using a through-tubing inflatable packer, which was successfully set
using ACTive downhole data. This single rig-up intervention maximized
operational efficiency, minimized equipment footprint, and helped save four days
of offshore rig time. 

In Saudi Arabia, the first ACTive in-well live performance matrix service was
deployed on a well stimulation job with ABRASIJET hydraulic pipe-cutting and
perforating service. These technologies enabled the cutting of slots at the
target zones while monitoring and optimizing the placement of stimulation fluids
and diversion efficiency using DTS. Post-stimulation well performance exceeded
expectations. 

In Tunisia, Eni has deployed Schlumberger LIVE* digital slickline services on
interventions to re-perforate old, non-producing offshore wells on a
two-wellhead platform with limited deckspace and crane-lifting capacity.
Wireline eFire* electronic firing head technology was used for the first time in
combination with DSL* digital slickline technology, correlated in real time on
multiple runs. Following intervention, both wells were completed successfully
and brought back online. LIVE services offer an efficient lightweight, low
footprint solution, capable of providing conventional slickline operations with
advanced perforating technology with the same crew and equipment. 

About Schlumberger

Schlumberger is the world`s leading supplier of technology, integrated project
management and information solutions to customers working in the oil and gas
industry worldwide. Employing more than 118,000 people representing over 140
nationalities and working in approximately 85 countries, Schlumberger provides
the industry`s widest range of products and services from exploration through
production. 

Schlumberger Limited has principal offices in Paris, Houston and The Hague, and
reported revenues of $42.15 billion in 2012. For more information, visit
www.slb.com. 

*Mark of Schlumberger or of Schlumberger Companies. 

†Japan Oil, Gas and Metals National Corporation (JOGMEC), formerly Japan
National Oil Corporation (JNOC), and Schlumberger collaborated on a research
project to develop LWD technology. The EcoScope and NeoScope services use
technology that resulted from this collaboration. 

Notes

Schlumberger will hold a conference call to discuss the above announcement and
business outlook on Friday, January 18, 2013. The call is scheduled to begin at
8:00 a.m. US Central Time (CT), 9:00 a.m. Eastern Time (ET). To access the call,
which is open to the public, please contact the conference call operator at
+1-800-230-1059 within North America, or +1-651-291-5254 outside of North
America, approximately 10 minutes prior to the call`s scheduled start time. Ask
for the "Schlumberger Earnings Conference Call." At the conclusion of the
conference call an audio replay will be available until February 18, 2013 by
dialing +1-800-475-6701 within North America, or +1-320-365-3844 outside of
North America, and providing the access code 269201. 

The conference call will be webcast simultaneously at www.slb.com/irwebcast on a
listen-only basis. Please log in 15 minutes ahead of time to test your browser
and register for the call. A replay of the webcast will also be available at the
same web site. 

Supplemental information in the form of a question and answer document on this
press release and financial information is available at www.slb.com/ir. 

Schlumberger Limited
Malcolm Theobald, +1 (713) 375-3535
Vice President of Investor Relations
or
Joy V. Domingo, +1 (713) 375-3535
Manager of Investor Relations
investor-relations@slb.com

Schlumberger Limited 

Copyright Business Wire 2013