SLB, an oilfield services provider, said on Friday that its current business in Russia aligns with the U.S. sanctioned this month but revenue is declining in Russia.
After the 2022 invasion of Ukraine, one of only a few Western companies that will remain in Russia is the world’s largest oilfield services company.
SLB faces pressure to leave Russia following the U.S. Treasury Department’s new sanctions on Jan. 10. These included an executive order that cut off Russia’s access to U.S. Services related to the production and extraction of crude oil, and other petroleum products. According to the sanctions, companies have until February 27 to cease operations.
Both parties of U.S. Congress urged Treasury to close the loophole that allowed SLB to operate within Russia. They claim this boosts revenue for Russian President Vladimir Putin’s war against Ukraine.
The new Treasury guidance, which ‘cuts access to U.S. Services related to the Extraction of Crude Oil’, would force U.S. Oilfield Services Companies out of Russia,” stated U.S. Rep. Lloyd Doggett.
Donald Trump’s future policy towards Russian sanctions remains uncertain. The President Joe Biden sanctions were meant to help Trump reach a deal with Ukraine.
SLB has reviewed the new sanctions. It believes the voluntary measures taken by the company to curb its Russian activities, such as halting the shipments of products and technology from SLB’s worldwide facilities, are in line with the new restrictions. Chief Executive Officer Olivier Le Peuch stated this on Friday during an earnings call.
SLB increased its quarterly dividend, accelerated its share repurchases and warned of flat revenue in 2025 due to oil oversupply.
He said that revenue from SLB’s operations in Russia is declining. It will account for only 4% of the company’s total revenue by 2024. This is down from 5% in 2018.
(source: Reuters)
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