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The world’s biggest oilfield services company is expanding in Russia following the exit of its main western rivals since Moscow’s full-scale invasion of Ukraine. SLB, the Houston-based company formerly known as Schlumberger, has signed new contracts and recruited hundreds of staff in the country even after its two largest US rivals Baker Hughes and Halliburton both sold their Russian businesses to local managers in 2022. Peter Voser, chair of Swiss-based ABB, which also left in 2022, said: “We accept that some others will maybe not follow that and hence, they may have a competitive advantage. But I think that’s a short-term viewpoint and that will bite them at some stage.” Documents obtained by non-profit group Global Witness and seen by the Financial Times show that in December SLB’s Russian business signed a contract with the Russian oil and gas institute Vnigni, which commits the company to help it build models of oil and gas deposits that can be used to develop projects. The FT has identified more than 1,000 job advertisements posted by the company since December, seeking roles that range from drivers to chemists and geologists. Benefits on offer range from lunch at work and access to sports facilities to participation in discounted share schemes. Searches of Russian trademark and corporate databases by the FT show SLB Russian subsidiaries registered two new trademarks in July. SLB has been upfront that it has no plans to leave Russia. But in July 2023 the company said it was “halting shipments of products and technology into Russia from all SLB facilities worldwide in response to the continued expansion of international sanctions”. Russian customs filings show that after this ban was imposed, such imports slowed to a stop by the start of September. But filings show the company also continued to import materials from other sources, bringing in $17.5mn of equipment between August and December 2023, the most recent date of available records. Of this, $2.2mn was declared as having been originally manufactured by SLB or its subsidiaries. SLB declined to comment. A person close to the company said the imports were not “from an SLB facility” and are therefore “consistent with SLB’s public statements and within international sanctions guidelines”. Oilfield services providers carry out much of the grunt work for the global oil and gas industry — everything from building roads and laying pipes to drilling wells and pumping crude. But they also provide access to sophisticated technologies that are vital to support exploration and development of complex drilling operations. Some of the goods SLB imported into Russia are of types that other governments have expressed concerns about: $3.3mn of the equipment shipped since July is in categories that could be subject to controls if exported from the EU to the country. The most expensive items in this category are described in filings as electrical cabling and chemicals. The goods, however, come from countries applying no such controls. Most of the flow of SLB imports — $13mn worth — came from China, while a further $3mn came from India. The most expensive single part was a $1.3mn “heavy-duty non-magnetic drill pipe”, which was shipped from China. SLB has supplied equipment to some of Russia’s largest oil companies, including Lukoil. In 2022 and 2023 it provided Lukoil with drilling tools and hydraulic packers. Human rights groups and the Ukrainian government allege SLB’s work in the country helps to generate billions of dollars of oil revenues to support the Kremlin’s war effort. Last year, Ukraine’s National Agency on Corruption Prevention (NACP) added SLB to an “international sponsor of war” blacklist.
But western policymakers have avoided imposing comprehensive sanctions on oilfield services in Russia over concerns it would choke off fossil fuel exports and cause a spike in global oil prices. In May, a US Department of State official said SLB had “thus far” not breached sanctions and the company had a clear understanding of “where the guardrails” were. A Treasury spokesperson told the FT: “The United States and an international coalition opposing Russia remain committed to reducing [Vladimir] Putin’s profits. At the same time, simply aiming to stop the flow of Russian oil would have serious consequences for the global economy.” “Western energy firms are still free to help Russia produce oil, and to help fund the war,” said Lela Stanley, a senior investigator for Global Witness, which is set to issue a report on SLB on Friday. “That’s a profound failure.”
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The post Top US oil group expands in Russia as rivals pull out appeared first on Energy News Beat.
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