Schlumberger Annual Report 2015

FY2015 Annual Report · Schlumberger
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2015 Annual Report

Schlumberger Limited

Financial Performance

(Stated in millions, except per-share amounts)

Year ended December 31 

Revenue 
Income from continuing operations 
Diluted earnings-per-share from continuing operations 
Cash dividends per share 
Net debt 

Safety Performance

Year ended December 31 

Combined Lost Time Injury Frequency (CLTIF)—Industry Recognized 
Auto Accident Rate mile (AARm)—Industry Recognized 

2015 

2014 

$ 35,475 
$   2,072 
$     1.63 
$     2.00 
$   5,547 

$ 48,580 
$  5,643 
$     4.31 
$     1.60 
$   5,387 

2013

$ 45,266
$   6,801
$     5.10
$     1.25
$  4,443

2015 

2014 

0.95 
0.21 

1.03 
0.24 

2013

1.19
0.24

Schlumberger is the world’s 
leading supplier of technology, 
integrated project management, 
and information solutions to the 
international oil and gas industry.

The company employs more than  
95,000 people who represent more than 
140 nationalities working in approximately 
85 countries. Schlumberger supplies a 
wide range of products and services, 
including seismic data acquisition 
and processing; drill bits and drilling 
fluids; directional drilling and drilling 
services; formation evaluation and well 
testing;  well cementing and stimulation; 
artificial lift, well completions, and well 
intervention; and software and information 
management.

Table of Contents

Financial and Safety Performance   
  2    Letter to Shareholders
  5     Performed by Schlumberger
  6    Transformation as a Pathway to Growth
  8  Developing New Technology
12    Optimizing Shared Services
16     Accelerating Our Transformation
22    Our Transformation Advantage
27  Annual Report on Form 10-K
Directors, Officers, and Corporate Information 

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Inside Front Cover

Inside Back Cover

1

Front Cover  
Geoscientist Sasha Arenas analyzes microseismic data in a struc-
tural model using the Petrel* platform at the Digital Technology 
Theatre in Houston, Texas. The interpretation of microseismic  
data helps engineers to better understand hydraulically induced 
fracture system geometry to optimize stimulation treatments and 
improve well economics.

Inside Front Cover  
Electronic Technician Lusakueno Mateus and Field Specialist 
Daniel Egodo review an equipment checklist in preparation for  
an upcoming cementing operation on a deepwater drillship off  
the coast of Angola.

Letter to Shareholders

Schlumberger revenue of $35.5 billion in 2015 represented a drop of 

27% from 2014 due to customer spending falling as commodity prices 

weakened  during  the  year.  Revenue  in  North  America  decreased  

39%, driven by a land rig count that ended the year 68% lower than the 

peak seen in 2014, as well as by pricing pressure that intensiﬁed during 

the year. North American offshore revenue fell more modestly as rigs 

in the US Gulf of Mexico shifted from exploration to development 

work, although the overall market in North America was the weakest 

for  oilﬁeld  services  since  1986.  Internationally,  revenue  declined  

21% as customers cut budgets and pressured service pricing, with 

these  effects  often  exacerbated  by  activity  disruptions,  project 

delays, and cancellations.

Paal Kibsgaard 
Chairman and Chief Executive Ofﬁcer

In the  oil markets, the negative sentiments  that  had dominated the year accelerated during the fourth quarter 
after some optimism earlier in the summer. The impact of OPEC lifting production targets to produce at maximum 
rates, combined with production in North America from unconventional resources declining slower than expected 
following the April peak, has led to supply continuing to exceed increasing demand. As a result, commodity prices 
fell dramatically, with oil dropping to a 12-year low by the end of the year. These weaker fundamentals drove industry 
exploration and production (E&P) capital investment signiﬁcantly lower.

In the natural gas markets, US production grew to a record of 75 Bcf/d as new ﬁelds in the US Gulf of Mexico 
were brought into production and supplies from unconventional shale gas and tight oil reservoirs continued to grow. 
This trend is expected to continue with newly completed pipeline capacity in the northeast United States bringing 
new supplies. A relatively mild start to the winter together with North American gas storage levels well above 
the ﬁve-year average is keeping natural gas prices low. Internationally, European gas demand growth returned to 
positive territory. Despite this increased demand, storage levels are at record highs due to ample supply from the 
North Sea and Russia, as well as from liqueﬁed natural gas (LNG). Demand rebounded in Asia but remained in 
a downward trend overall. As LNG exports from Australia grow, the region is likely to remain oversupplied with 
low natural gas prices persisting.

Our ﬁnancial performance in 2015 was signiﬁcantly impacted by the large decrease in land activity, particularly 
in  the  US,  where  the  year-end  land  rig  count  numbered  less  than  700  rigs.  This  created  massive  overcapacity 
in  the  land  market  that  impacted  pricing  levels  across  a  broad  range  of  oilﬁeld  services.  Internationally, 
revenue  in  the  Europe,  CIS  &  Africa  Area  fell  by  26%  as  a  result  of  the  weakening  Russian  ruble,  and  due  to 
a  drop  in  exploration  activities  in  the  North  Sea  and  Sub-Saharan  Africa.  In  Latin  America,  revenue  declined 
22% due to decreased activity in Mexico, Brazil, and Colombia as a result of sustained budget cuts that led to rig count 
reductions. Middle East & Asia Area revenue decreased 17% on lower activity in the Asia Paciﬁc region, particularly in 
Australia, although this was partially offset by robust activity in the Gulf Cooperation Council countries, particularly 
Saudi Arabia, Kuwait, and Oman. 

2

Among the Groups, Reservoir Characterization performance was impacted by sustained cuts in exploration spending, 
currency weaknesses, and operational disruptions from exhausted customer budgets that affected Wireline activities. 
For the Drilling Group, the drop in drilling activity coupled with persistent pricing pressure, currency weaknesses, 
and operational disruptions lowered Drilling & Measurements and M-I SWACO revenues across all geographies, but 
most signiﬁcantly in the Europe, CIS & Africa Area. Production Group performance was mainly affected by the fall in 
North American land activity as exhausted customer budgets led to a continued decline in rig count and increased 
pricing pressure. 

In spite of falling activity, new technology sales remained robust across all Groups during the year, representing  
24% of total sales and proving the value that innovative technology can bring when delivered with increased efﬁciency 
and higher reliability. The third quarter saw the pressure pumping stage count for BroadBand* unconventional reservoir 
completion services reach almost 12,000 and pass the milestone of generating more than $1 billion in cumulative 
revenue since its introduction in late 2013. This performance is more than three times the success of the earlier HiWAY* 
ﬂow-channel fracturing technique, which already represented a step change in new product introduction.

2015 Revenue

24% 

New Technology

In  terms  of  health  and  safety,  our  performance  improved 
further in 2015. Our continued focus on driving and journey 
management  led  to  a  decrease  in  our  auto  accident  rate 
of  more  than  8%  compared  with  2014.  One  of  the  major 
contributing  factors  to  this  improvement  has  been  our 
investment in the Schlumberger Global Journey Management 
Center  network  that  continues  to  monitor  trips  made  in 
countries that we consider to exhibit medium and high driving 
risk. In environmental matters, we have shown that many of 
our  technologies  are  playing  increasing  roles  in  lowering 
environmental impact while optimizing the production and 
recovery of nonrenewable resources efﬁciently and reliably. 
These are documented in our ﬁrst Global Stewardship Report, 
which illustrates that our approach to sustainability is rooted 
in our global culture.

76% 

Despite today’s weak market for oilﬁeld services, we delivered 
strong corporate ﬁnancial results in 2015. At the beginning 
of 2015, the Board of Directors approved an increase in the 
quarterly dividend to $0.50 cents per share. This conﬁdence 
has  been  justiﬁed  by  our  generation  of  $5  billion  in  free 
cash ﬂow during the year, after taking into account capital 
expenditures of $2.4 billion and investment in future revenue 
streams of $1.4 billion. We have returned $4.6 billion in cash to our shareholders through a combination of dividend 
payments and stock buy-backs. In addition, we have spent about $500 million on technology acquisitions that broadened 
our portfolio in a number of key products and services. Yet we increased our net debt by only $160 million due to our 
ability to generate cash, which is unmatched in the oilﬁeld services industry. This has given us an unrivalled ability to 
capitalize on a variety of signiﬁcant business opportunities.

Other Revenue

3

Among  these  opportunities  was  the  August  announcement  of  our  agreement  to  acquire  Cameron  International 
Corporation, the company with which we formed the OneSubseaTM joint venture in June 2013. The rationale for this 
acquisition lies in our belief that the industry’s next technical breakthrough will be achieved through the integration 
of Schlumberger downhole reservoir and well technologies with Cameron surface drilling, processing, and ﬂow control 
technologies. Further development of instrumentation, software, and automation abilities will enable us to launch 
a new era of complete drilling and production system performance. On November 17, we received unconditional 
clearance from the US Department of Justice. We expect to close the transaction in the ﬁrst quarter of 2016, which 
remains subject to other regulatory approvals and conditions in our merger agreement with Cameron. 

The industry’s next technical  
“
breakthrough will be achieved 
through the integration of 
Schlumberger downhole reservoir 
and well technologies with Cameron 
surface drilling, processing, and  
ﬂow control technologies.

”

In this uncertain environment, we continue to focus on what we can control. Throughout the year we took a number 
of actions to navigate through the current market downturn, including a reduction in our workforce. There is no easy 
way to let go of employees and everyone at Schlumberger has been affected by this difﬁcult process. We will be better 
prepared when activity rebounds due to arranging a temporary leave of absence for more than 1,800 employees.

In spite of this, we remain constructive in our view of the market outlook in the medium term and continue to believe 
that the underlying balance of supply and demand will tighten. This will be driven by growth in demand, weakening 
supply as the massive E&P investment cuts take effect, and the size of the annual supply replacement challenge. In 
continuing to accelerate the beneﬁts of our transformation program across both our Technologies and GeoMarket 
regions in 2016, we believe that we will emerge as a stronger company once the price of oil and the market conditions 
in our industry improve. 

On behalf of all the Schlumberger people around the world, I want to thank our customers for their conﬁdence and 
support. I would also like to personally thank our employees for their commitment and focus during what has been a 
very difﬁcult year in the oil and gas E&P industry.

Paal Kibsgaard

Chairman and Chief Executive Ofﬁcer

4

Performed by Schlumberger

Samarang Integrated Operations Team receives its award from Chairman and CEO Paal Kibsgaard (far left) and Senior Vice President Sales and 
Marketing Bill Coates (far right, back) at the annual celebratory dinner in Paris, France. From the left are Shripad Biniwale, Muzahidin Salim, 
Yasser El-Yamany, Nur Erziyati Rabtah Seruji, and Christopher Singh.

Schlumberger people thrive on the challenge to excel. Their 
commitment to customers, technical innovation, safety, and 
quality is the reason Schlumberger is a leader in the oilﬁeld 
services industry. The Performed by Schlumberger program 
recognizes projects and its team members throughout the 
company  who  have  demonstrated  exceptional  levels  of 
teamwork, innovation, and business impact for Schlumberger 
and its customers.

In the 16th year of the program, 660 projects competed 
in 2015 for the highest accolade, the Chairman’s Award. The 
award  recognizes  one  project  as  an  outstanding  example 
that reinforces the company’s core values: our people, our 
commitment  to  technology,  and  our  determination  to 
produce superior proﬁts.

The  Samarang  Integrated  Operations  (IO)  team  won  
this  year’s  award  with  a  project  that  greatly  improved 
operational performance through the integration of people, 
processes, and technology. In a technology partnership with 
Petronas, Schlumberger is leading a digital transformation 
to  improve  asset  management  by  rejuvenating  100  wells 
among 12 platforms in the Samarang ﬁeld.

Discovered in 1972, the ﬁeld produced its ﬁrst oil in 1975 
but declined steadily over the years and was expected to 
become uneconomic by 2017. In 2010, Schlumberger formed 
a 10-year asset management alliance that recharacterized 

21 reservoirs and included a ﬁeld redevelopment plan as 
well  as  drilling  and  production  management.  The  risk-
reward  partnership  between  Schlumberger  and  Petronas 
involves  an  integrated  operations  approach  and  the 
implementation of a full-ﬁeld, gravity-assisted, simultaneous 
water-alternating-gas enhanced oil recovery process.

The  Samarang  IO  project  delivered  a  high  level  of 
efficiency  via  smart  instrumentation  and  automation, 
intelligent workﬂows, and multidisciplinary collaboration. 
The collaborative work environment includes staff at three 
locations—Samarang  Offshore,  Kota  Kinabalu  regional 
center,  and  Kuala  Lumpur  headquarters—with  support  
staff  from  more  than  10  Schlumberger  product  lines. 
Samarang IO represents a successful digital transformation 
program that integrates 12 new technologies and more than 
100 existing technologies.

As a result, the Samarang alliance’s use of an integrated 
operations approach has delivered a threefold production 
increase and 70% efﬁciency gains. In addition, reserves have 
increased by 9 million barrels and the life of the ﬁeld was 
extended by 18 years to 2035. 

The  Samarang  IO  project  is  a  prime  example  of  the 
technology innovation, reliability, efﬁciency, and integration 
themes underpinning our transformation program.

5

Transformation as a  
Pathway to Growth

The energy industry is challenged by increasingly greater change, from competing 
sources of supply to shifting patterns in demand. Nonetheless, the International 
Energy Agency continues to forecast that oil and gas will continue to fulﬁll half of the 
world’s growing primary energy demand through 2040.  This will require increasing 
oil production by 12 mb/d while replacing the 47 mb/d of supply that will be lost to 
decline over the same period. It will also require increasing natural gas production by 
47%, with unconventionals as a larger market share of this percentage.  At the same 
time, the precipitous fall in the price of oil has led to the longest industry downcycle 
in 30 years. The resulting lower investment in exploration and production activity 
compels the industry to rethink its strategies and operating models. 

Schlumberger believes that the most effective response to these challenges is to create a step 
change in the way the industry ﬁnds, develops, and produces hydrocarbons. As the leading 
global oilﬁeld services company, our investment in technology has helped our customers gain 
access to new reserves, increase reservoir recovery and production, and maximize their returns. 
Moving forward, we see signiﬁcant opportunities in changing the way we work to respond to the 
immediate business challenges our customers face and to lay the foundation for a distinct  
and sustainable competitive advantage.

6

For nearly 90 years, a focus on the science of measure-
ment  has  established  Schlumberger  as  the  leading  tech-
nology provider for the oil and gas services industry. Our 
customers depend upon us to acquire data and maximize its 
use to achieve their exploration and production goals and 
reduce subsurface risk. An integral part of this focus has 
always been the conviction that achieving success means 
there is still room for improvement. 

This is why in 2007, during a period of healthy market 
growth, we challenged ourselves by asking how we could 
improve upon what we do and the way we do it. Ultimately, 
this  challenge  established  new  ways  of  working  that 
focus on technology innovation and increasing reliability,  
efﬁciency, and integration. Changing our way of working 
throughout the company meant that every process, system, 
and behavior had to be placed under the magnifying glass 
for objective assessment. 

We  began  our  transformation  journey  in  late  2007  by 
analyzing  the  process  of  new  technology  development 
in  our  Research  and  Engineering  organization.  By  2014,  
a  $350  million  investment  in  the  transformation  estab-
lished  the  Engineering,  Manufacturing,  and  Sustaining  

organization  as  well  as  the  Schlumberger  Product 
Development  Method,  which  is  now  used  throughout  the 
company.  In  addition,  subsequent  growth  in  2010  due 
to  the  Smith  International  and  Geoservices  acquisitions  
precipitated the creation of a Shared Services Organization 
in  2011  to  streamline  internal  processes  and  establish 
regional centers to improve ﬁeld operations support.

When oil prices began to decline in 2014, we were already 
seven years into our transformation journey. Schlumberger 
and its customers are now realizing even greater beneﬁts 
through our transformation, such as improved product reli-
ability through better engineering design and maintenance, 
and increased process reliability via a fully upgraded man-
agement system, leading to increased operational perfor-
mance. On the basis of our experience thus far, we decided 
to  accelerate  the  transformation  program  by  introducing 
new phases into existing themes.

Transformation as a pathway to growth is driven by our 
key themes of technology innovation, reliability, efﬁciency, 
and integration. While the transformation journey has much 
to show from our efforts, some of which is presented here, 
there is still much we plan to accomplish. 

7

Pages 6–7:  Field Specialist Roni Cedeno (far left)  
and Assistant Wellsite Supervisor Jhony Gomez  
(far right, blue coveralls) collaborate with Consortium 
Shushuﬁndi rig staff to drill the next phase of a  
well in the Shushuﬁndi ﬁeld.

This Page:  M-I SWACO Research Chemist Sujita 
Mainali observes new chemistry samples in the 
hydrate test rig in Stavanger, Norway. The rig  
quantiﬁes the performance of low-dose hydrate 
inhibitors in test cells under ﬁeld conditions.

8

Developing New 
Technology 

In 2007, Schlumberger took a critical look at the complex process of developing  

new technology. From invention to design, manufacturing, and a product’s total 

lifecycle, objective analysis by multidisciplinary teams found that while we did  

some things well, there were distinct areas for improvement. The three key areas 

included increasing the rate of technology innovation, reducing the time to market, 

and improving product reliability and performance.

Among  the  primary  discoveries  were  the  need  to  bal-

ance technical ambitions with commercial ones and to  
take  better  advantage  of  the  size  of  our  company.  In  
particular, this applied to our broad technical community  
and the use of proven building blocks that we describe as 
enabling technologies.

Building Enabling Technologies
One  outcome  was  the  formation  of  the  Enabling  Tech-
nologies  Group,  a  new  part  of  the  product  development  
organization.  The  group  creates  and  develops  technical  
building  blocks  that  help  reduce  the  technical  risk  on  
major product development programs. These are created 
simultaneously with product development with the ambi-
tion to have a set of standardized components that can be  
used  in  multiple  products.  This  approach  is  more  cost  
effective and helps improve our ability to commercialize 
on time. 

Furthermore,  our  out-of-the-box  product  delivery  is  
now  more  reliable  than  it  was  due  to  an  approach  that 
includes improved project management, aligning enabling 

technologies, and engaging concurrent teams early in the 
process. The transformation not only allowed us to reﬁne the  
development  and  commercialization  process,  but  also  
accelerated it to get more new products to the market.

“

Investment in new technology  
development is something  
that Schlumberger has always 
 highly valued.

”

As a technology company in the global oil and gas ser-
vices industry, we knew our sheer size would create its own 
set of challenges as we set out to transform the way we work.  
Investment  in  new  technology  development  is  something 
that Schlumberger has always highly valued, even in down-
turns, and it enables us to emerge from difﬁcult times with  
a  stronger  portfolio  to  assist  our  customers  in  achieving 
their objectives.

9

Microelectronics Take the Heat 

Among 

the  ﬁrst 

technologies 

to  beneﬁt 

from 

the 

transformation  of  our  product  development  process  was 

the  TeleScope  ICE*  ultrahigh-temperature  measurements-

while-drilling  service.  The  technology  is  a  milestone  in  an 

extensive line of Schlumberger measurement-while-drilling 

services,  which  were  ﬁrst  introduced  in  the  1980s  as  a 

means to optimize well trajectory in real time. TeleScope ICE 

service uses proprietary microelectronics that are ruggedized 

to  withstand  the  challenging  conditions  associated  with 

drilling ultrahigh-temperature reservoirs. 

Schlumberger  engineers  applied  a  systems  engineering 

approach  borrowed  from  the  aircraft  industry.  The  design 

process  included  deﬁning  potential  failure  modes  and 

ﬁnding  solutions  that  were  expected  to  have  the  highest 

impact on reliability. 

Key  priorities  included  an  improvement  in  product 

reliability  along  with  the  reuse  of  some  of  TeleScope  ICE 

service’s  technical  components,  or  enabling  technologies, 

in  the  design  of  other  tools  and  services.  Accordingly, 

TeleScope ICE service was tested beyond the limits of its 

mission proﬁle to build in additional reliability. 

The proprietary microelectronics in TeleScope ICE service 

are  also  used  in  PowerDrive  ICE*  ultrahigh-temperature 

rotary steerable system and Signature* quartz gauges. The 

technology  employed  by  PowerDrive  ICE  service  means 

that  customers  can  now  use  a  rotary  steerable  system  in 

ultrahigh-temperature reservoirs. 

Examples such as these, in which enabling technologies 

are used across multiple product lines, are the direct result 

of the transformation of our product development process. 

This avoids a siloed approach to product development and 

also provides economies of scale as the manufacturing costs 

for these technical components decrease.

10

Senior Electrical Engineer Alexandra Deshayes uses a high- 
resolution microscope to examine an ICE sensor board to identify 
potential weakness following ultrahigh-temperature testing in 
Clamart, France.

Adopting World-Class Manufacturing Practices
After assessing how to increase reliability, efﬁciency, and 
integration, we concluded that there were certain disciplines 
we needed to add or reinforce in our product development 
teams. Thus, we complemented core engineering skills with 
skills from manufacturing engineers, supply chain special-
ists, and reliability and maintainability experts, sometimes 
with experience from other industries.

In manufacturing, we started our focus on the applica-
tion of LEAN principles on the production line. Today, a 
Schlumberger manufacturing facility looks very different 
than it did 10 years ago. Standard Work Instructions (SWI), 
visual workﬂows, and improving the required skill levels 
for various manufacturing operations now dominate. Our 
assembly and manufacturing lines are thus more agile and 
efﬁcient, achieving greater levels of quality and more unit 
output per line.

A litmus test of any commercialized product is the level 
of reliability it achieves during its early introduction. In the 
past it was not uncommon for us to create a task force to 
resolve problems that arose after new releases. However, 
products  developed  using  our  new  method  have  demon-
strated signiﬁcant improvements and we no longer have to 
create task forces. Overall, the product development trans-
formation created a 60% increase in our ability to introduce 
new and higher-impact technologies per dollar spent.

Today,  the  more  than  80  centers  that  make  up  our 
Research and Engineering, Manufacturing, and Sustaining 
organizations use the Schlumberger Product Development 
Method, the proprietary result of a $350 million investment 

Oilﬁeld technology is subject to environmental conditions, such as high temperatures and pressures, severe mechanical shocks, and 
vibration. Electrical Technology Engineer Guillaume Deville examines internal components of an electrical circuit board in Clamart,  
France, using a high-resolution optical microscope to identify potential weaknesses following qualiﬁcation testing.

to transform the way we develop technology. The technolo-
gies resulting from this investment exhibit increased quality 
and reliability and achieve higher levels of efﬁciency com-
pared with previous generations. 

Looking to the Future
What does product development look like for Schlumberger 
in the future? With the size and breadth of our organiza-
tion, our teams will build systems that are integrated at the 
design stage in order to improve product reliability and efﬁ-
ciency in our customers’ workﬂows. 

Software and data are key drivers to achieving these goals 
and are what we refer to as IT enablement. Combining this 
with the way we manage our hardware development portfo-
lio makes product development more efﬁcient. By capturing 
the important data at the front end, we are better equipped 
to make data-driven decisions that help to perfect design 

during the development process. Similarly, IT enablement 
makes the manufacturing systems of the future more agile 
and efﬁcient, particularly when customizing a product for a 
speciﬁc application. 

Furthermore,  by  focusing  on  industrialization  at  the 
front end of the design process, we can respond to customer 
input more swiftly when it comes to the customization layer 
around a product platform’s core design. This approach also 
makes us more adaptable in meeting customer requirements 
in a timely manner as the oil and gas market rapidly evolves.
Though the initial phase of the engineering and manu-
facturing transformation is complete, we continue to evolve, 
especially the manufacturing process. Future goals include 
the  extensive  use  of  automation,  in  particular  for  large- 
volume products, and building digitally enhanced factories 
that provide continuous information that helps us achieve 
greater levels of quality, efﬁciency, and cost reduction.

11

Storeskeeper Xavier Villarreal and 
Assistant Segundo Loza perform a  
chemical inventory cycle count using 
barcodes and a mobile scanner to update 
stores at the Coca Base in Ecuador.

12

Optimizing Shared  
Services

Schlumberger has grown considerably during the last ﬁve years as a result of the 

Smith International and Geoservices acquisitions in 2010. With the broadest 

technology portfolio in the industry, it was clear to us that the lessons learned 

during our transformation of Research and Engineering could be applied to the 

entire organization. The next logical step on our transformation journey was to 

create a Shared Services Organization (SSO) for our support functions that leveraged 

our size to enable proﬁtable growth and manage business cycles more efﬁciently. 

O ur goal was to develop a more agile structure to respond 

to market conditions and simplify the interface between 

ﬁeld operations and support functions.

In  the  beginning,  we  identiﬁed  approximately  14,000 
people  in  the  company  who  performed  tasks  that  would  
be under the purview of the SSO. Once identiﬁed, we cate-
gorized the tasks into functional areas in order to stream-
line  the  organizational  structure  and  centralize  certain 
tasks  within  geographical  or  regional  locations.  Once 
we  built  the  SSO  platform,  the  next  step  was  to  develop  
best-in-class functions and explore how to further optimize 
their processes.

Centralizing Shared Functions
The shared services concept is not new, of course, as other 
best-in-class  companies  have  successfully  applied  it  to  
individual  functions  within  their  businesses  (e.g.,  HR, 
ﬁnance, IT). Schlumberger, however, applied the shared 
services concept to bring together seven functions under 
one  roof:  ﬁnance,  HR  support,  IT  operations,  procure-
ment and sourcing, contracts, distribution, and facilities  
and  construction.  This  effectively  eliminated  the  siloed 

approach associated with tasks that were duplicated across 
multiple product lines.

Collectively, the SSO model beneﬁts from three distinct 
business  principles.  By  sharing  volume-sensitive  services 
across product lines, we create economies of scale and elim-
inate superﬂuous efforts. Transferring best practices across 
businesses and leveraging expertise and know-how capture 

“

The next phase is to move from a 
function-based approach to a  
process-based approach, which 
enables the product lines to be  
more customer focused.

”

economies of scope. Lastly, tailoring the level of service to 
meet a product line’s needs achieves scalability. The service 
categories we identiﬁed can be performed at a higher level 
of quality and improved cost levels under the SSO than if 
they are pursued individually by each product line.

13

Creating Cost Synergies

The Manggar facility in Balikpapan, Indonesia, is an excellent 

example of how optimizing ﬁeld operations support creates 

synergies  and  cost  savings  within  product  and  service 

delivery workﬂows. Before 2014, the nine product lines in this 

facility worked independently to complete 28 common tasks 

that were divided between 21 ﬁeld direct employees, 28 base 

personnel, and 16 third-party contractors. In addition, a 20% 

increase  in  ﬁeld  activity  unsettled  the  work-life  balance  of 

ﬁeld direct employees in the Well Services, Well Intervention, 

Completions, and M-I SWACO product lines.

 Analysis identiﬁed the amount of time personnel spent 

on each task and its relative complexity. After grouping tasks 

into  several  categories  based  on  similarities  in  the  scope 

of work, they were mapped to the personnel best suited to 

complete the work. For example, a few tasks were assigned 

to  the  Materials  group  while  others  were  consolidated 

and managed by one product line for all of them. However, 

the  majority  of  tasks  were  assigned  to  a  Shared  Base 

Support  organization  made  up  of  three  teams:  operations, 

maintenance, and administration. The overarching goal was 

to consolidate existing facility personnel and avoid the need 

to increase support services headcount.

  Optimizing  Manggar  base  support  in  September  2014 

meant that 21 ﬁeld direct employees can now solely focus on 

ﬁeld operations and avoid spending time on common tasks 

at  the  base.  This  also  helped  ﬁeld  personnel  regain  their 

work-life  balance  while  simultaneously  accommodating 

the  current  increase  in  ﬁeld  activity.  The  Manggar  Shared 

Base Support transformation story created a capacity gain 

of  16  base  personnel,  which  avoids  the  need  to  increase 

headcount, and also amounts to an annualized cost savings 

of approximately $1 million while maintaining a high level 

of service quality.

14

As the SSO reduces its operating costs, this can reduce 
the costs for individual product lines as well. For example, 
implementing  a  new  logistics  framework  optimized  the  
$1.2  billion  the  product  lines  collectively  spent  on  these 
services.  This  created  numerous  beneﬁts,  such  as  faster 
turnaround  for  tools  and  improved  project  readiness  for 
deepwater operations.

Taking the SSO to the Next Level
Now that we have deﬁned functions under the SSO, the next 
phase is to move from a function-based approach to a pro-
cess-based approach, which enables the product lines to be 
more customer focused. This would identify one person as 
the focal point, with ownership of every stage of the process 
and charged with continually seeking to optimize it.

Furthermore, as the company continues to grow its busi-
ness through organic and inorganic means, the SSO will take 
advantage of business synergies and ensure that it offers 
superior levels of service at the lowest transactional costs.

An aerial view of the Manggar facility in Balikpapan, Indonesia, 
which provides support for ﬁeld operations. This facility collocates a 
dedicated base support team that performs and manages tasks that 
are common across multiple product lines. 

An Agile Response 

Well  Services  hydraulic  fracturing  operations  in  North 

America  land  have  seen  multiple  beneﬁts  from  adopting 

new ways of working to optimize the supply chain function. 

The  procurement  and  timely  delivery  of  high-quality 

proppant and ﬂuids to the wellsite are critical to the success 

of hydraulic fracturing operations.

Recognizing that the supply chain can be a differentiator 

in the dynamic North American hydraulic fracturing market, 

Schlumberger has taken it to a new level by more closely 

aligning  the  supply  chain  with  business  needs  through 

Sales & Operations Planning (S&OP). This included creating 

a consistent process for S&OP, introducing professionalized 

planning systems, and improving the connectivity between 

the supply chain and the business.

In addition, Well Services centralized the management 

of product allocation and delivery. Here the main emphasis 

is  on  managing  proppant  via  the  creation  of  a  product 

control  tower  that  focuses  on  minimizing  landed  costs  to 

the operating locations. This centralized hub does all of the 

planning, tactical sourcing, and purchase order generation 

to  ensure  cost-effective,  industry-leading  service  delivery 

of  proppant  to  the  ﬁeld.  In  2015,  control  tower  personnel 

oversaw  the  delivery  of  5.2  million  tons  of  proppant  to  

the  wellsite,  equivalent  to  the  weight  of  approximately  

712 Eiffel Towers. 

Logistics plays an important role in product allocation 

and  delivery.  A  centralized 

logistics  tower  oversees 

the  movement  of  product  and  equipment  used  in  North 

American hydraulic fracturing operations. State-of-the-art 

IT,  including  mobile  technology,  enables  efﬁcient  carrier 

procurement and invoicing and provides real-time visibility 

of our logistics network. In 2015, Well Services made nearly 

300,000 trips to the wellsite to deliver proppant, ﬂuids, and 

equipment over a distance of 52 million miles—equivalent 

to nearly 2,100 trips around the equator.

15

Well Services pressure pumping equipment deployed on a wellsite in 
South Texas in the Eagle Ford Shale play. The site is prepared for a 
hydraulic fracturing operation using BroadBand unconventional  
reservoir completion services.

For example, the Cameron acquisition, which is still sub-
ject to regulatory approvals, will integrate our reservoir and 
well technology with an industry leader in surface process 
and ﬂow control and marks the start of a new epoch in drill-
ing and production system performance. Cameron has ﬁve 
product  lines—drilling  systems,  subsea,  surface  systems, 
valves  and  measurement,  and  process  systems—and  thus 
there is very little product line overlap with Schlumberger. 
Customers will beneﬁt from expanded technical capabilities, 
improved efﬁciency, and a closer commercial alignment to 
lower the cost per barrel and increase recovery. 

The  Schlumberger  global  footprint  includes  500,000 
transactions a month and a global inventory currently with 
a value close to $5 billion. Optimizing the SSO will have a 
substantial impact on our ﬁnancial performance. When our 
footprint increases to include Cameron, we will be able to 
expand upon the beneﬁts of our transformation due to our 
increased buying power and cost synergies. 

16

Operator Delcio Manasses, 
Electronic Technician 
Lusakueno Mateus, and Field 
Specialist Daniel Egodo on a 
deepwater semisubmersible 
drilling rig offshore Angola.

Accelerating Our 
Transformation

As we continue on our transformation journey to improve technology, reliability, 

efﬁciency, and integration, we have moved into a new phase that includes their 

accelerated deployment and expanding engagement throughout the company  

as we evolve toward new ways of working.

O riginally,  two  organizations  oversaw  the  Schlumberger 

technology lifecycle—Engineering, Manufacturing, and 
Sustaining  (EMS)  and  ﬁeld  operations.  First,  EMS  would 
develop and manufacture new technology that it released 
to operations. Operations would deliver the services asso-
ciated with the technology and also perform the necessary 
maintenance on ﬁeld equipment. The Sustaining function 
was responsible for supporting the technology once it was 
released to the ﬁeld. Because 80% to 85% of the total cost of 
ownership (TCO) of tools and equipment accumulates from 
the time they are deployed to the day they are retired, there 
is a signiﬁcant upside to improving an asset’s management 
throughout its lifecycle. 

Adopting Technology Lifecycle Management
This is why we combined the maintenance and sustaining 
activities to create the Technology Lifecycle Management 
(TLM)  organization,  which  acts  as  a  bridge  between 
Engineering and Manufacturing and ﬁeld operations. The 
TLM organization establishes industry-leading maintenance 
processes and ensures that sustaining activities are aligned 
with the speciﬁc demands of operations that vary among 
GeoMarket regions.

The organization has a mandate to reduce the TCO of an 
asset from the time it arrives in the ﬁeld to the moment it is 
retired. By improving asset management, TLM can provide 

the most reliable tools and equipment to operations in a 
timely manner and at the lowest cost. In addition, the orga-
nization provides critical feedback for the product develop-
ment cycle to improve reliability, maintainability, and the 
total cost of ownership for the future generations of tools 
and equipment.

“

Reliability Centered Maintenance 
improves asset reliability and  
manages the consequences of  
failure by predicting catastrophic  
failures in advance.
”

As  TLM  improves  product  reliability,  the  reduction  of 
failures also reduces the nonproductive time rate (NPTr), 
which  reﬂects  the  number  of  lost-time  hours  due  to  fail-
ures and is expressed as a ratio of the total hours worked. 
Reducing NPTr increases asset availability and subsequently 
reduces maintenance costs. 

The  TLM  organization  is  complemented  by  regional 
Centers for Reliability and Efﬁciency that centralize assets 
and  the  maintenance  and  sustaining  experts  required  to 
maintain them. These centers play a key role in ensuring 

17

service reliability by monitoring tools and equipment to pre-
vent failures before they occur. The Centers for Reliability 
and Efﬁciency work in conjunction with a network of main-
tenance  bases  to  perform  timely,  reliable,  and  efﬁcient 
repairs and maintenance.

Taking a cue from the aviation industry, we have imple-
mented Reliability Centered Maintenance for our tools and 
equipment. This is a multidisciplinary process for reliability 
that eliminates unnecessary maintenance and manages the 
consequences of failure. When jet aircraft were ﬁrst intro-
duced,  their  accident  rate  was  high  compared  to  today’s 
standards. After close study, the aviation industry discovered 
the three basic tenets of Reliability Centered Maintenance.
The ﬁrst tenet is that unnecessary maintenance causes 
failures. Facts show that tools and equipment do not fail the 
way we think they do, and preventive maintenance works only 
for age-related failures. Second, managing the consequences 
of failures is important. The failure itself is not the problem, 
it is what happens after the failure occurs that is the problem. 
Finally, a company must take a multidisciplinary approach 
toward reliability. It starts with the design and continues in 
the operations and maintenance phases, but also requires 
highly skilled staff for each step along the way.

Field Engineer Ana Beatriz Andrade reviews a ﬁeld operations 
checklist while Maintenance Technician Jose Alves Branco 
prepares a downhole testing tool for ﬁeld deployment in  
Luanda, Angola.

18

Reliability  Centered  Maintenance  improves  asset 
reliability and manages the consequences of failure by pre-
dicting  catastrophic  failures  in  advance.  This  knowledge 
also provides critical input into the need to build additional 
redundancy,  or  backup  safety  features,  during  the  engi-
neering phase. All of this enables Schlumberger to reduce 
nonproductive time. 

One example of predicting failures is a proprietary mobile 
application Schlumberger created for monitoring our frac-
turing pumps within North America. We collect many vari-
ables from a hydraulic fracturing pump every second, and 
the mobile application analyzes them to alert ﬁeld personnel 
when the pump’s reliability rating is approaching its operat-
ing limit and it should be replaced before a failure occurs. 
In fact, we collect vast amounts of data on all of our tools, so 
we continue to explore how this can help us predict failures.
Asset utilization also plays a key role in the technol-
ogy  management  lifecycle.  As  the  number  of  failures  is 
reduced  and  repairs  are  completed  in  a  timely  manner, 
the total nonproductive time decreases. As maintenance 
time decreases, asset operating time increases and results 
in improved asset utilization.

In addition, by centralizing and investing in asset track-
ing  systems  that  provide  real-time  data  throughout  the 
globe, we are able to use our assets more efﬁciently. This 
provides us with greater ﬂexibility in moving equipment to  
accommodate changing activity levels and leads to additional 
revenue.  At  the  same  time,  this  translates  to  a  decrease 
in  capital  expenditures  without  slowing  delivery  of  new  
technologies to the market.

The  cornerstone  of  our  TLM  organization  is  the  com-
petency  of  our  world-class  maintenance  and  sustaining 
personnel. Our competency management approach forges 
a  higher  degree  of  professionalism,  accountability,  and 
responsibility.

Driving Operations Integrity
Product-related failures account for a quarter of the reli-
ability  issues  our  customers  face,  and  revitalizing  the 
Engineering and Manufacturing organization has begun to 
address this. Product reliability for tools and equipment is 
quantiﬁed by the NPTr, which reﬂects the number of lost-
time hours due to failures and is expressed as a percentage 
of the total hours worked. From 2011 to 2014, Engineering 
and Manufacturing achieved an 80% reduction in product- 
related NPTr.

Electronic Technician Thaanis Kanason and Maintenance Expert 
Nicolas Laporte investigate the electronics of TeleScope* telemetry-
while-drilling service by using a thermal camera in the Asia CRE 
in Port Klang, Malaysia. Testing for unusual thermal patterns is a 
proactive quality check before the tool is deployed downhole.

The  next  challenge  on  our  transformation  journey  is 
to address the remaining three-quarters of our reliability 
issues,  which  are  related  to  operational  processes.  The 
Operations Integrity organization enables ﬁeld operations 
to provide the highest quality of service to our customers by 
focusing on best-in-class operational processes.

The three key drivers for the organization are standard-
izing work, promoting procedural adherence, and ensuring 
competency. Service delivery managers and their crews are 
provided with the tools, processes, and coaching to estab-
lish a high level of consistency for the services they provide. 
These crews have the training and experience required but 
also undergo independent assessment to validate their com-
petence. The overall results are safer, more efﬁcient and 
reliable operations that mitigate process risk. 

Taking another cue from the aviation industry, we added 
checklists  and  emergency  checklists  to  further  improve 
operations  reliability  and  efﬁciency.  For  example,  ﬂight 
deck checklists ensure that crew members properly conﬁg-
ure the airplane for different stages of ﬂight (taxi, takeoff, 
etc.). Checklists are visual or oral aids that help crew mem-
bers overcome the limitations of short-term memory in order 
to perform action or veriﬁcation items without referencing 
a manual. These checklists are kept as short as possible to 
minimize diversion of the crew’s attention while performing  
the checklists.

While the application of checklists is appropriate for  
speciﬁc types of procedures, they were not enough for our 
purposes.  Schlumberger  tools  and  equipment  require  a 
more physical interaction during operations and mainte-
nance. This is why the Operations Integrity organization  
implemented  Standard  Work  Instructions  (SWI),  which  

Boosting Reliability and Efﬁciency

Our  Centers  for  Reliability  and  Efﬁciency  (CRE)  improve 

the  interaction  between  Engineering  and  Manufacturing 

and ﬁeld operations. Acting as regional asset maintenance 

hubs, CREs provide an advanced level of maintenance and 

service for tools and equipment while low to medium levels 

of maintenance remain in ﬁeld locations.

The  ﬁrst  CRE  opened  in  May  2015  in  Port  Klang, 

Malaysia, which is 60 kilometers away from Kuala Lumpur. 

This  200,000-ft2  facility  is  the  result  of  a  successful 

Wireline  pilot  program  in  2013  and  employs  100  highly 

skilled engineers and technicians. Presently, the Asia CRE 

distributes Wireline tools to 65 locations in 54 countries. 

In addition, the Asia CRE has expanded to include Testing 

Services and Completions tools and equipment.

During  the  pilot  program,  the  Wireline  product  line 

sought  to  improve  asset  deployment.  They  began  by 

identifying assets that generated the highest revenue and 

were complex to maintain, but had few or no restrictions 

on their movement across borders. Settling on the MDT* 

modular  formation  dynamics  tester  family  of  tools,  they 

used the i-District* district resource and business process 

management  application  to  identify  ﬁeld  asset  demand 

and plan the most cost-effective and timely logistics for 

asset distribution across Asia GeoMarket regions. 

As a result, tools and people from six locations in two 

GeoMarket regions were centralized in Port Klang. With the 

Area product lines at the Asia CRE now responsible for tool 

ownership, this centralization has improved asset utilization. 

Wireline  discovered  that  it  could  provide  the  same  level  

of  service  with  70%  of  its  asset  ﬂeet,  which  freed  up  

the remaining 30% for deployment outside of the locations 

in  which  they  originated.  Our  customers  beneﬁt  from  cost 

savings  resulting  from  increased  tool  reliability  and  better 

service delivery. 

19

Doing It Right 

In 2014, Schlumberger launched the enterprise-wide Do It 

Right initiative to improve the consistency of our process 

reliability  performance  by  stressing  the  importance  of 

following  standard  procedures.  The  initiative  instills  a  

do-it-right mindset in conjunction with the use of Standard 

Work Instructions (SWI) and checklists to improve process 

reliability in different operating environments. 

A prime example of the initiative’s success comes from 

Mexico  Marine,  where  Testing  Services  operates  in  a 

deepwater environment at very high activity levels. From 

2011  to  2013,  a  steady  increase  in  nonproductive  time 

(NPT) and incidents affected operational performance.

Testing  Services  addressed  operational  reliability  by 

ﬁrst  establishing  service  delivery  procedures  to  support 

on-the-job  design  and  execution  of  every  service.  These 

are  now  accessible  via  a  web  interface  that  can  also 

measure  procedural  adherence  and  includes  drillstem 

testing and tubing-conveyed perforating procedures.

Next,  Testing  Services  developed  SWI  for  speciﬁc 

tasks  or  workﬂows  related  to  maintenance  and  wellsite 

operations. In addition, new checklists guide staff through 

critical  points  before,  during,  and  after  operations.  For 

example, one checklist prevents a mechanical packer from 

being  run  in  hole  with  the  incorrect  conﬁguration,  which 

can lead to catastrophic incidents. 

The focus on procedural adherence starts at the prejob 

brieﬁng with review of the relevant SWI and checklists by the 

ﬁeld  services  manager.  With  an  eye  toward  continuous 

improvement, the manager also gathers crew feedback about 

the SWI and checklists during the postjob debrief.

In  2014,  Testing  Services  in  Mexico  Marine  had  the 

second  highest  operating  time  of  all  the  deepwater 

GeoMarket regions. The result of their Do It Right mindset 

saw  a  93%  decrease  in  NPT  from  170  hours  in  2013  to  

11 hours in 2014 due to the use of SWI and checklists. 

20

Field Specialists Cesar Valencia Salinas and Carlos Alvarez Uribe, Field 
Engineer Liza Grande Vega, and Testing Operations Engineer Natividad 
Galvan Ortegon use a Do It Right checklist to verify the conﬁguration of 
a downhole testing system offshore Mexico.

standardize work for maintenance and operations and break 
up lengthy manuals into logical groups of tasks (e.g.,  assembly,  
maintenance). 

Every  SWI  provides  clear  and  concise  step-by-step 
instructions to complete a distinct task, and it also includes 
pertinent  reference  information,  warnings,  and  cautions 
for safer, more reliable execution. For example, there are 
now 1,500 Do It Right Standard Work Instructions across all 
product lines.

Increasing Workforce Productivity
There is no process reliability without the people who per-
form  those  processes.  As  we  seek  to  improve  the  way  in 
which we do things, tasks and responsibilities are reassigned 
and  new  ones  are  created.  Upholding  the  Schlumberger 
value that our people thrive on the challenge to excel in any 
environment, equipping them to maintain a work-life bal-
ance is vital to their development and the company’s overall 
success. Thus, we’ve used multiskilling and the creation of 
facility support teams to increase workforce productivity. 
The support teams manage common tasks so ﬁeld personnel 
can focus on their core activities at the wellsite. 

Multiskilling is not merely retraining one person to do 
another  person’s  job,  but  rather  ensuring  that  the  most 
appropriate individual to take on new tasks has the skills to 
do so. The individuals undergo rigorous training and their 
competency is accredited by trained assessors. Multiskilling 
also involves streamlining consecutive workﬂows and opti-
mizing human resources at the wellsite in order to achieve 
a number of beneﬁts. These beneﬁts include increased oper-
ational capacity, decreased personnel exposure to health 
and safety risks, and more ﬂexibility to improve work-life 

balance. Furthermore, it creates a workforce that is more 
ﬂexible and efﬁcient in responding to customer needs and 
changes in market demands. 

For example, offshore the Philippines, advanced Drilling 
& Measurements technologies optimized the drilling of a 
challenging deepwater well. To increase people productiv-
ity on the operation, an engineer was trained in both mud 
logging  and  measurement-while-drilling  services  to  pro-
vide  workforce  ﬂexibility.  This  combination  of  Drilling  & 
Measurements technologies and multiskilling saved three 
days of rig time, or approximately $1.8 million, while also 
reducing the exposure to health and safety risks.

Upgrading Operational Planning
As the leading oilﬁeld services provider with a broad tech-
nology portfolio, we realize that it is vital to map activity 
with  resource  requirements,  and  to  adopt  systems  to 
track the visibility of goods to further optimize processes.  
Schlumberger is one of the ﬁrst companies in the E&P ser-
vices industry to adopt operational planning capabilities. 
While some companies have worked on pieces of it (supply 
chain and distribution), none has gone to the lengths that 
Schlumberger intends to by incorporating people, assets, 
and products across the end-to-end value chain.

Operational Planning optimizes the supply and demand 
of resources. This requires accurate tracking of where those 
resources are at any given moment in time, with solutions 
such as global traceability using barcodes, RFID tags, GPS, 
and geofencing. Beginning with Drilling & Measurements, 
we have increased the visibility of resources and used an 
activity-based  approach  to  forecast  their  demand.  This 
ensures that we are driving our activity and resource needs 
based on a single plan that is agreed upon between the sup-
ply functions (considering lead time and cost) in order to 
meet the opportunities from each business unit. 

Leveraging Information Technology
When  we  talk  about  changing  how  we  do  something,  the 
way to execute the change involves information technology. 
Our  transformation  is  founded  on  establishing  processes 
that are more efﬁcient and have better visibility so that we 
are equipped to continually improve how we do our work. 
As such, IT is the engine that will make it possible for us 
to achieve process visibility and implement an integrated 
solution called Enterprise Resource Planning. Enterprise 
Resource Planning refers to the collection of software that 

we use to collect, manage, store, and interpret data from a 
variety of business activities. 

The business world began to centralize IT systems approx-
imately 25 years ago, and many companies approached this 
by  ﬁrst  updating  discrete  functions,  such  as  ﬁnance  and 
supply chain, and then integrating them into a renewed IT 
landscape. Schlumberger is taking a different approach by 
creating a more integrated solution in line with our business 
requirements. In addition, we are building a system that is 
ﬂexible as IT evolves, and currently includes the use of cloud 
computing, analytics, and mobile technology.

As  Schlumberger  takes  its  ﬁrst  steps  along  a  similar 
path, the new IT systems that support the company will be 
deployed by 2020 and handle 95% of the expected transac-
tion volume. In the shorter term, North America’s IT trans-
formation is expected to be fully operational by 2017. We 
are taking a multistage approach because we do not want to 
create any disruptions in the business. 

Aside from aligning our processes with the transforma-
tion,  user  experience  is  also  an  important  consideration. 
Capturing accurate information not only gives us visibility 
but enables us to conduct the analytics we need to make 
informed decisions. Information technology captures this 
information, but also grants us the mobility and automation 
our  transformation  requires  to  achieve  a  level  of  success 
that spans the enterprise. 

Consortium Shushuﬁndi team members Maria Belen Guzman  
and Fernando Estevez monitor real-time measurement-while- 
drilling operations in the Shushuﬁndi-Aguarico ﬁeld at the  
Asset Integrated Management Center in Quito, Ecuador.

21

Caption to come

22

Drilling & Measurements’ Nelson Armijos and 
Alba Meneses and Wellsite Supervisors Franklin 
Robles and Guido Boscan inspect a PowerDrive* 
rotary steerable system to be deployed with 
Stinger* conical diamond element technology on 
a Smith customized drill bit on a drilling rig in the 
Shushuﬁndi-Aguarico ﬁeld.

Our Transformation 
Advantage

The Schlumberger transformation program has four main themes—technology,  

reliability, efﬁciency, and integration—and the examples presented thus far have  

touched on each one. Further developing these themes enterprise-wide is inherently  

complex due to our large footprint: more than 95,000 people, approximately 85 countries,  

150,000 mobile assets, and 2,250 facilities. However, leveraging the transformation  

across the enterprise will enable us to fully capitalize on our size so that we will  

continue to outperform the market in the long term.

O ur  transformation  advantage  stems  from  our  mature 

matrix organization structure, which was established in 
1998 with the creation of GeoMarket geographical regions 
with comparable geological markets. This is enhanced by 
our identity as a technology company with a common cul-
ture for excellence that is aligned with our customers. As 
engineers, we speak our customers’ language and are able 
to develop the technology and business models they need to 
improve their performance.  

Engineering Outperformance
The transformation program would not have been possible 
without executive management’s commitment to new tech-
nology and a long-term perspective of the business that does 
not waver in response to market ﬂuctuations. Executive man-
agement and the heads of every department are members of 
the transformation board and report directly to the Chairman 
and CEO. This means that executive management is account-
able for the transformation program’s development, enable-
ment, and deployment. In turn, they lead a cohesive team of 
line and functional managers who use a top-down approach 

to implement a step change in performance by focusing on 
technology, reliability, efﬁciency, and integration. 

The depth and breadth of the Schlumberger transforma-
tion is unparalleled by any other company in the oil and gas 
services industry. The ﬁrst eight years of our transforma-
tion journey have established a new product development 
method as well as a new process for Technology Lifecycle 

“

By focusing on resource management 
and exceeding our own  
standards for service quality,  
we are addressing the things  
under our own control.
”

Management. In addition, our Shared Services Organization 
combined seven functions to leverage our size in order to 
facilitate  proﬁtable  growth  and  manage  business  cycles 
more efﬁciently.

23

Integration in Action

Discovered in 2008 by Det norske, the Ivar Aasen ﬁeld 
offshore  Norway  sits  below  112  meters  of  water  in 
the North Sea and contains approximately 210 million 
barrels of oil equivalent.

In 2014, Schlumberger signed a ﬁve-year integrated 
services contract with Det norske, making Schlumberger 
an  integral  part  of  the  well  construction  process  
with  incentives  to  deliver  the  maximum  gain  through 
reliability,  efﬁciency,  and 
technology 
integration.

innovation, 

A combination of detailed project management and 
resource  planning  as  well  as  experienced  personnel 
ensured  the  optimization  of  resources  between  the 
offshore rig, the shore base in Trondheim, and the remote 
operations center in Stavanger. We created a dedicated 
project  organization  that  assigned  human  resources 
with the skills to deploy the best available technology 
through established workﬂows and processes.

For example, StingBlade* conical diamond element 
bit  technology  contributed  to  an  improved  rate  of 
penetration  due  to  its  reliability  and  wear  resistance 
under  severe  shock  and  vibration. 
In  addition, 
GeoSphere*  reservoir  mapping-while-drilling  service 
geologically steered four horizontal well sections more 
than 2,000 meters in length and helped delineate layers 
in the reservoir at distances in excess of 30 meters. 

This  integrated  services  project  resulted  in  the 
drilling  and  completion  of  ﬁve  wells  among  the  top 
10  best  performers  in  the  last  eight  years  on  the 
Norwegian  Continental  Shelf.  On  one  of  the  wells 
the  total  operational  savings  due  to  the  integrated 
approach,  which  was  backed  by  our  transformation, 
halved the time needed to drill and complete the well 
compared with the planned budget.

24

The transformation program focuses on the delivery of 
new technologies and business models that involve greater 
integration. As our customers’ resources become stretched 
and they seek new ways of working, the adoption rate for 
integrated services is increasing. Involving customers early 
in the integration process is a key consideration. We must 
now use integrated workﬂows to meet challenges, such as 
subsurface risk during exploration and increasing ultimate 
recovery at the end of a reservoir’s productive life. Increased 
levels of integration will enable us to optimize production 
while reducing cost per barrel.

One  example  that  illustrates  how  integration  brings 
value to our customers is the Det norske Ivar Aasen project 
in the North Sea. Working far ahead of the project start date, 
we adopted a unique collaboration model where Det norske 
and Schlumberger project teams are collocated. This makes 
it easier to integrate services and optimize the resources 
required between the rig, the shore base, and a remote oper-
ations center. The highly efﬁcient approach to stafﬁng levels 
includes remote operations, multiskilling, and new ﬁt-for-
purpose technologies. 

Project Manager Gudmund Aaker, Drilling Analyst Ove P. Johnsen, 
Wireline Project Engineer Olav Opoien, and Project Engineer  
Erik G. Bjonstad review a geologically steered horizontal section 
that used GeoSphere technology. Using deep, directional, 
electromagnetic measurements, the GeoSphere service reveals 
subsurface bedding and ﬂuid contact details more than 30 meters 
from the wellbore.

Improving Field Performance 

The  Shushufindi-Aguarico  field  in  Ecuador’s  Oriente  basin  

is the country’s largest oil field and produces approximately 

16%  of  its  oil.  It  is  also  an  excellent  example  of  the 

integrated oilfield services Schlumberger can provide. The 

Oriente basin is part of a Mesozoic-Cenozoic back-arc basin 

that  formed  in  conjunction  with  the  tectonic  activity  that 

created  the  Andes  Mountains  during  the  Cretaceous  to 

Tertiary Periods.

 Discovered in January 1969 with an estimated 3.7 billion 

bbl of original oil in place, the field produced its first oil in 

1972.  In  1986,  field  production  peaked  at  116,000  bbl/d. 

However,  by  2010  it  had  decreased  to  approximately  

43,000 bbl/d. Initially working with PetroEcuador and today 

with PetroAmazonas, Schlumberger and Tecpetrol formed 

the Consortium Shushufindi in 2012.

 Early on, the consortium focused on reservoir studies 

to  understand  the  field’s  potential,  conducted  well 

interventions  to  increase  production,  and  developed  pilot 

programs to test production through water flood secondary 

recovery.  An  emphasis  on  integration  and  teamwork 

contributed  to  early  success  a  year  after  the  consortium 

formed,  with  four  drilling  rigs  and  seven  workover  rigs 

already in operation. 

The commitment to integration has created operational 

efficiencies and the deployment of more than 50 specialized 

technologies.  The  Shushufindi-Aguarico  field  is  currently 

producing  88,000  bbl/d,  a  rate  not  seen  since  1995,  and 

is  becoming  Ecuador’s  highest  producing  asset.  A  strong 

emphasis  on  teamwork  and  integration  contributed  to 

today’s success.

 Building upon the success in Shushufindi, Schlumberger 

went  on  to  collaborate  with  PetroAmazonas  through  a  

long-term  contract  to  increase  production  in  Block  61. 

Discovered in 1970, the field has more than 360 wells that 

provide  approximately  64,000  bbl/d  or  12%  of  Ecuador’s 

total oil production.

25

At the Asset Integrated Management Center in Quito, Ecuador,  
multidisciplinary teams of petrotechnical experts collaborate  
with field personnel and production operations staff at the 
Shushufindi-Aguarico field. 

Managing Scale and Complexity
Our management system defines the corporate boundaries 
within which the company operates. We control corporate 
risks by leveraging our global experience to define the con-
trols used to manage risks and enhance decision making. 
This is manifested by our business governance structure. 

The management system is a fundamental pillar for the 
new ways of working we are implementing. Our corporate 
identity is underpinned by The Blue Print, the highest level 
of our governance structure, which establishes our purpose, 
ambitions, values, and mindset. This mindset is exemplified 
by  four  behaviors:  commitment,  integrity,  teamwork,  and 
drive. Everything we do within the company is instilled with 
these behaviors. 

Structured around a continuous improvement process, 
our management system allows us to continually improve on 
a systematic basis to ensure we deliver safe, efficient, and 
reliable products and services. Managers in our Continuous 
Performance Improvement organization facilitate deploy-
ment  on  both  a  geographic  and  product  line  level,  and  
determine  the  best  methods  to  lead  people  through  the 
change process. 

The pending Cameron acquisition is another aspect of 
the transformation’s focus on integration. In this case, inte-
grating our reservoir and well technology with an industry 

Senior Reservoir Engineer Isabel Garcia Pietri and Petroleum Economist Quinn Larwood plan multiple horizontal wells in the Digital 
Technology Theatre in Houston, Texas. The integration of petrophysical measurements and three-dimensional seismic data in Petrel helps 
engineers develop predictive maps of sweet spots while ant tracking helps them to better understand complex fault networks.

leader  in  surface  process  and  ﬂow  control  will  mark  the 
start of a new epoch in drilling and production system per-
formance. Customers will beneﬁt from expanded technical 
capabilities, improved efﬁciency, and a closer commercial 
alignment to lower the cost per barrel and increase hydro-
carbon recovery.

The transformation initially focused on improving perfor-
mance in a market where rising E&P investment could not 
be met by range-bound commodity prices. The current low 
oil price market environment therefore makes our transfor-
mation goals even more compelling.

The  Schlumberger  transformation  has  contributed  to 
consecutive  years  of  ﬁnancial  outperformance  that  were 
undeterred  when  market  conditions  began  to  deterio-
rate  in  the  second  half  of  2014.  By  focusing  on  resource  
management and exceeding our own standards for service 

quality, we are addressing the things under our own con-
trol. Transformation as a pathway to growth puts us in the 
ideal position when the market recovers and enables us to 
continue  to  manage  the  critical  balance  between  margin 
performance and market share.

Where does our transformation story ﬁnd us a few years 
down  the  road?  At  that  time,  the  entire  organization,  its 
processes and systems, will have uniﬁed people and tech-
nology at an unprecedented level via integrated workﬂows. 
The result will continue to improve  our customers’ business 
performance as well as our own. 

In  our  quest  to  be  one  of  the  best-run  companies  in 
the  world,  we  do  not  merely  want  to  position  ourselves 
ahead of the waves of change in the oil and gas industry. 
Schlumberger intends to be the oilﬁeld services technology 
company that helps set those waves in motion.

26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to
Commission File Number 1-4601

Schlumberger N.V.
(Schlumberger Limited)

(Exact name of registrant as specified in its charter)

Curaçao
(State or other jurisdiction of incorporation or organization)

42, rue Saint-Dominique
Paris, France

5599 San Felipe, 17th Floor
Houston, Texas, United States of America

62 Buckingham Gate,
London, United Kingdom

Parkstraat 83, The Hague,
The Netherlands
(Addresses of principal executive offices)

52-0684746
(IRS Employer Identification No.)

75007

77056

SW1E 6AJ

2514 JG
(Zip Codes)

Registrant’s telephone number in the United States, including area code, is: (713) 513-2000
Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, par value $0.01 per share

New York Stock Exchange
Euronext Paris
The London Stock Exchange
SIX Swiss Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES Í NO ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ‘ NO Í
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES Í NO ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files.) YES Í NO ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ‘ NO Í
As of June 30, 2015, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $109.0 billion.
As of December 31, 2015, the number of shares of common stock outstanding was 1,256,367,980.

Smaller reporting company

Non-accelerated filer

Accelerated filer

‘

‘

Í

‘

DOCUMENTS INCORPORATED BY REFERENCE
Certain information required to be furnished pursuant to Part III of this Form 10-K is set forth in, and is hereby incorporated by reference herein from,
Schlumberger’s definitive proxy statement for its 2016 Annual General Meeting of Stockholders, to be filed by Schlumberger with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after December 31, 2015 (the “2016 Proxy Statement”).

SCHLUMBERGER LIMITED
Table of Contents
Form 10-K

PART I

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A.

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

3

9

Item 1B.

Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 2.

Item 3.

Item 4.

PART II

Item 5.

Item 6.

Item 7.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Market for Schlumberger’s Common Stock, Related Stockholder Matters and Issuer Purchases
of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . 19

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Item 8.

Item 9.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . 78

Item 9A.

Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Item 9B.

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

PART III

Item 10.

Directors, Executive Officers and Corporate Governance of Schlumberger

. . . . . . . . . . . . . . . . . 80

Item 11.

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Item 13.

Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . 80

Item 14.

Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

PART IV

Item 15.

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

PART I

Item 1. Business.

All references in this report to “Registrant,” “Company,” “Schlumberger,” “we” or “our” are to Schlumberger
Limited (Schlumberger N.V., incorporated in Curaçao) and its consolidated subsidiaries.

Founded in 1926, Schlumberger is the world’s leading supplier of technology, integrated project management
and information solutions to the international oil and gas exploration and production industry. Having invented
wireline logging as a technique for obtaining downhole data in oil and gas wells, Schlumberger today provides
the industry’s widest range of products and services from exploration through production. As of December 31,
2015, the Company employed approximately 95,000 people of over 140 nationalities operating in approximately
85 countries. Schlumberger has principal executive offices in Paris, Houston, London and The Hague.

On August 26, 2015, Schlumberger and Cameron International Corporations (Cameron) jointly announced that
they had entered into a definitive merger agreement in which Cameron will merge with an indirect wholly-owned
subsidiary of Schlumberger in a stock and cash transaction. Under the terms of the agreement, Cameron
shareholders will receive 0.716 shares of Schlumberger common stock and a cash payment of $14.44 in
exchange for each Cameron share of common stock outstanding. Schlumberger estimates that it will issue
approximately 137 million shares of its common stock and pay cash of approximately $2.8 billion in connection
with this transaction. In November 2015, the US Department of Justice cleared the proposed merger without any
conditions. On December 17, 2015, Cameron stockholders voted to adopt the proposed merger. However, the
transaction remains subject
is
anticipated that the closing of the transaction will occur in the first quarter of 2016.

to certain regulatory approvals and other customary closing conditions. It

Cameron designs, manufactures, markets and services equipment used by the oil and gas industry and industrial
manufacturing companies. Cameron is a leading international manufacturer of oil and gas pressure control and
separation equipment, including valves, wellheads, controls, chokes, blowout preventers and assembled systems
for oil and gas drilling, production and transmission used in onshore, offshore and subsea applications and
provides oil and gas separation, metering and flow measurement equipment. Cameron reported revenue of $10.4
billion for the year ended December 31, 2014.

Schlumberger operates in each of the major oilfield service markets, managing its business through three Groups:
Reservoir Characterization, Drilling and Production. Each Group consists of a number of technology-based
service and product lines, or Technologies. These Technologies cover the entire life cycle of the reservoir and
correspond to a number of markets in which Schlumberger holds leading positions. The business is also reported
through four geographic Areas: North America, Latin America, Europe/CIS/Africa and Middle East & Asia.
Within these Areas, a network of GeoMarket* regions provides logistical,
technical and commercial
coordination.

The role of the Groups and Technologies is to support Schlumberger in providing the best possible service to
customers and that it remains at the forefront of technology development. The Groups and Technologies are
collectively responsible for driving excellence in execution throughout their businesses, overseeing operational
processes, resource allocation, personnel and delivering superior financial results. The GeoMarket structure
offers customers a single point of contact at the local level for field operations and brings together geographically
focused teams to meet local needs and deliver customized solutions. The Areas and GeoMarkets are responsible
for providing the most efficient and cost effective support possible to the operations.

3

The Groups are as follows:

Reservoir Characterization Group – Consists of the principal Technologies involved in finding and defining
hydrocarbon resources. These include WesternGeco, Wireline, Testing Services, Software Integrated Solutions
(SIS) and Integrated Services Management (ISM).

(cid:129) WesternGeco is a leading geophysical services supplier, providing comprehensive worldwide reservoir
imaging, monitoring and development services. It provides increasingly accurate measurements and
images of subsurface geology and rock properties for both customer proprietary and multiclient surveys.
WesternGeco offers the industry’s most extensive multiclient library.

(cid:129) Wireline provides the information necessary to evaluate subsurface formation rocks and fluids to plan
and monitor well construction, and to monitor and evaluate well production. Wireline offers both
openhole and cased-hole services including wireline perforating.

(cid:129)

(cid:129)

(cid:129)

Testing Services provides exploration and production pressure and flow-rate measurement services both
at the surface and downhole. The Technology also provides tubing-conveyed perforating services.

information
Software Integrated Solutions sells proprietary software and provides consulting,
management and IT infrastructure services to customers in the oil and gas industry. SIS also offers
expert consulting services for reservoir characterization, field development planning and production
enhancement, as well as industry leading petrotechnical data services and training solutions.

Integrated Services Management provides coordination and management of Schlumberger services,
products, and third parties in projects around the world. ISM offers a certified Integrated Services
Project Manager as a focal point of contact between the project owner and the various Schlumberger
services, ensuring alignment of project objectives.

Drilling Group – Consists of the principal Technologies involved in the drilling and positioning of oil and gas
wells and comprises Bits & Drilling Tools, M-I SWACO, Drilling & Measurements, Land Rigs and Integrated
Drilling Services.

(cid:129)

Bits & Drilling Tools designs, manufactures and markets roller cone and fixed cutter drill bits for all
environments. The drill bits include designs for premium market segments where faster penetration rates
and increased footage provide significant economic benefits in lowering overall well costs. Drilling
tools includes a wide variety of bottom-hole-assembly, borehole-enlargement technologies and impact
tools, as well as a comprehensive collection of tubulars and tubular services for oil and gas drilling
operations.

(cid:129) M-I SWACO is the leading supplier of drilling fluid systems engineered to improve drilling performance
by anticipating fluids-related problems, fluid systems and specialty equipment designed to optimize
wellbore productivity and production technology solutions formulated to maximize production rates.
M-I SWACO also provides engineered managed pressure drilling and underbalanced drilling solutions,
as well as environmental services and products to safely manage waste volumes generated in both
drilling and production operations.

(cid:129)

(cid:129)

(cid:129)

Drilling & Measurements provides mud logging services for geological and drilling surveillance,
directional drilling, measurement-while-drilling and logging-while-drilling services for all well profiles
as well as engineering support.

Land Rigs provides land drilling rigs and related support services.

Integrated Drilling Services encompasses the services necessary to construct or change the architecture
(re-entry) of wells. This service covers all aspects of well planning, well drilling, engineering,
supervision, logistics, procurement and contracting of third parties, and drilling rig management.

4

Production Group – Consists of the principal Technologies involved in the lifetime production of oil and gas
reservoirs and includes Well Services, Completions, Artificial Lift, Well Intervention, Water Services, Integrated
Production Services and Schlumberger Production Management.

(cid:129) Well Services provides services used during oil and gas well drilling and completion as well as those
used to maintain optimal production throughout the life of a well. The services include pressure
pumping, well cementing and stimulation operations as well as intervention activities.

(cid:129)

(cid:129)

Completions supplies well completion services and equipment that include packers, safety valves, sand
control technology as well as a range of intelligent well completions technology and equipment.

Artificial Lift provides production equipment and optimization services using electrical submersible
pumps, gas lift equipment, rod lift systems, progressing cavity pumps and surface horizontal pumping
systems.

(cid:129) Well Intervention develops coiled tubing equipment and services and provides slickline services for

downhole mechanical well intervention, reservoir monitoring and downhole data acquisition.

(cid:129) Water Services specializes in the development, management and environmental protection of water

resources.

(cid:129)

(cid:129)

Integrated Production Services encompasses the project scope necessary to abandon, maintain, or
increase the production of single or multiple wells. All aspects of project planning addressed include
well engineering, wellsite supervision, civil engineering, logistics, procurement, contracting of third
parties, and workovers.

Schlumberger Production Management (SPM) is a business model for field production projects. This
model combines the required services and products of the Technologies with drilling rig management,
specialized engineering and project management expertise to provide a complete solution to well
construction and production improvement.

SPM commercial arrangements create alignment between Schlumberger and the asset holder and/or the
operator whereby Schlumberger receives remuneration in line with its value creation. These projects are
generally focused on developing and co-managing production of Schlumberger’s customers’ assets under
long-term agreements. Schlumberger will invest its own services and products, and in some cases cash,
into the field development activities and operations. Although in certain arrangements Schlumberger is
paid for a portion of the services or products it provides, generally Schlumberger will not be paid at the
time of providing its services or upon delivery of its products. Instead, Schlumberger is generally
compensated based upon cash flow generated or on a fee-per-barrel basis. This may include certain
arrangements whereby Schlumberger is only compensated based upon incremental production that it
helps deliver above a mutually agreed baseline.

Schlumberger also has a 40% equity ownership interest in OneSubseaTM, a joint venture with Cameron. The joint
venture manufactures and develops products, systems and services for
the subsea oil and gas market.
Schlumberger’s 40% share of the net income of the joint venture is reflected in the results of the Production Group.

Supporting the Technologies is a global network of research and engineering centers. Through this organization,
Schlumberger is committed to advanced technology programs that enhance oilfield efficiency, lower finding and
producing costs, improve productivity, maximize reserve recovery and increase asset value while accomplishing
these goals in a safe and environmentally sound manner.

Schlumberger primarily uses its own personnel to market its offerings. The customer base, business risks and
opportunities for growth are essentially uniform across all services. There is a sharing of manufacturing and
engineering facilities as well as research centers, and the labor force is interchangeable. Technological innovation,
quality of service and price differentiation are the principal methods of competition, which vary geographically
with respect to the different services offered. While there are numerous competitors, both large and small,
is an industry leader in providing geophysical services, wireline logging,
Schlumberger believes that

it

5

well testing, exploration and production software, drilling and completion fluids, solids and waste management,
coiled-tubing, drill bits, measurement-while-drilling, logging-while-drilling, directional drilling services and mud
logging. A large proportion of Schlumberger offerings is non-rig related; consequently, revenue does not
necessarily correlate to the rig count.

GENERAL

Intellectual Property

limited to patents,
Schlumberger owns and controls a variety of intellectual property,
proprietary information and software tools and applications that, in the aggregate, are material to Schlumberger’s
business. While Schlumberger seeks and holds numerous patents covering various products and processes, no
particular patent or group of patents is considered material to Schlumberger’s business.

including but not

Seasonality

Seasonal changes in weather and significant weather events can temporarily affect the delivery of oilfield
services. For example, the spring thaw in Canada and consequent road restrictions can affect activity levels,
while the winter months in the North Sea, Russia and China can produce severe weather conditions that typically
result in temporarily reduced levels of activity. In addition, hurricanes and typhoons can disrupt coastal and
offshore operations. Furthermore, customer spending patterns for multiclient data, software and other oilfield
services and products generally result in higher activity in the fourth quarter of each year as clients seek to utilize
their annual budgets.

Customers and Backlog of Orders

For the year ended December 31, 2015, no single customer exceeded 10% of consolidated revenue. Other than
WesternGeco, Schlumberger has no significant backlog due to the nature of its businesses. The WesternGeco
backlog, which is based on signed contracts with customers, was $1.1 billion at December 31, 2015 ($0.7 billion
at December 31, 2014).

Financial Information

Financial information by business segment and geographic area for the years ended December 31, 2015, 2014
and 2013 is provided in Note 17 of the Consolidated Financial Statements.

6

Executive Officers of Schlumberger

The following table sets forth, as of January 27, 2016, the names and ages of the executive officers of
Schlumberger, including all offices and positions held by each for at least the past five years.

Name

Age Current Position and Five-Year Business Experience

Paal Kibsgaard

Simon Ayat

Alexander Juden

Ashok Belani

48

61

55

57

Chairman of the Board of Directors, since April 2015; Chief Executive Officer,
since August 2011; Director since April 2011; Chief Operating Officer, February
2010 to July 2011.

Executive Vice President and Chief Financial Officer, since March 2007.

Secretary and General Counsel, since April 2009.

Executive Vice President, Technology, since January 2011; President, Reservoir
Characterization Group, February 2010 to August 2011.

Jean-Francois Poupeau

54

Executive Vice President Corporate Development and Communications, since
June 2012; President, Drilling Group, May 2010 to June 2012.

Khaled Al Mogharbel

45

President, Drilling Group, since July 2013; President, Middle East, August 2011
to June 2013; Project – Gulfsands Petroleum – Syria, July 2009 to July 2011.

Stephane Biguet

47 Vice President Controller, Operations, since August 2015; Vice President
Controller, Operations & Integration, from November 2013 to August 2015; Vice
President, Global Shared Services Organization, August 2011 to October 2013;
Mergers and Acquisitions Director, February 2011 to July 2011; Controller,
Reservoir Characterization Group, October 2008 to July 2011.

Mark Danton

59 Vice President – Director of Taxes, since January 1999.

Simon Farrant

51 Vice President,

Investor Relations, since February 2014; Special Projects
Manager, December 2013 to January 2014; GeoMarket Manager, North Sea,
April 2012 to November 2013; Integration Manager, Smith Merger, April 2010
to April 2012.

Sherif Foda

46

President, Production Group, since July 2013; President, Europe and Africa, June
2011 to June 2013; Saudi Arabia and Bahrain GeoMarket Manager, June 2009 to
June 2011.

Aaron Gatt Floridia

47

President, Reservoir Characterization Group, since August 2011; President
Middle East, May 2009 to July 2011.

Howard Guild

44

Chief Accounting Officer, since July 2005.

Imran Kizilbash

Gerard Martellozo

49 Vice President and Treasurer, since November 2013; Controller, Operations &
Integration, July 2013 to October 2013; Controller, Operations, January 2011 to
June 2013; Controller, Schlumberger Limited, May 2009 to January 2011.

60 Vice President Human Resources, since June 2014; Senior Advisor to the CEO,
August 2012 to May 2014; Human Resources Manager, Drilling Group, May
2010 to July 2012.

Patrick Schorn

47

President, Operations, since August 2015; President, Operations & Integration,
July 2013 to August 2015; President, Production Group, January 2011 to June
2013; President Well Services, May 2008 to January 2011.

7

Available Information

The Schlumberger Internet website is www.slb.com. Schlumberger uses its Investor Relations website,
www.slb.com/ir, as a routine channel for distribution of important information, including news releases, analyst
presentations, and financial information. Schlumberger makes available free of charge on or through its Investor
Relations website at www.slb.com/ir access to its Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K, its Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors
and executive officers, and amendments to each of those reports, as soon as reasonably practicable after such
material is filed with or furnished to the Securities and Exchange Commission (“SEC”). Alternatively, you may
access these reports at the SEC’s Internet website at www.sec.gov. Copies are also available, without charge,
from Schlumberger Investor Relations, 5599 San Felipe, 17th Floor, Houston, Texas 77056. Unless expressly
noted, the information on our website or any other website is not incorporated by reference in this Form 10-K
and should not be considered part of this Form 10-K or any other filing Schlumberger makes with the SEC.

8

Item 1A. Risk Factors.

The following discussion of risk factors known to us contains important information for the understanding of our
“forward-looking statements,” which are discussed immediately following Item 7A. of this Form 10-K and
elsewhere. These risk factors should also be read in conjunction with Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and
related notes included in this Form 10-K.

We urge you to consider carefully the risks described below, as well as in other reports and materials that we file
with the SEC and the other information included or incorporated by reference in this Form 10-K. If any of the
risks described below or elsewhere in this Form 10-K were to materialize, our business, financial condition,
results of operations, cash flows or prospects could be materially adversely affected. In such case, the trading
price of our common stock could decline and you could lose part or all of your investment. Additional risks and
uncertainties not currently known to us or that we currently deem immaterial may also materially adversely
affect our financial condition, results of operations and cash flows.

Demand for the majority of our services is substantially dependent on the levels of expenditures by the oil
and gas industry. The current significant oil and gas industry downturn has resulted in reduced demand
for oilfield services, which has had, and may continue to have, a significant adverse impact on our
financial condition, results of operations and cash flows. If these conditions worsen or oil and gas prices do
not improve, further reductions in spending by the oil and gas industry could have a material adverse
effect on our financial condition, results of operations and cash flows.

Demand for the majority of our services depends substantially on the level of expenditures by the oil and gas
industry for the exploration, development and production of oil and natural gas reserves. These expenditures are
generally dependent on the industry’s view of future oil and natural gas prices and are sensitive to the industry’s
view of future economic growth and the resulting impact on demand for oil and natural gas. Since 2014, oil and
gas prices have declined significantly, resulting in lower expenditures by the oil and gas industry. As a result,
many of our customers have reduced or delayed their oil and gas exploration and production spending, reducing
the demand for our services and exerting downward pressure on the prices that we charge. These conditions have
had, and may continue to have, an adverse impact on our financial condition.

Continued low oil and gas prices or a further decline in oil and gas prices could cause a reduction in cash flows
for our customers, which could have significant adverse effects on the financial condition of some of our
customers. This could result in project modifications, delays or cancellations, general business disruptions, and
delays in payment of, or nonpayment of, amounts that are owed to us. These effects could have a material
adverse effect on our financial condition, results of operations and cash flows.

The prices for oil and natural gas have historically been volatile and can be affected by a variety of factors,
including:

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

demand for hydrocarbons, which is affected by general economic and business conditions;

the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) to set and
maintain production levels for oil;

oil and gas production levels by non-OPEC countries;

the level of excess production capacity;

political and economic uncertainty and geopolitical unrest;

the level of worldwide oil and gas exploration and production activity;

access to potential resources;

9

(cid:129)

(cid:129)

(cid:129)

(cid:129)

governmental policies and subsidies;

the costs of exploring for, producing and delivering oil and gas;

technological advances affecting energy consumption; and

weather conditions.

There can be no assurance that the demand or pricing for oil and natural gas will follow historic patterns or
recover in the near term. Continued or worsening conditions in the oil and gas industry could further adversely
affect our financial condition, results of operations and cash flows.

A significant portion of our revenue is derived from our non-United States operations, which exposes us to
risks inherent in doing business in each of the approximately 85 countries in which we operate.

Our non-United States operations accounted for approximately 76% of our consolidated revenue in 2015, 71% in
2014 and 73% in 2013. Operations in countries other than the United States are subject to various risks,
including:

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

volatility in political, social and economic conditions in certain areas;

exposure to possible expropriation of our assets or other governmental actions;

social unrest, acts of terrorism, war or other armed conflict;

confiscatory taxation or other adverse tax policies;

deprivation of contract rights;

trade and economic sanctions or other restrictions imposed by the European Union, the United States or
other countries;

restrictions under the United States Foreign Corrupt Practices Act or similar legislation in other
countries;

restrictions on the repatriation of income or capital;

currency exchange controls;

inflation; and

currency exchange rate fluctuations and devaluations.

We completed the wind down of our service operations in Iran during the second quarter of 2013. Prior to this,
certain of our non-US subsidiaries provided oilfield services to the National Iranian Oil Company and certain of
its affiliates (“NIOC”). We have reclassified the results of this business as a discontinued operation. All prior
periods have been restated accordingly.

Our residual transactions or dealings with the government of Iran during 2015 consisted of payments of taxes and
other typical governmental charges. Certain of our non-US subsidiaries maintained depository accounts at the
Dubai branch of Bank Saderat Iran (“Saderat”), and at Bank Tejarat (“Tejarat”) in Tehran and in Kish for the
deposit by NIOC of amounts owed to non-US subsidiaries of Schlumberger for prior services rendered in Iran
and for the maintenance of such amounts previously received. One non-US subsidiary also maintains an account
at Tejarat for payment of local expenses such as taxes and utilities. We anticipate that we will discontinue our
dealings with Saderat and Tejarat following the receipt of all amounts owed to us for prior services rendered in
Iran.

10

Our failure to comply with Foreign Corrupt Practices Act (“FCPA”) and other laws could have a negative
impact on our ongoing operations.

We are subject to complex US and foreign laws and regulations, such as the FCPA, the U.K. Bribery Act and
various other anti-bribery and anti-corruption laws. We are also subject to trade sanction laws that restrict certain
operations in various countries or with certain persons. The internal controls, policies and procedures, and
employee training and compliance programs we have implemented to deter prohibited practices may not be
effective in preventing employees, contractors or agents from violating or circumventing such internal policies
and violating applicable laws and regulations. Any determination that we have violated or are responsible for
violations of anti-bribery or anti-corruption laws could have a material adverse effect on our financial condition.
Violations of international and US laws and regulations may result in fines and penalties, criminal sanctions,
administrative remedies, restrictions on business conduct and could have a material adverse effect on our
reputation and our business, operating results and financial condition.

Environmental compliance costs and liabilities could reduce our earnings and cash available for
operations.

We are subject to increasingly stringent laws and regulations relating to importation and use of hazardous
materials, radioactive materials, chemicals and explosives and to environmental protection, including laws and
regulations governing air emissions, hydraulic fracturing, water discharges and waste management. We incur,
and expect to continue to incur, capital and operating costs to comply with environmental laws and regulations.
The technical requirements of these laws and regulations are becoming increasingly complex, stringent and
expensive to implement. These laws may provide for “strict liability” for remediation costs, damages to natural
resources or threats to public health and safety. Strict liability can render a party liable for damages without
regard to negligence or fault on the part of the party. Some environmental laws provide for joint and several strict
liability for remediation of spills and releases of hazardous substances.

We use and generate hazardous substances and wastes in our operations. In addition, many of our current and
former properties are, or have been, used for industrial purposes. Accordingly, we could become subject to
material liabilities relating to the investigation and cleanup of potentially contaminated properties, and to claims
alleging personal injury or property damage as the result of exposures to, or releases of, hazardous substances. In
addition, stricter enforcement of existing laws and regulations, new laws and regulations, the discovery of
previously unknown contamination or the imposition of new or increased requirements could require us to incur
costs or become the basis of new or increased liabilities that could reduce our earnings and our cash available for
operations.

We could be subject to substantial liability claims, which could adversely affect our financial condition,
results of operations and cash flows.

The technical complexities of our operations expose us to a wide range of significant health, safety and
environmental risks. Our offerings involve production-related activities, radioactive materials, chemicals,
explosives and other equipment and services that are deployed in challenging exploration, development and
production environments. An accident involving these services or equipment, or a failure of a product, could
cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or
suspension of operations. Our insurance may not protect us against liability for some kinds of events, including
events involving pollution, or against losses resulting from business interruption. Moreover, we may not be able
to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any damages caused by
our services or products that are not covered by insurance, or are in excess of policy limits or are subject to
substantial deductibles, could adversely affect our financial condition, results of operations and cash flows.

Demand for our products and services could be reduced by existing and future legislation or regulations.

Environmental advocacy groups and regulatory agencies in the United States and other countries have been
focusing considerable attention on the emissions of carbon dioxide, methane and other greenhouse gasses and
their potential role in climate change. Existing or future legislation and regulations related to greenhouse gas

11

emissions and climate change, as well as government initiatives to conserve energy or promote the use of
alternative energy sources, may significantly curtail demand for and production of fossil fuels such as oil and gas
in areas of the world where our customers operate and thus adversely affect future demand for our services. This
may, in turn, adversely affect our financial condition, results of operations and cash flows.

Some international, national, state and local governments and agencies have also adopted laws and regulations or
are evaluating proposed legislation and regulations that are focused on the extraction of shale gas or oil using
hydraulic fracturing. Hydraulic fracturing is a stimulation treatment routinely performed on oil and gas wells in
low-permeability reservoirs. Specially engineered fluids are pumped at high pressure and rate into the reservoir
interval to be treated, causing cracks in the target formation. Proppant, such as sand of a particular size, is mixed
with the treatment fluid to keep the cracks open when the treatment is complete. Future hydraulic fracturing-
related legislation or regulations could limit or ban hydraulic fracturing, or lead to operational delays and
increased costs, and therefore reduce demand for our pressure pumping services. If such additional international,
national, state or local legislation or regulations are enacted, it could adversely affect our financial condition,
results of operations and cash flows.

If we are unable to maintain technology leadership, this could adversely affect any competitive advantage
we hold.

The oilfield service industry is highly competitive. Our ability to continually provide competitive technology and
services can impact our ability to defend, maintain or increase prices for our services, maintain market share, and
negotiate acceptable contract terms with our customers. If we are unable to continue to develop and produce
competitive technology or deliver it to our clients in a timely and cost-competitive manner in the various markets
we serve, it could adversely affect our financial condition, results of operations and cash flows.

Limitations on our ability to protect our intellectual property rights, including our trade secrets, could
cause a loss in revenue and any competitive advantage we hold.

Some of our products or services, and the processes we use to produce or provide them, have been granted patent
protection, have patent applications pending or are trade secrets. Our business may be adversely affected if our
patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our
patent applications are denied, or our trade secrets are not adequately protected. Our competitors may be able to
develop technology independently that is similar to ours without infringing on our patents or gaining access to
our trade secrets, which could adversely affect our financial condition, results of operations and cash flows.

We may be subject to litigation if another party claims that we have infringed upon its intellectual
property rights.

The tools, techniques, methodologies, programs and components we use to provide our services may infringe
upon the intellectual property rights of others. Infringement claims generally result in significant legal and other
costs and may distract management from running our core business. Royalty payments under licenses from third
parties, if available, would increase our costs. Additionally, developing non-infringing technologies would
increase our costs. If a license were not available, we might not be able to continue providing a particular service
or product, which could adversely affect our financial condition, results of operations and cash flows.

Failure to obtain and retain skilled technical personnel could impede our operations.

We require highly skilled personnel to operate and provide technical services and support for our business.
Competition for the personnel required for our businesses intensifies as activity increases. In periods of high
utilization it may become more difficult to find and retain qualified individuals. This could increase our costs or
have other adverse effects on our operations.

12

Severe weather conditions may affect our operations.

Our business may be materially affected by severe weather conditions in areas where we operate. This may entail
the evacuation of personnel and stoppage of services. In addition, if particularly severe weather affects platforms
or structures, this may result in a suspension of activities. Any of these events could adversely affect our financial
condition, results of operations and cash flows.

Cybersecurity risks and threats could affect our business.

We rely heavily on information systems to conduct our business. There can be no assurance that the systems we
have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect
such incidents or attacks, or to avoid a material impact on our systems when such incidents or attacks do occur. If
our systems for protecting against cybersecurity risks are circumvented or breached, this could result in the loss
of our intellectual property or other proprietary information, including customer data, and disruption of our
business operations.

Our ability to complete the proposed merger with Cameron is subject to various closing conditions and the
receipt of consents and approvals from government entities which may impose conditions that could
materially adversely affect Cameron or Schlumberger or cause the merger to be abandoned.

The merger agreement contains certain closing conditions, including approval of the proposed merger by
Cameron stockholders, the absence of injunctions or other legal restrictions and that no material adverse effect
shall have occurred with respect to either company. On December 17, 2015, Cameron stockholders voted to
adopt our proposed merger. Also, in November 2015 the U.S. Department of Justice cleared our proposed merger
without any conditions. However, we will be unable to complete the merger until consents and approvals are
received from the European Commission and various other governmental entities. Regulatory entities have broad
discretion in administering the governing regulations and may impose certain requirements or obligations as
conditions for their approval. The merger agreement may require us to accept conditions from these regulators
that could adversely affect the combined company. If the regulatory clearances are not received, or they are not
received on terms that satisfy the conditions set forth in the merger agreement, then we will not be obligated to
complete the merger. We can provide no assurance that the various closing conditions will be satisfied and that
the necessary approvals will be obtained, or that any required conditions will not materially adversely affect the
combined company following the merger. In addition, we can provide no assurance that these conditions will not
result in the abandonment or delay of the merger.

Failure to complete the proposed merger with Cameron could negatively impact our stock price and our
future business and financial results.

If the proposed merger is not completed, our ongoing business may be adversely affected and we would be
subject to several risks, including a decline in the market price of our common stock, negative customer
perception and diversion of management’s focus on pursuing other opportunities that could be beneficial to us, in
each case, without realizing any of the benefits that might have resulted had the merger been completed.

Multiple lawsuits have been filed against us and Cameron challenging the proposed merger, and an
adverse ruling in any such lawsuit may prevent the merger from being completed.

After the announcement of the proposed merger, four putative class action lawsuits were commenced on behalf
of stockholders of Cameron against Cameron and its directors, as well as against us and Schlumberger Holding
Corporation and Rain Merger Sub (both of which are indirect wholly-owned subsidiaries). These lawsuits were
consolidated for all purposes and a consolidated amended class action complaint (the “Consolidated Complaint”)
was filed. The Consolidated Complaint seeks various remedies, including enjoining the merger from being
consummated, rescission of the merger to the extent already implemented and the plaintiffs’ costs and fees.
Additional lawsuits with similar allegations may be filed. While we believe these lawsuits are without merit and
we intend to vigorously defend against such claims, the outcome of any such litigation is inherently uncertain.

13

One of the conditions to the closing of the merger is that no law, order, injunction, judgment, decree, ruling or
other similar requirement shall be in effect that prohibits the completion of the merger. Accordingly, if any of the
plaintiffs are successful in obtaining an injunction prohibiting the completion of the merger, then that injunction
may prevent the merger from becoming effective, or delay its becoming effective.

We may fail to realize the anticipated benefits of the proposed merger.

The success of the proposed merger will depend on, among other things, our ability to combine our business with
that of Cameron in a manner that facilitates growth opportunities and realizes anticipated synergies. However, we
must successfully combine both businesses in a manner that permits these benefits to be realized. In addition, we
must achieve the anticipated synergies without adversely affecting current revenues and investments in future
growth. If we are not able to successfully achieve these objectives, the anticipated benefits of the merger may not
be realized fully, may take longer to realize than expected, or may never be realized.

Potential issues and difficulties we may encounter in the integration process include the following:

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

difficulties in managing the expanded operations of a significantly larger and more complex combined
company;

lost sales and customers as a result of certain customers of either or both of the two companies deciding
not to do business with the combined company, or deciding to decrease their level of business in order
to reduce their reliance on a single company;

integrating personnel from the two companies while maintaining focus on providing consistent, high
quality products and customer service;

potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions
associated with the merger; and

performance shortfalls at one or both of the two companies as a result of the diversion of management’s
attention caused by completing the merger and integrating the companies’ operations.

Business issues currently faced by Cameron may impact our operations.

To the extent that Cameron currently has or is perceived by customers to have operational challenges, such as on-
time performance, safety issues or workforce issues, those challenges may raise concerns by our existing
customers following the merger, which may limit or impede our future ability to obtain additional work from
those customers.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Schlumberger owns or leases numerous manufacturing facilities, administrative offices, service centers, research
centers, data processing centers, mines, ore, drilling fluid and production chemical processing centers, sales
offices and warehouses throughout the world. Schlumberger views its principal manufacturing, mining and
processing facilities, research centers and data processing centers as its “principal owned or leased facilities.”

The following sets forth Schlumberger’s principal owned or leased facilities:

Beijing, China; Clamart, France; Fuchinobe, Japan; Oslo and Stavanger, Norway; Singapore; Abingdon,
Cambridge, Gatwick and Stonehouse, United Kingdom; Moscow, Russia; and within the United States: Boston,
Massachusetts; Houston, Katy, Rosharon and Sugar Land, Texas; Battle Mountain, Nevada; Greybull, Wyoming
and Florence, Kentucky.

14

Item 3. Legal Proceedings.

The information with respect to this Item 3. Legal Proceedings is set forth in Note 16 of the Consolidated
Financial Statements.

Item 4. Mine Safety Disclosures.

The barite and bentonite mining operations of M-I LLC, an indirect wholly-owned subsidiary, are subject to
regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act
of 1977. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in
Exhibit 95 to this Form 10-K.

15

PART II

Item 5. Market for Schlumberger’s Common Stock, Related Stockholder Matters and Issuer Purchases of
Equity Securities.

As of December 31, 2015, there were 23,831 stockholders of record. The principal United States market for
Schlumberger’s common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol
“SLB,” although it is traded on other exchanges in and outside the United States, including the Euronext Paris,
the London Stock Exchange and the SIX Swiss Exchange.

Common Stock, Market Prices and Dividends Declared per Share

Quarterly high and low prices for Schlumberger’s common stock as reported by the NYSE (composite
transactions), together with dividends declared per share in each quarter of 2015 and 2014, were as follows:

Price Range

High

Low

Dividends
Declared

2015
QUARTERS
First
Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

89.00
95.13
86.69
82.43

2014
QUARTERS

First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98.45
118.13
118.76
102.40

$

$

$

$

75.60
83.60
67.75
66.57

85.77
96.66
100.30
78.47

0.50
0.50
0.50
0.50

0.40
0.40
0.40
0.40

There are no legal restrictions on the payment of dividends or ownership or voting of such shares, except as to
shares held as treasury stock. Under current legislation, stockholders are not subject to any Curaçao withholding
or other Curaçao taxes attributable to the ownership of such shares.

16

The following graph compares the cumulative total stockholder return on Schlumberger common stock,
assuming reinvestment of dividends on the last day of the month of payment
into common stock of
Schlumberger, with the cumulative total return on the Standard & Poor’s 500 Index (S&P 500 Index) and the
cumulative total return on the Philadelphia Oil Service Index (OSX) over the five-year period ended
December 31, 2015. The stockholder return set forth below is not necessarily indicative of future performance.
The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the
SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that Schlumberger specifically incorporates it
by reference into such filing.

Comparison of five-year cumulative total return among
Schlumberger common stock, the S&P 500 Index and the
Philadelphia Oil Service Index (OSX)

Comparison of Cumulative Five-Year Total Return

$200

$150

$100

$50

$0
Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Schlumberger Ltd

S&P 500 Index

Philadelphia Oil Service Sector Index (OSX)

Assumes $100 invested on December 31, 2010 in Schlumberger common stock, in the S&P 500 Index and in the
Philadelphia Oil Service Index (OSX) and reinvestment of dividends on the last day of the month of payment.

Share Repurchases

On July 18, 2013, the Schlumberger Board of Directors (the “Board”) approved a $10 billion share repurchase
program for Schlumberger common stock, to be completed at the latest by June 30, 2018.

17

Schlumberger’s common stock repurchase program activity for the three months ended December 31, 2015 was
as follows:

(Stated in thousands, except per share amounts)

Total number
of shares
purchased

Average price
paid per share

2,398.0
1,525.7
1,473.7

5,397.4

$
$
$

$

74.00
78.44
68.92

73.86

Total number
of shares
purchased as
part of
publicly
announced
program

2,398.0
1,525.7
1,473.7

5,397.4

Maximum
value of shares
that may yet be
purchased
under the
program

$
$
$

1,644,290
1,524,623
1,423,058

October 1 through October 31, 2015 . . . . . . . . . . . . .
November 1 through November 30, 2015 . . . . . . . . .
December 1 through December 31, 2015 . . . . . . . . .

In connection with the exercise of stock options under Schlumberger’s stock incentive plans, Schlumberger
routinely receives shares of its common stock from optionholders in consideration of the exercise price of the
stock options. Schlumberger does not view these transactions as requiring disclosure under this Item 5 as the
number of shares of Schlumberger common stock received from optionholders is not material.

On January 21, 2016, the Board approved a new $10 billion share repurchase program for Schlumberger
common stock. This new program will take effect once the remaining $1.4 billion authorized to be repurchased
under the July 18, 2013 program is exhausted.

Unregistered Sales of Equity Securities

None.

Item 6. Selected Financial Data.

The following selected consolidated financial data should be read in conjunction with both “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8.
Financial Statements and Supplementary Data” of this Form 10-K in order to understand factors, such as business
combinations and charges and credits, which may affect the comparability of the Selected Financial Data:

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income from continuing operations . . . . . . . . . . $
Diluted earnings per share from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . $
Schlumberger stockholders’ equity . . . . . . . . . . . $
Cash dividends declared per share . . . . . . . . . . . $

(Stated in millions, except per share amounts)

Year Ended December 31

2014
48,580
5,643

4.31
10,518
66,904
5,387
10,565
37,850
1.60

$
$

$
$
$
$
$
$
$

2013
45,266
6,801

5.10
12,700
67,100
4,443
10,393
39,469
1.25

$
$

$
$
$
$
$
$
$

2012
41,731
5,230

3.91
11,788
61,547
5,111
9,509
34,751
1.10

$
$

$
$
$
$
$
$
$

2015
35,475
2,072

1.63
12,791
68,005
5,547
14,442
35,633
2.00

2011
36,579
4,516

3.32
10,001
55,201
4,850
8,556
31,263
1.00

$
$

$
$
$
$
$
$
$

(1)

“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 indebtedness by
reflecting cash and investments that could be used to repay debt.

18

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis contains forward-looking statements,
limitation,
statements relating to our plans, strategies, objectives, expectations, intentions and resources. Such forward-
looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this
Form 10-K.

including, without

Executive Overview

Schlumberger revenue of $35.5 billion in 2015 represented a drop of 27% from 2014 due to customer spending
falling as commodity prices weakened during the year. Revenue in North America decreased 39%, driven by a
land rig count that ended the year 68% lower than the peak seen in 2014 as well as by pricing pressure that
intensified during the year. North American offshore revenue fell more modestly as rigs in the US Gulf of
Mexico shifted from exploration to development work, although the overall market in North America was the
weakest for oilfield services since 1986. Internationally, revenue declined 21% as customers cut budgets and
pressured service pricing, with these effects often exacerbated by activity disruptions, project delays and
cancellations.

In the oil markets, the negative sentiments that had dominated the year accelerated during the fourth quarter after
some early optimism earlier in the summer. The impact of OPEC lifting production targets to produce at
maximum rates, combined with production in North America from unconventional resources declining slower
than expected following the April peak, has led to supply continuing to exceed increasing demand. As a result,
commodity prices fell dramatically, with oil dropping to a 12-year low by the end of the year. These weaker
fundamentals drove industry exploration and production (E&P) capital investment significantly lower, resulting
in the first two-year sequential decline in spend in 30 years.

In the natural gas markets, US production grew to a record of 75 Bcf/d, as new fields in the US Gulf of Mexico
were brought into production and supplies from unconventional shale gas and tight oil reservoirs continued to
grow. This trend is expected to continue with newly completed pipeline capacity in the northeast United States
bringing new supplies. A relatively mild start to the winter together with North American gas storage levels well
above the five-year average will keep natural gas prices low. Internationally, European gas demand growth
returned to positive territory. Despite this increased demand, storage levels are at record highs due to ample
supply from the North Sea and Russia, as well as from liquefied natural gas (LNG). Demand rebounded in Asia
but remained in a downward trend overall. As LNG exports from Australia grow, the region is likely to remain
oversupplied with low natural gas prices persisting.

Schlumberger’s financial performance in 2015 was significantly impacted by the large decrease in land activity,
particularly in the US, where the year-end land rig count was less than 700 rigs. This created massive
overcapacity in the land market
impacted pricing levels across a broad range of oilfield services.
Internationally, revenue in the Europe, CIS & Africa Area fell by 26% as a result of the weakening Russian
ruble, and due to a drop in exploration activities in the United Kingdom and Norway GeoMarkets. In Latin
America, revenue declined 22% due to decreased activity in Mexico, Brazil, and Colombia as a result of
sustained budget cuts that led to rig count reductions. Middle East & Asia Area revenue decreased 17% on lower
activity in the Asia Pacific region, particularly in Australia, although this was partially offset by robust activity in
the Gulf Cooperation Council countries, particularly Saudi Arabia, Kuwait, and Oman.

that

Among the Groups, Reservoir Characterization performance was negatively impacted by sustained cuts in
exploration spending, currency weaknesses, and operational disruptions from exhausted customer budgets that
affected Wireline activities, particularly in the Europe, CIS & Africa and Middle East & Asia Areas. In the
Drilling Group, the drop in drilling activity coupled with persistent pricing pressure, currency weaknesses and
operational disruptions lowered Drilling & Measurements and M-I SWACO revenues across all geographies but
most significantly in the Europe, CIS & Africa Area. Production Group performance was mainly affected by the
fall in North American land activity as exhausted customer budgets led to a continued decline in rig count and
increased pricing pressure.

19

In this uncertain environment, Schlumberger continues to focus on what it can control. Throughout the year,
Schlumberger took a number of actions to streamline and resize its organization as it continues to navigate the
current market downturn. In spite of current conditions, Schlumberger remains constructive in its view of the
market outlook in the medium term, and continues to believe that the underlying balance of supply and demand
will tighten, driven by growth in demand, weakening supply as the massive E&P investment cuts take effect, and
by the size of the annual supply replacement challenge.

Fourth Quarter 2015 Results

Product Groups

(Stated in millions)

Fourth Quarter 2015

Third Quarter 2015

Income
before
Taxes

Revenue

Revenue

Income
before
Taxes

Reservoir Characterization . . . . . . . . . . . . . . . . . . . .
Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . .

$

$

2,154
2,953
2,671
(34)

$

520
494
303
(29)

$

2,321
3,219
2,974
(42)

Pretax operating income . . . . . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income (2) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . . . . . . . . . . . . . . . . . .
Charges & credits (4) . . . . . . . . . . . . . . . . . . . . . . . . .

1,288
(179)
8
(83)
(2,136)

$

7,744

$

(1,102) $

8,472

$

Geographic Areas

614
594
330
(17)

1,521
(198)
8
(78)
-

1,253

(Stated in millions)

Fourth Quarter 2015

Third Quarter 2015

Income
before
Taxes

Revenue

Revenue

Income
before
Taxes

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . .

$

$

1,955
1,407
2,059
2,248
75

Pretax operating income . . . . . . . . . . . . . . . . . . .
Corporate & other (1)
. . . . . . . . . . . . . . . . . . . . . . . .
Interest income (2) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . . . . . . . . . . . . . . . . . .
Charges & credits (4) . . . . . . . . . . . . . . . . . . . . . . . . .

$

2,273
1,422
2,274
2,372
131

$

139
324
428
507
(110)

1,288
(179)
8
(83)
(2,136)

$

7,744

$

(1,102) $

8,472

$

202
295
505
641
(122)

1,521
(198)
8
(78)
-

1,253

(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs,
amortization expense associated with certain intangible assets, certain centrally managed initiatives and other
nonoperating items.

20

(2)

(3)

Excludes interest income included in the segments’ income (fourth quarter 2015: $6 million; third quarter 2015: $6
million).

Excludes interest expense included in the segments’ income (fourth quarter 2015: $8 million; third quarter 2015: $8
million).

(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.

Fourth-quarter revenue of $7.7 billion decreased $728 million, or 9%, sequentially with International revenue of
$5.7 billion decreasing $354 million, or 6%, and North America revenue decreasing $318 million, or 14%.
Pricing pressure accounted for more than one-third of the overall sequential revenue decline, with the remainder
attributable to a combination of lower activity levels and currency impacts.

Internationally, fourth-quarter revenue decreased 6% sequentially due to the combination of customer budget
cuts, the start of the seasonal winter slow-down, persistent pricing pressure, currency weakness and the near
absence of the usual year-end product, software, and multiclient seismic license sales. Europe/CIS/Africa Area
revenue decreased 9% sequentially mainly in Russia and Central Asia due to weakness in the Russian ruble, the
start of the seasonal winter slow-down in Russia as summer projects wound down, and activity reductions in the
Caspian region. Solid activity in the Nigeria & Gulf of Guinea and North Africa GeoMarkets was offset largely
by lower activity in the UK, Central & West Africa and Angola GeoMarkets as rig count declined and projects
ended. Middle East & Asia Area revenue declined 5% sequentially mainly due to lower activity in Australia and
the Asia-Pacific region as a result of customer budget cuts and project completions. Revenue from the Middle
East GeoMarkets was also lower as solid activity in Kuwait and Iraq was more than offset by reductions in the
rest of the region due to the effects of service pricing concessions, project cancellations, delayed start-ups of new
projects, and abrupt activity disruptions as budgets were exhausted. Latin America Area revenue decreased 1%
sequentially, mainly on significantly lower activity in the Colombia & Peru, Brazil, and Argentina, Bolivia &
Chile GeoMarkets due to customer budget cuts and currency weakness. These effects were largely offset by
multiclient seismic license sales in Mexico.

North America fourth-quarter revenue declined 14% sequentially, largely mirroring the US land rig count decline
of 15% as customer cash flows diminished and E&P budgets were exhausted. Land revenue fell 18% from lower
activity and persistent pricing pressure, while offshore revenue decreased 4%. The usual year-end surge in
multiclient seismic license sales was largely muted.

Fourth-quarter pretax operating income of $1.3 billion decreased $233 million, or 15%, sequentially with
International pretax operating income of $1.26 billion decreasing 13%, and North America pretax operating
income decreasing 31%.

Fourth-quarter 2015 pretax operating margin of 16.6% decreased 132 basis points (bps) sequentially.
Internationally, pretax operating margin of 22.0% decreased 170 bps sequentially as pricing pressure across the
Areas was partially offset by streamlining the cost and resource base. In addition, project cancellations, delayed
start-ups of new projects, and abrupt activity disruptions all contributed to the sequential reduction in pretax
operating margin, particularly in the Middle East & Asia Area. Middle East & Asia pretax operating margin
decreased 448 bps to 22.5%, Europe/CIS/Africa fell 138 bps to 20.8%, while Latin America increased 229 bps to
23.0% mainly due to strong margins from multiclient seismic license sales in Mexico and Central America.
North America pretax operating margin declined 175 bps 7.1% as a result of pricing pressure that impacted all
services and products.

Reservoir Characterization Group

Fourth-quarter revenue of $2.2 billion declined 7% sequentially, primarily due to sustained cuts in exploration
spending, the start of the seasonal winter slow-down, currency weakness, and operational disruptions from
exhausted customer budgets that impacted Wireline activities, particularly in the Europe/CIS/Africa and Middle
East & Asia Areas. This decline was partially offset by marine seismic surveys and multiclient seismic license
sales in Mexico. Year-end product and software sales were largely muted.

21

Pretax operating margin of 24.2% declined 230 bps sequentially as the contribution of high-margin multiclient
seismic sales was more than offset by a decline in high-margin Wireline services.

Drilling Group

Fourth-quarter revenue of $3.0 billion decreased 8% sequentially, primarily from a drop in drilling activity,
persistent pricing pressure, the start of the seasonal winter slow-down, currency weakness, and operational
disruptions from exhausted customer budgets that
impacted Drilling & Measurements and M-I SWACO
revenues, mainly in the Europe/CIS/Africa and Middle East & Asia Areas.

Pretax operating margin of 16.7% contracted 173 bps sequentially as revenue declined on pricing weakness and
abrupt operational disruptions.

Production Group

Fourth-quarter revenue of $2.7 billion decreased 10% sequentially with 80% of the decrease attributable to a
further decline in North American land activity as exhausted customer budgets led to a further decline in rig
count and increased pricing pressure. Market pricing for pressure pumping services dropped to even more
unsustainable levels.

Pretax operating margin of 11.3% increased 24 bps sequentially despite lower activity and increasing pricing
weakness in pressure pumping services. The decline in pressure pumping margin was largely offset by the
combination of accretive margin contributions from Schlumberger Production Management projects in Latin
America and higher net earnings from the OneSubsea joint venture.

Full-Year 2015 Results

Product Groups

(Stated in millions)

2015

2014

Income
before
Taxes

Revenue

Reservoir Characterization . . . . . . . . . . . . . . . . . . . . . . .
Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

9,501
13,563
12,548
(137)

Pretax operating income . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate & other (1)
Interest income (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges & credits (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,450
2,538
1,585
(63)

6,510
(768)
30
(316)
(2,575)

Revenue

$

$

12,905
18,128
17,763
(216)

Income
before
Taxes

3,708
3,805
3,193
(130)

10,576
(848)
31
(347)
(1,773)

$

35,475

$

2,881

$

48,580

$

7,639

22

Geographic Areas

(Stated in millions)

2015

2014

Income
before
Taxes

Revenue

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

9,811
6,014
9,284
9,898
468

Pretax operating income . . . . . . . . . . . . . . . . . . . . . .
Corporate & other (1)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3)
Charges & credits (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

999
1,315
1,979
2,661
(444)

6,510
(768)
30
(316)
(2,575)

Revenue

$

$

16,151
7,699
12,515
11,875
340

Income
before
Taxes

3,057
1,639
2,765
3,273
(158)

10,576
(848)
31
(347)
(1,773)

$

35,475

$

2,881

$

48,580

$

7,639

(1) Comprised principally of certain corporate expenses not allocated to the segments stock-based compensation costs,
amortization expense associated with certain intangible assets, certain centrally managed initiatives and other
nonoperating items.
Excludes interest income included in the segments’ income (2015: $22 million; 2014: $20 million).
Excludes interest expense included in the segments’ income (2015: $30 million; 2014: $22 million).

(2)

(3)

(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.

Full-year 2015 revenue of $35.5 billion decreased $13.1 billion, or 27%, versus the same period last year with
International revenue of $25.2 billion decreasing $6.9 billion, or 21%, and North America revenue of $9.8 billion
decreasing $6.3 billion, or 39%.

Internationally,
revenue decreased 21% year-on-year due to customer budget cuts and service pricing
concessions as customers responded to lower commodity prices. Revenue was also impacted by the fall of certain
currencies against the US dollar, which accounted for more than one-third of the revenue decline. Europe/CIS/
Africa Area revenue decreased 26%, mainly due to the weakness in the Russian ruble. Exploration activities in
the UK and Norway fell as customer spending decelerated. In Sub-Saharan Africa, offshore rigs demobilized as
exploration decreased. In North Africa, work progressed slowly while Libya activity remained muted, as onshore
operations were limited due to security concerns. Revenue in the Latin America Area declined 22% due to
significantly lower activity levels in Mexico, Brazil and Colombia because of sustained budget cuts that led to rig
count reductions. The impact of the devaluation of the Venezuela bolivar also affected the revenue decline in the
Venezuela, Trinidad and Tobago GeoMarket. Middle East & Asia Area revenue decreased 17% due to a double-
digit drop in revenue in the Asia-Pacific region, particularly in Australia. This decrease arose from reduced
activity and pricing concessions, but was partially offset by robust activity in the Gulf Cooperation Council
countries in the Middle East, particularly in Saudi Arabia, Kuwait and Oman. Activity in Iraq continued to
decline.

North America full-year 2015 revenue decreased 39% year-on-year mainly from land which was down 45%,
while offshore decreased 17% compared to the same period of 2014. The decrease in land was driven by severe
activity and pricing declines as customer spending was cut. With the year-end US land rig count 68% lower than
the 2014 peak, the massive over-capacity in the land services market offers no signs of pricing recovery in the
short- to medium-term. Offshore activity in the US Gulf of Mexico remained resilient, although revenue did
decline as work shifted from exploration to development activities driven by customer budget cuts.

23

Full-year 2015 pretax operating income of $6.5 billion decreased $4.1 billion, or 38%, versus the same period
last year with International pretax operating income of $6.0 billion decreasing 22% and North America pretax
operating income of $1.0 billion decreasing 67%.

Full-year 2015 pretax operating margin of 18.4% decreased 342 bps compared to 2014. Internationally, pretax
operating margin of 23.6% decreased 29 bps year-on-year. Middle East & Asia pretax operating margin
decreased 67 bps to 26.9%, Latin America expanded 58 bps to 21.9%, and Europe/CIS/Africa declined 79 bps to
21.3%. Despite the revenue decline from pricing concessions and an increasingly unfavorable shift in revenue
mix from offshore exploration to development, pretax operating margins were essentially flat internationally as a
result of proactive cost and resource management. North America pretax operating margin declined 874 bps
year-on-year to 10.2% on decreased pressure pumping activity and pricing weakness on land.

Reservoir Characterization Group

Full-year 2015 revenue of $9.5 billion was 26% lower than the same period last year primarily due to sustained
customer cuts in exploration and discretionary spending that impacted Wireline and Testing Technologies and
software sales. Revenue also decreased due to lower WesternGeco marine vessel utilization and reduced
multiclient sales.

Year-on-year, pretax operating margin decreased 294 bps to 25.8% as a result of an unfavorable overall revenue
mix reflecting the decline in high-margin exploration activity as well as lower high-margin multiclient and
software sales.

Drilling Group

Full-year 2015 revenue of $13.6 billion was 25% lower than the previous year primarily due to the severe drop in
rig count in North America, reduced activity levels and service pricing concessions internationally that mainly
affected Drilling & Measurements and M-I SWACO technologies. Unfavorable currency effects in Russia and
Venezuela also contributed to the decline.

Year-on-year, pretax operating margin decreased 228 bps to 18.7%, primarily due to a decrease in higher-margin
activities of Drilling & Measurements as well as pricing concessions. Despite the revenue decline, prompt action
on cost management and the benefit of a local cost structure that minimized the impact of unfavorable currency
effects on pretax operating income helped limit the operating margin decline.

Production Group

Full-year 2015 revenue of $12.5 billion decreased 29% year-on-year, with approximately two-thirds of the
decline attributable to Well Services pressure pumping technologies as a result of activity reductions and pricing
pressure as the land rig count declined dramatically in North America.

Year-on-year, pretax operating margin declined 535 bps to 12.6% as lower activity and increasing pricing
pressure continued in North America land.

24

Full-Year 2014 Results

Product Groups

2014

2013

(Stated in millions)

Income
before
Taxes

Revenue

Reservoir Characterization . . . . . . . . . . . . . . . . . . . . . $
Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . . . .

$

12,905
18,128
17,763
(216)

Pretax operating income . . . . . . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income (2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges and credits (4) . . . . . . . . . . . . . . . . . . . . . . . . .

3,708
3,805
3,193
(130)

10,576
(848)
31
(347)
(1,773)

Revenue

$

$

13,050
16,792
15,646
(222)

Income
before
Taxes

3,711
3,238
2,624
(229)

9,344
(726)
22
(369)
420

$

48,580

$

7,639

$

45,266

$

8,691

Geographic Areas

2014

2013

(Stated in millions)

Income
before
Taxes

Revenue

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . . . .

$

16,151
7,699
12,515
11,875
340

Pretax operating income . . . . . . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income (2)
Interest expense (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges and credits (4) . . . . . . . . . . . . . . . . . . . . . . . . .

3,057
1,639
2,765
3,273
(158)

10,576
(848)
31
(347)
(1,773)

Revenue

$

$

13,897
7,754
12,411
10,767
437

Income
before
Taxes

2,735
1,589
2,593
2,697
(270)

9,344
(726)
22
(369)
420

$

48,580

$

7,639

$

45,266

$

8,691

(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs,
amortization expense associated with certain intangible assets, certain centrally managed initiatives and other
nonoperating items.
Excludes interest income included in the segments’ income (2014: $20 million; 2013: $11 million).
Excludes interest expense included in the segments’ income (2014: $22 million; 2013: $22 million).

(3)

(2)

(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.

Full-year 2014 revenue of $48.6 billion grew $3.3 billion, or 7%, versus the same period last year with
International revenue of $32.1 billion increasing $1.2 billion, or 4%, and North America revenue of $16.2 billion
growing $2.3 billion, or 16%.

25

Internationally, higher activities in a number of GeoMarkets, both offshore and in key land markets, contributed
to the increase. The increase was led by the Middle East & Asia, which increased 10%, mainly from robust
drilling and exploration results in Saudi Arabia, Australia, the United Arab Emirates and Oman. Europe/CIS/
Africa increased 1%, led by the Sub-Saharan Africa region on strong development and exploration activities,
particularly in Central West Africa, Angola and Continental Europe GeoMarkets. Norway also experienced
strong growth driven by market share gains and higher rig-related services for a number of customers. Latin
America, however, decreased 1% primarily because of lower activity and pricing in Brazil and Mexico which
was partially offset by strong activity in Argentina and Ecuador.

North America revenue increased 16% mainly due to land, which was up 22%, while offshore was down 3%.
The increase in land was driven by market share gains in pressure pumping, artificial lift and drilling services.
The pressure pumping growth was augmented by improvements in operational efficiency and the introduction of
new technologies. The decrease in offshore revenue was attributable to lower drilling and exploration activities,
and due to a series of operational delays that impacted several product lines earlier in the year combined with
lower multiclient sales.

Full-year 2014 pretax operating income of $10.6 billion grew $1.2 billion, or 13%, versus the same period last
year with International pretax operating income of $7.7 billion increasing 12% and North America pretax
operating income of $3.1 billion increasing 12%.

Full-year 2014 pretax operating margin of 21.8% increased 113 bps compared to 2013, as pretax operating
margins internationally were up 168 bps, to 23.9%, while North America pretax operating margin was down 75
bps, to 18.9%. The increase in International Area margins reflected increased high-margin exploration activities,
market share gains, growth in accretive integration-related activities and premium pricing on new technology
introductions. The North America margin contraction reflected pressure pumping commodity inflation.

Reservoir Characterization Group

Full-year 2014 revenue of $12.9 billion was down 1% compared to 2013. Revenue increased in Testing Services,
from higher offshore exploration, and Software Integrated Solutions, driven by software sales across all
international areas. However, these increases were offset by lower WesternGeco marine vessel utilization and
reduced multiclient seismic sales.

Year-on-year, pretax operating margin increased 30 bps, to 28.7%, largely due to the higher-margin exploration
activities that benefited Wireline Technologies and Testing Services. Higher margin software sales also
contributed to the improvement. These increases were partially offset by lower profitability in WesternGeco due
to lower vessel utilization and multiclient seismic sales.

Drilling Group

Full-year 2014 revenue of $18.1 billion was 8% higher than 2013, primarily due to the robust demand for
Drilling & Measurements services and M-I SWACO Technologies as activity strengthened in the North America
and Middle East & Asia Areas. Land Rig revenue from the May 2014 acquisition of Saxon also contributed to
the growth.

Year-on-year, pretax operating margin increased 171 bps, to 21.0%, primarily due to the increase in higher-
margin exploration activities of Drilling & Measurements in North America offshore and in the international
markets. Improved profitability on Integrated Drilling Services activities also contributed to the margin increase.

Production Group

Full-year 2014 revenue of $17.8 billion increased 14% compared to 2013, primarily from Well Services pressure
pumping technologies driven by market share gains, improvements in operational efficiency and the introduction

26

of new technologies. Schlumberger Production Management (SPM) revenue grew as projects in Latin America
continued to progress ahead of work plans. Revenue from the expanding artificial lift business also contributed to
the year-on-year growth.

Year-on-year, pretax operating margin increased 121 bps, to 18.0%, mainly on improved profitability for Well
Services and Well Intervention, particularly internationally. SPM activities also contributed to the margin
expansion. However, these improvements were partially offset by the decrease in margins in North America due
to pressure pumping commodity cost inflation.

Interest and Other Income

Interest and other income consisted of the following:

(Stated in millions)

2015

2014

2013

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Earnings of equity method investments . . . . . . . . . . . . . . . . . . . . . . .

$

52
184

$

51
240

$

236

$

291

$

33
132

165

The decrease in earnings of equity method investments in 2015 as compared to 2014 primarily reflects the effects
of the downturn in the oil and gas industry, which has negatively impacted the majority of Schlumberger’s
investments in affiliates, particularly those in North America.

The increase in earnings of equity method investments in 2014 as compared to 2013 primarily reflects the strong
performance of a drilling service company in which Schlumberger has an investment, as well as the impact of the
first full year of results from the OneSubsea joint venture.

Interest Expense

Interest expense of $346 million in 2015 decreased by $23 million compared to 2014 primarily as the effect of an
increase in the weighted average debt balance of approximately $0.5 billion was more than offset by a 30 bps
decrease in the weighted average borrowing rates from 2.8% in 2014 to 2.5% in 2015.

Interest expense of $369 million in 2014 decreased by $22 million compared to 2013 primarily as the effect of an
increase in the weighted average debt balance of approximately $1.1 billion was more than offset by a 40 bps
decrease in the weighted average borrowing rates from 3.2% in 2013 to 2.8% in 2014.

Other

Research & engineering and General & administrative expenses, as a percentage of Revenue, were as follows:

Research & engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General & administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.1%
1.4%

2.5%
1.0%

2.6%
0.9%

2015

2014

2013

Income Taxes

The Schlumberger effective tax rate was 25.9% in 2015, 25.2% in 2014, and 21.3% in 2013.

The Schlumberger effective tax rate is sensitive to the geographic mix of earnings. When the percentage of
pretax earnings generated outside of North America increases, the Schlumberger effective tax rate will generally
decrease. Conversely, when the percentage of pretax earnings generated outside of North America decreases, the
Schlumberger effective tax rate will generally increase.

27

The effective tax rate for each of 2015, 2014 and 2013 was significantly impacted by the charges and credits
described in Note 3 to the Consolidated Financial Statements because they were only partially tax effective.
Excluding the impact of these charges and credits, the effective tax rate was 20.2% in 2015, 21.9% in 2014 and
22.9% in 2013. The decrease in the effective tax rate, excluding the impact of charges and credits, was primarily
attributable to the change in the geographic mix of earnings and the favorable resolution of tax examinations in
certain jurisdictions.

Charges and Credits

Schlumberger recorded significant charges and credits in continuing operations during 2015, 2014 and 2013.
These charges and credits, which are summarized below, are more fully described in Note 3 to the Consolidated
Financial Statements.

The following is a summary of the 2015 charges and credits, all of which were classified as Impairments & other
in the Consolidated Statement of Income:

Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fixed asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of SPM project
Facility closures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geopolitical events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency devaluation loss in Venezuela . . . . . . . . . . . . . . . . . . . . .
Contract termination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Stated in millions)

Pretax

Tax

Net

$

920
776
269
182
177
77
49
41
84

$

107
141
27
36
37
-
-
2
7

813
635
242
146
140
77
49
39
77

The following is a summary of the 2014 charges and credits, all of which were classified as Impairments & other
in the Consolidated Statement of Income:

$

2,575

$

357

$

2,218

(Stated in millions)

Pretax

Tax

Net

WesternGeco restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Currency devaluation loss in Venezuela . . . . . . . . . . . . . . . . . . . . . . .
Workforce reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of SPM project

$

806
472
296
199

$

25
-
37
72

781
472
259
127

$

1,773

$

134

$

1,639

The following is a summary of the 2013 charges and credits:

(Stated in millions)

Pretax

Tax

Net

Gain on formation of OneSubsea joint venture (1)
Impairment of equity method investments (2) . . . . . . . . . . . . . . . . . . . .
Provision for accounts receivable (3) . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Currency devaluation loss in Venezuela (2)

. . . . . . . . . . . . . . . . $

(1,028) $
364
152
92

$

(420) $

28

-
19
30
-

49

$

$

(1,028)
345
122
92

(469)

(1) Classified as Gain on formation of OneSubsea in the Consolidated Statement of Income.
(2) Classified in Impairments & other in the Consolidated Statement of Income.
(3) Classified in Cost of revenue in the Consolidated Statement of Income.

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 follow:

(Stated in millions)

2015

2014

2013

Income from continuing operations before concontrolling interests . . . . . . $
Gain on formation of OneSubsea joint venture . . . . . . . . . . . . . . . . . . . . . . .
Impairments and other charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization (1)
Earnings of equity method investments, less dividends received . . . . . . . . .
Pension and other postretirement benefits expense . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement benefits funding . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in working capital (2)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flow from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SPM investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Multiclient seismic data capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Free cash flow (3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from employee stock plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Business acquisitions and investments, net of cash acquired plus debt

assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for OneSubsea transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations - settlement with U.S. Department of Justice (4)
. .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Increase) decrease in Net Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Debt, Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,135 $
-
2,575
4,078
(125)
438
326
(346)
(478)
202

8,805

(2,410)
(953)
(486)

4,956

(2,419)
448
(2,182)

803

(478)
-
(233)
(252)

(160)
(5,387)

5,711 $
-
1,773
4,094
(113)
355
329
(390)
(36)
(528)

6,843
(1,028)
608
3,879
(71)
518
315
(538)
90
74

11,195

10,690

(3,976)
(740)
(321)

6,158

(1,968)
825
(4,678)

337

(1,501)
-
-
220

(944)
(4,443)

(3,943)
(902)
(394)

5,451

(1,608)
537
(2,596)

1,784

(610)
(600)
-
94

668
(5,111)

(4,443)

Net Debt, End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(5,547) $

(5,387) $

(1)

(2)

(3)

Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs and
SPM investments.
Includes severance payments of approximately $810 million during 2015.
“Free cash flow” represents cash flow from operations less capital expenditures, SPM investments and multiclient seismic data
capitalized. Management believes that this is an important measure because it represents funds available to reduce debt and pursue
opportunities that enhance shareholder value such as acquisitions and returning cash to shareholders through stock repurchases and
dividends.

29

(4) Refer to Note 20 to the Consolidated Financial Statements for details.

Components of Net Debt

(Stated in millions)

Dec. 31,
2015

Dec. 31,
2014

Dec. 31,
2013

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed income investments, held to maturity . . . . . . . . . . . . . . .
Long-term debt – current portion . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt

$

2,793
10,241
418
(3,011)
(1,546)
(14,442)

$

3,130
4,371
442
(1,244)
(1,521)
(10,565)

3,472
4,898
363
(1,819)
(964)
(10,393)

$

(5,547) $

(5,387) $

(4,443)

Key liquidity events during 2015, 2014 and 2013 included:

(cid:129)

(cid:129)

(cid:129)

(cid:129)

(cid:129)

On August 26, 2015, Schlumberger and Cameron jointly announced that they had entered into a
definitive merger agreement in which Cameron will merge with Schlumberger Holdings Corporation, an
indirect wholly-owned United States subsidiary of Schlumberger. Under the terms of the agreement,
Cameron shareholders will receive 0.716 shares of Schlumberger Limited common stock and a cash
payment of $14.44 in exchange for each Cameron share of common stock outstanding. In connection
with this transaction, Schlumberger Holdings Corporation will acquire approximately 137 million shares
of common stock from Schlumberger Limited and transfer these shares to Cameron’s shareholders.
Additionally, Schlumberger Holdings Corporation will pay cash of approximately $2.8 billion in
connection with this transaction. The transaction remains subject to certain regulatory approvals and
other customary closing conditions. It is anticipated that the closing of this transaction will occur in the
first quarter of 2016.

In order to partially fund the purchase of the 137 million shares of common stock from Schlumberger
Limited that will be transferred to Cameron stockholders, Schlumberger Holdings Corporation issued
the following notes during the fourth quarter of 2015:

–
–
–
–
–

$500 million of 1.90% Senior Notes due 2017;
$1.3 billion of 2.35% Senior Notes due 2018;
$1.6 billion of 3.00% Senior Notes due 2020;
$850 million of 3.63% Senior Notes due 2022; and
$1.75 billion of 4.00% Senior Notes due 2025.

Schlumberger Holdings Corporation expects to use a combination of cash on hand and commercial
paper borrowings to finance the difference between the proceeds received from the issuance of these
notes and the cash required to complete the Cameron merger.

During the fourth quarter of 2013, Schlumberger issued $1.5 billion of 3.65% Senior Notes due 2023.
During the fourth quarter of 2013, Schlumberger issued €0.5 billion of 1.50% Guaranteed Notes due
2019.

During the second quarter of 2013, Schlumberger paid Cameron $600 million in connection with the
formation of the OneSubsea joint venture.

On April 17, 2008, the Schlumberger Board of Directors (the “Board”) approved an $8 billion share
repurchase program for shares of Schlumberger common stock, to be acquired before December 31,
2011. On July 21, 2011, the Board approved an extension of this repurchase program to December 31,
2013. This program was completed during the third quarter of 2013.

30

On July 18, 2013, the Board approved a new $10 billion share repurchase program to be completed at
the latest by June 30, 2018. Schlumberger had repurchased $8.6 billion of shares under this new share
repurchase program as of December 31, 2015.

The following table summarizes the activity under these share repurchase programs during 2015, 2014
and 2013:

(Stated in thousands, except per share amounts)

Total cost
of shares
purchased

Total number
of shares
purchased

Average price
paid per
share

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2,182,180
4,677,687
2,596,447

26,751.0
47,545.9
31,349.5

$
$
$

81.57
98.38
82.82

On January 21, 2016, the Board approved a new $10 billion share repurchase program for Schlumberger
common stock. This new program will take effect once the remaining $1.4 billion authorized to be
repurchased under the July 18, 2013 program is exhausted.

(cid:129)

Net cash provided by operating activities was $8.8 billion in 2015, $11.2 billion in 2014 and $10.7
billion in 2013. The decrease in operating cash flows in 2015 as compared to 2014 was largely
attributable to lower earnings before non-cash charges and credits and depreciation and amortization
expense while the increase in operating cash flows in 2014 as compared to 2013 was largely attributable
to higher earnings before non-cash charges and credits and depreciation and amortization expense.

(cid:129)

Dividends paid during 2015, 2014 and 2013 were $2.4 billion, $2.0 billion and $1.6 billion, respectively.

(cid:129)

(cid:129)

(cid:129)

On January 15, 2015, Schlumberger announced that its Board approved a 25% increase in the quarterly
dividend, to $0.50.

On January 16, 2014, Schlumberger announced that its Board approved a 28% increase in the quarterly
dividend, to $0.40.

Capital expenditures were $2.4 billion in 2015, $4.0 billion in 2014 and $3.9 billion in 2013. Capital
expenditures are expected to be approximately $2.4 billion in 2016.

During the fourth quarter of 2015, Schlumberger made a $500 million cash investment into a new SPM
project. Schlumberger is obligated to make a further $500 million cash investment into this project
during the first quarter of 2016.

During 2015, 2014 and 2013 Schlumberger made contributions of $346 million, $390 million and $538
million, respectively, to its postretirement benefit plans. The US pension plans were 86% funded at both
December 31, 2015 and 2014 based on the projected benefit obligation.

Schlumberger’s international defined benefit pension plans were a combined 93% funded at
December 31, 2015 based on the projected benefit obligation. This compares to 94% funded at
December 31, 2014.

Schlumberger currently anticipates contributing approximately $350 million to its postretirement benefit
plans in 2016, subject to market and business conditions.

Schlumberger maintains a €5.0 billion Guaranteed Euro Medium Term Note program. This program provides for
the issuance of various types of debt instruments such as fixed or floating rate notes in Euro, US dollar or other
currencies. Schlumberger has issued €0.5 billion 1.50% Guaranteed Notes due 2019 under this program.

As of December 31, 2015, Schlumberger had $13.0 billion of cash and short-term investments on hand.
Schlumberger had separate committed debt facility agreements aggregating $3.8 billion with commercial banks,
of which $1.4 billion was available and unused as of December 31, 2015. The $3.8 billion of committed debt

31

facility agreements included $3.5 billion of committed facilities, which support commercial paper programs.
Schlumberger believes that these amounts are sufficient to meet future business requirements for at least the next
12 months.

The total outstanding commercial paper borrowings were $2.383 billion as of December 31, 2015 and $1.538
billion as of December 31, 2014.

Summary of Contractual Obligations

(Stated in millions)

Accumulated

Total

2016

2017-2018

2019-2020 After 2020

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Debt (1)
Interest on fixed rate debt obligations (2)
. . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations and other (3) . . . . . . . . . . .

$

18,999
2,444
1,428
1,922

$

4,558
401
261
1,734

$

4,152
740
367
120

$

2,511
653
274
49

7,778
650
526
19

$

24,793

$

6,954

$

5,379

$

3,487

$

8,973

(1)

(2)

Excludes future payments for interest.
Excludes interest on $4.7 billion of variable rate debt, which had a weighted average interest rate of 1.0% as of
December 31, 2015.

(3) Represents an estimate of contractual obligations in the ordinary course of business. Although these contractual
obligations are considered enforceable and legally binding, the terms generally allow Schlumberger the option to
reschedule and adjust its requirements based on business needs prior to the delivery of goods. This amount also reflects a
$500 million cash investment into an SPM project that Schlumberger is obligated to make during the first quarter of
2016.

Refer to Note 18, Pension and Other Benefit Plans, of the Consolidated Financial Statements for details
regarding Schlumberger’s pension and other postretirement benefit obligations.

As discussed in Note 14, Income Taxes, of the Consolidated Financial Statements, included in the Schlumberger
Consolidated Balance Sheet at December 31, 2015 is approximately $1.3 billion of liabilities associated with
uncertain tax positions in the over 100 jurisdictions in which Schlumberger conducts business. Due to the
uncertain and complex application of tax regulations, combined with the difficulty in predicting when tax audits
throughout the world may be concluded, Schlumberger cannot make reliable estimates of the timing of cash
outflows relating to these liabilities.

Schlumberger has outstanding letters of credit/guarantees that relate to business performance bonds, custom/
excise tax commitments, facility lease/rental obligations, etc. These were entered into in the ordinary course of
business and are customary practices in the various countries where Schlumberger operates.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles
generally accepted in the United States requires Schlumberger to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported
amounts of revenue and expenses. The following accounting policies involve “critical accounting estimates”
because they are particularly dependent on estimates and assumptions made by Schlumberger about matters that
are inherently uncertain.

32

Schlumberger bases its estimates on historical experience and on various assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

Multiclient Seismic Data

Schlumberger capitalizes the costs associated with obtaining multiclient seismic data. The carrying value of the
multiclient seismic data library at December 31, 2015 and 2014 was $1.03 billion and $793 million, respectively.
Such costs are charged to Cost of revenue based on the percentage of the total costs to the estimated total revenue
that Schlumberger expects to receive from the sales of such data. However, under no circumstances will an
individual survey carry a net book value greater than a 4-year, straight-line amortized value.

The carrying value of surveys is reviewed for impairment annually as well as when an event or change in
circumstance indicates an impairment may have occurred. Adjustments to the carrying value are recorded when it
is determined that estimated future revenues, which involve significant judgment on the part of Schlumberger,
would not be sufficient
to recover the carrying value of the surveys. Significant adverse changes in
Schlumberger’s estimated future cash flows could result in impairment charges in a future period. For purposes
of performing the annual impairment test of the multiclient library, larger surveys (which are typically prefunded
by customers) are analyzed for impairment on a survey-by-survey basis and smaller surveys are analyzed based
on two pools of surveys: United States and non-United States. The United States and non-United States pools
were determined to be the most appropriate level at which to perform the impairment review based upon a
number of factors, including (i) various macroeconomic factors that influence the ability to successfully market
surveys, and (ii) the focus of the sales force and related costs.

Allowance for Doubtful Accounts

Schlumberger maintains an allowance for doubtful accounts in order to record accounts receivable at their net
realizable value. Judgment is involved in recording and making adjustments to this reserve. Allowances have
been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit
and other collection issues such as disputed invoices. Depending on how such potential issues are resolved, or if
the financial condition of Schlumberger customers were to deteriorate resulting in an impairment of their ability
to make payments, adjustments to the allowance may be required.

Schlumberger operates in more than 85 countries. At December 31, 2015, only four of those countries
individually accounted for greater than 5% of Schlumberger’s accounts receivable balance, of which only two
(Venezuela and Mexico) accounted for greater than 10%. Schlumberger has experienced delays in payment from
its national oil company customer in Venezuela. During the fourth quarter of 2015, Schlumberger entered into an
agreement with its national oil company customer in Venezuela to receive certain fixed assets in lieu of payment
of approximately $200 million of accounts receivable.

Goodwill, Intangible Assets and Long-Lived Assets

Schlumberger records the excess of purchase price over the fair value of the tangible and identifiable intangible
assets acquired and liabilities assumed as goodwill. The goodwill relating to each of Schlumberger’s reporting
units is tested for impairment annually as well as when an event, or change in circumstances, indicates an
impairment may have occurred.

Under generally accepted accounting principles, Schlumberger has the option to first assess qualitative factors to
determine whether the existence of events or circumstances leads to a determination that it is more likely than not
that the fair value of one of its reporting units is greater than its carrying amount. If, after assessing the totality of
events or circumstances, Schlumberger determines it is more likely than not that the fair value of a reporting unit

33

is greater than its carrying amount, there is no need to perform any further testing. However, if Schlumberger
concludes otherwise, then it is required to perform the first step of a two-step impairment test by calculating the
fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the
fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the
implied fair value of the goodwill of the reporting unit is less than its carrying value.

Schlumberger has the option to bypass the qualitative assessment for any reporting unit in any period and
proceed directly to performing the first step of the two-step goodwill impairment test.

For purposes of performing the impairment test for goodwill, Schlumberger’s reporting units are its three
Groups: Reservoir Characterization, Drilling and Production. Schlumberger elected to perform the qualitative
assessment described above for purposes of its annual goodwill impairment
test in 2015. Based on this
assessment, Schlumberger concluded that it was more likely than not that the fair value of each of its reporting
units was greater than its carrying amount. Accordingly, no further testing was required.

Long-lived assets, including fixed assets, intangible assets and investments in SPM projects, are reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying value may not be
recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated
undiscounted future cash flows expected from the use of the assets and their eventual disposition. If such cash
flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the
carrying value of the long-lived asset to its estimated fair value, as was the case for certain assets in 2015 and
2014. The determination of future cash flows as well as the estimated fair value of long-lived assets involves
significant estimates on the part of management. If there is a material change in economic conditions or other
circumstances influencing the estimate of future cash flows or fair value, Schlumberger could be required to
recognize impairment charges in the future.

Income Taxes

Schlumberger conducts business in more than 100 tax jurisdictions, a number of which have tax laws that are not
fully defined and are evolving. Schlumberger’s tax filings are subject to regular audits by the tax authorities.
These audits may result in assessments for additional taxes that are resolved with the authorities or, potentially,
through the courts. Schlumberger recognizes the impact of a tax position in its financial statements if that
position is more likely than not of being sustained on audit, based on the technical merits of the position. Tax
liabilities are recorded based on estimates of additional taxes which will be due upon the conclusion of these
audits. Estimates of these tax liabilities are made based upon prior experience and are updated in light of changes
in facts and circumstances. However, due to the uncertain and complex application of tax regulations, the
ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In
such an event, Schlumberger will record additional tax expense or tax benefit in the period in which such
resolution occurs.

Pension and Postretirement Benefits

Schlumberger’s pension and postretirement benefit obligations are described in detail
in Note 18 to the
Consolidated Financial Statements. The obligations and related costs are calculated using actuarial concepts,
which include critical assumptions related to the discount rate, expected rate of return on plan assets and medical
cost trend rates. These assumptions are important elements of expense and/or liability measurement and are
updated on an annual basis, or upon the occurrence of significant events.

The discount rate that Schlumberger uses reflects the prevailing market rate of a portfolio of high-quality debt
instruments with maturities matching the expected timing of the payment of the benefit obligations. The
following summarizes the discount rates utilized by Schlumberger for its various pension and postretirement
benefit plans:

(cid:129)

The discount rate utilized to determine the liability for Schlumberger’s United States pension plans
and postretirement medical plans was 4.50% at December 31, 2015 and 4.15% at December 31,
2014.

34

(cid:129)

(cid:129)

(cid:129)

The weighted-average discount
international pension plans was 4.36% at December 31, 2015 and 4.07% at December 31, 2014.

rate utilized to determine the liability for Schlumberger’s

The weighted-average discount rate utilized to determine expense for Schlumberger’s United States
pension plans and postretirement medical plans decreased from 4.85% in 2014 to 4.15% in 2015.

The weighted-average discount rate utilized to determine expense for Schlumberger’s international
pension plans decreased from 4.76% in 2014 to 4.07% in 2015.

The expected rate of return for Schlumberger’s retirement benefit plans represents the average rate of return
expected to be earned on plan assets over the period that benefits included in the benefit obligation are expected
to be paid. The expected rate of return for Schlumberger’s United States pension plans has been determined
based upon expected rates of return for the investment portfolio, with consideration given to the distribution of
investments by asset class and historical rates of return for each individual asset class. The weighted average
expected rate of return on plan assets for the United States pension plans was 7.25% in both 2015 and 2014. The
weighted average expected rate of return on plan assets for the international pension plans was 7.50% in both
2015 and 2014. A lower expected rate of return would increase pension expense.

Schlumberger’s medical cost trend rate assumptions are developed based on historical cost data, the near-term
outlook and an assessment of likely long-term trends. The overall medical cost trend rate assumption utilized to
determine the 2015 postretirement medical expense was 7.0% graded to 5.0% over the next ten years. The overall
medical trend rate assumption utilized to determine the postretirement medical liability at December 31, 2015
was 7.0% graded to 5.0% over the next ten years.

The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant,
for the United States and international pension plans:

Change in Assumption

(Stated in millions)

Effect on 2015
Pretax Pension
Expense

Effect on
Dec. 31, 2015
Liability

25 basis point decrease in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . .
25 basis point increase in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . .
25 basis point decrease in expected return on plan assets . . . . . . . . . . . .
25 basis point increase in expected return on plan assets . . . . . . . . . . . .

+$68
-$65
+$25
-$24

+$457
-$431
-
-

The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant,
for Schlumberger’s United States postretirement medical plans:

Change in Assumption

Effect on 2015
Pretax Pension
Expense

(Stated in millions)

Effect on
Dec. 31, 2015
Liability

25 basis point decrease in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . .
25 basis point increase in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . .
100 basis point decrease per annum in medical cost trend rate . . . . . . . .
100 basis point increase per annum in medical cost trend rate . . . . . . . .

+$6
-$5
-$6
+$7

+$39
-$37
-$33
+$37

Investments in Affiliated Companies

Investments in Affiliated Companies on the consolidated balance sheet primarily reflects Schlumberger’s
investments in privately held companies, some of which are in the startup or development stages and are often
still defining their strategic direction. Such investments are inherently risky and their success is dependent on

35

factors such as technology development, market acceptance and their ability to raise additional funds. The
technology being developed by these companies may never materialize and they could fail. Schlumberger
monitors its portfolio to determine if any investment is other-than-temporarily impaired. If an investment is
considered to be other-than-temporarily impaired, it is written down to its fair value, as was the case for certain
investments in 2015 and 2013.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Schlumberger is subject to market risks primarily associated with changes in foreign currency exchange rates and
interest rates.

As a multinational company, Schlumberger conducts business in approximately 85 countries. Schlumberger’s
functional currency is primarily the US dollar, which is consistent with the oil and gas industry. Approximately
83% of Schlumberger’s revenue in 2015 was denominated in US dollars. However, outside the United States, a
significant portion of Schlumberger’s expenses is incurred in foreign currencies. Therefore, when the US dollar
weakens in relation to the foreign currencies of the countries in which Schlumberger conducts business, the US
dollar-reported expenses will increase.

A 5% increase or decrease in the average exchange rates of all the foreign currencies in 2015 would have
changed revenue by approximately 1%. If the 2015 average exchange rates of the US dollar against all foreign
currencies had strengthened by 5%, Schlumberger’s pretax operating income would have increased by
approximately 3%. Conversely, a 5% weakening of the US dollar average exchange rates would have decreased
pretax operating income by approximately 3%.

Please refer to Note 3 to the Consolidated Financial Statements for a discussion of exchange rates as it relates to
Schlumberger’s operations in Venezuela.

Schlumberger maintains a foreign-currency risk management strategy that uses derivative instruments to protect
its interests from unanticipated fluctuations in earnings and cash flows caused by volatility in currency exchange
rates. Foreign currency forward contracts and foreign currency options provide a hedge against currency
fluctuations either on monetary assets/liabilities denominated in other than a functional currency or on expenses.

At December 31, 2015, contracts were outstanding for the US dollar equivalent of $3.8 billion in various foreign
currencies of which $1.2 billion relate to hedges of debt balances denominated in currencies other than the
functional currency.

Schlumberger is subject to interest rate risk on its debt and its investment portfolio. Schlumberger maintains an
interest rate risk management strategy that uses a mix of variable and fixed rate debt combined with its
investment portfolio and occasionally interest rate swaps to mitigate the exposure to changes in interest rates. At
December 31, 2015, Schlumberger had fixed rate debt aggregating approximately $14.3 billion and variable rate
debt aggregating approximately $4.7 billion before considering the effects of cross currency swaps.

Schlumberger’s exposure to interest rate risk associated with its debt is also partially mitigated by its investment
portfolio. Both Short-term investments and Fixed income investments, held to maturity, which totaled
approximately $10.7 billion at December 31, 2015, are comprised primarily of money market funds, time
deposits, certificates of deposit, commercial paper, bonds and notes, substantially all of which are denominated
in US dollars. The average return on investments was 1.0% in 2015.

36

The following table represents the carrying amounts of Schlumberger’s debt at December 31, 2015 by year of maturity:

2016

2017

2018

2019

2020

2021

2022

2023

2025

Total

Expected Maturity Dates

(Stated in millions)

Fixed rate debt
1.95% Senior Notes . . . . . . . $ 1,100
2.65% Senior Notes . . . . . . .
500
1.25% Senior Notes . . . . . . .
1.90% Senior Notes . . . . . . .
2.35% Senior Notes . . . . . . .
1.50% Guaranteed Notes . . .
3.00% Senior Notes . . . . . . .
3.30% Senior Notes . . . . . . .
4.20% Senior Notes . . . . . . .
2.40% Senior Notes . . . . . . .
3.63% Senior Notes . . . . . . .
3.65% Senior Notes . . . . . . .
4.00% Senior Notes . . . . . . .

$ 1,000
499

$ 1,297

$

566

$ 1,591

$ 1,100
500
1,000
499
1,297
566
1,591
1,597
1,100
999
845
1,496
1,741

$ 1,597
1,100

$

999
845

$ 1,496

$ 1,741

Total fixed rate debt . . . . . . . $ 1,600 $ 1,499 $ 1,297 $
Variable rate debt . . . . . . .

2,957

1,329

28

566 $ 1,591 $ 2,697 $ 1,844 $ 1,496 $ 1,741 $14,331
4,668
354

-

-

-

-

-

Total

. . . . . . . . . . . . . . . . . . $ 4,557 $ 1,527 $ 2,626 $

920 $ 1,591 $ 2,697 $ 1,844 $ 1,496 $ 1,741 $18,999

The fair market value of the outstanding fixed rate debt was approximately $14.3 billion as of December 31, 2015. The
weighted average interest rate on the variable rate debt as of December 31, 2015 was 1.0%.

Schlumberger does not enter into derivatives for speculative purposes.

Forward-looking Statements

This Form 10-K and other statements we make contain “forward-looking statements” within the meaning of the federal
securities laws, which include any statements that are not historical facts, such as our forecasts or expectations
regarding business outlook; growth for Schlumberger as a whole and for each of its segments (and for specified
products or geographic areas within each segment); oil and natural gas demand and production growth; oil and natural
gas prices; improvements in operating procedures and technology; capital expenditures by Schlumberger and the oil
and gas industry; the business strategies of Schlumberger’s customers; the integration of Cameron into our business;
the anticipated benefits of the Cameron transaction; the success of Schlumberger’s joint ventures and alliances; future
global economic conditions; and future results of operations. These statements are subject to risks and uncertainties,
including, but not limited to, global economic conditions; changes in exploration and production spending by
Schlumberger’s customers and changes in the level of oil and natural gas exploration and development; general
economic, political and business conditions in key regions of the world; pricing erosion; weather and seasonal factors;
operational modifications, delays or cancellations; production declines; changes in government regulations and
regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives,
chemicals, hydraulic fracturing services and climate-related initiatives; the inability of technology to meet new
challenges in exploration; the risk that the contemplated Cameron merger will not occur, negative effects from the
pendency of the contemplated Cameron merger; the inability after the closing of the Cameron merger to successfully
integrate the merged businesses and to realize expected synergies; the inability to retain key employees; expenses for
the merger; and other risks and uncertainties detailed in the Risk Factors section of this Form 10-K and other filings
that we make with the Securities and Exchange Commission. If one or more of these or other risks or uncertainties
materialize (or the consequences of such a development changes), or should our underlying assumptions prove

37

incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements.
Schlumberger disclaims any intention or obligation to update publicly or revise such statements, whether as a
result of new information, future events or otherwise.

38

Item 8. Financial Statements and Supplementary Data.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Stated in millions, except per share amounts)

2015

2014

2013

Year Ended December 31,
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest & other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on formation of OneSubsea . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses

Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research & engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General & administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairments & other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations before taxes . . . . . . . . . . . . . . .
Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . .

$

35,475
236
-

28,321
1,094
494
2,575
346

2,881
746

2,135
-

2,135
63

$

48,580
291
-

37,398
1,217
475
1,773
369

7,639
1,928

5,711
(205)

5,506
68

Net income attributable to Schlumberger . . . . . . . . . . . . . . . . . . . . . $

2,072

$

5,438

$

Schlumberger amounts attributable to:

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .

2,072
-

5,643
(205)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2,072

$

5,438

$

Basic earnings per share of Schlumberger

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . $
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Diluted earnings per share of Schlumberger

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . $
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .

Net income (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1.63
-

1.63

1.63
-

1.63

$

$

$

$

4.36
(0.16)

4.20

4.31
(0.16)

4.16

$

$

$

$

Average shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assuming dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,267
1,275

1,295
1,308

(1)

Amounts may not add due to rounding.

See the Notes to Consolidated Financial Statements

39

45,266
165
1,028

35,331
1,174
416
456
391

8,691
1,848

6,843
(69)

6,774
42

6,732

6,801
(69)

6,732

5.14
(0.05)

5.09

5.10
(0.05)

5.05

1,323
1,333

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year Ended December 31,

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Currency translation adjustments

(Stated in millions)

2015

2014

2013

2,135

$

5,506

$

6,774

Unrealized net change arising during the period . . . . . . . . . . . .

(522)

Marketable securities

Unrealized (loss) gain arising during the period . . . . . . . . . . . .
Reclassification to net income - impairment charge . . . . . . . . .

Cash flow hedges

Net (loss) gain on cash flow hedges . . . . . . . . . . . . . . . . . . . . .
Reclassification to net income of net realized gain (loss) . . . . .

Pension and other postretirement benefit plans

Actuarial gain (loss)

Actuarial (loss) gain arising during the period . . . . . . . . . .
Amortization to net income of net actuarial loss . . . . . . . . .

Prior service cost

Amortization to net income of net prior service cost . . . . . .

Income taxes on pension and other postretirement benefit

plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Comprehensive income attributable to noncontrolling

(50)
40

(178)
235

(210)
306

101

(74)

1,783

interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63

(463)

(166)
-

(238)
113

(1,285)
177

128

82

3,854

68

(151)

35
-

49
(50)

1,328
300

125

(302)

8,108

42

Comprehensive income attributable to Schlumberger . . . . . . . . . . $

1,720

$

3,786

$

8,066

See the Notes to Consolidated Financial Statements

40

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

December 31,
ASSETS
Current Assets

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables less allowance for doubtful accounts (2015 - $333; 2014 - $275)
. .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

Fixed Income Investments, held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in Affiliated Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Assets less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Multiclient Seismic Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LIABILITIES AND EQUITY
Current Liabilities

Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated liability for taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt - current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Postretirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schlumberger stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See the Notes to Consolidated Financial Statements

41

(Stated in millions)

2015

2014

$

2,793
10,241
8,780
3,756
208
1,134

26,912
418
3,311
13,415
1,026
15,605
4,569
2,749

$

68,005

$

7,727
1,203
3,011
1,546
634

14,121
14,442
1,434
1,075
1,028

32,100

12,693
(13,372)
40,870
(4,558)

35,633
272

35,905

$

68,005

$

3,130
4,371
11,171
4,628
144
1,250

24,694
442
3,235
15,396
793
15,487
4,654
2,203

66,904

9,246
1,647
1,244
1,521
518

14,176
10,565
1,501
1,296
1,317

28,855

12,495
(11,772)
41,333
(4,206)

37,850
199

38,049

66,904

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended December 31,

Cash flows from operating activities:

(Stated in millions)

2015

2014

2013

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Add: Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2,135
-

$

5,506
205

6,774
69

Adjustments to reconcile net income to cash provided by operating activities:

Gain on formation of OneSubsea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairments and other charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization (1)
Pension and other postretirement benefits expense . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement benefits funding . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings of equity method investments, less dividends received . . . . . . . . . . . . . . . .

Change in assets and liabilities: (2)

Decrease (increase) in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) increase in accounts payable and accrued liabilities . . . . . . . . . . . . . . . .
(Decrease) increase in estimated liability for taxes on income . . . . . . . . . . . . . . . . .
Increase (decrease) in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flows from investing activities:

Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SPM investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Multiclient seismic data capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business acquisitions and investments, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . .
(Purchase) sale of investments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-
2,575
4,078
438
326
(346)
(125)

2,176
625
76
16
(2,656)
(699)
24
162

8,805

(2,410)
(953)
(486)
(443)
(5,848)
(112)

NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10,252)

Cash flows from financing activities:

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (decrease) increase in short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . .

Cash flow (used in) provided by discontinued operations - operating activities . . . . . . . . . . . . .
Cash flow used in discontinued operations - investing activities . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flow (used in) provided by discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net (decrease) increase in cash before translation effect
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Translation effect on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,419)
296
152
(2,182)
9,565
(3,771)
(3)
(264)

1,374

(233)
-

(233)

(306)
(31)
3,130

-
1,773
4,094
355
329
(390)
(113)

(187)
(36)
119
(134)
(36)
104
(79)
(315)

(1,028)
608
3,879
518
315
(538)
(71)

(803)
188
17
(78)
654
34
60
92

11,195

10,690

(3,976)
(740)
(321)
(1,008)
446
19

(5,580)

(1,968)
295
530
(4,678)
2,289
(2,878)
552
(38)

(5,896)

24
-

24

(257)
(85)
3,472

(3,943)
(902)
(394)
(1,210)
(648)
218

(6,879)

(1,608)
270
267
(2,596)
4,554
(3,141)
37
18

(2,199)

(2)
(28)

(30)

1,582
(15)
1,905

Cash, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2,793

$

3,130

$

3,472

(1)

(2)

Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs and SPM
investments.
Net of the effect of business acquisitions and divestitures.

See the Notes to Consolidated Financial Statements

42

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Common Stock

Issued

In Treasury

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Noncontrolling
Interests

Total

(Stated in millions)

Balance, January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments . . . . . . . . . . . . . . . . . .
Changes in fair value of marketable securities . . . . . . . .
Changes in fair value of cash flow hedges . . . . . . . . . . .
Pension and other postretirement benefit plans . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . .
Dividends declared ($1.25 per share) . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance, December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments . . . . . . . . . . . . . . . . . .
Changes in fair value of marketable securities . . . . . . . .
Changes in fair value of cash flow hedges . . . . . . . . . . .
Pension and other postretirement benefit plans . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . .
Dividends declared ($1.60 per share) . . . . . . . . . . . . . . .
Shares issued for acquisition . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance, December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments . . . . . . . . . . . . . . . . . .
Changes in fair value of marketable securities . . . . . . . .
Changes in fair value of cash flow hedges . . . . . . . . . . .
Pension and other postretirement benefit plans . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . .
Dividends declared ($2.00 per share) . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

11,912

$

(6,160) $

$

(3,888) $

32,887
6,732

$

107
42

(44)
(56)
18

315

47

311
56
252
(2,596)

2

12,192

(8,135)

(26)
(79)
33

329

72
(26)

556
79
262
(4,678)

141
3

12,495

(11,772)

(1,653)

37,966
5,438

(2,071)

41,333
2,072

(38)
(112)
17

326

5

190
112
279
(2,182)

(2,535)

1

(151)
35
(1)
1,451

(2,554)

(463)
(166)
(125)
(898)

(4,206)

(522)
(10)
57
123

17

166
68

(35)

199
63

10

34,858
6,774
(151)
35
(1)
1,451
267
-
270
(2,596)
315
(1,653)
66

39,635
5,506
(463)
(166)
(125)
(898)
530
-
295
(4,678)
329
(2,071)
213
(58)

38,049
2,135
(522)
(10)
57
123
152
-
296
(2,182)
326
(2,535)
16

Balance, December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . .

$

12,693

$

(13,372) $

40,870

$

(4,558) $

272

$

35,905

See the Notes to Consolidated Financial Statements

43

SCHLUMBERGER LIMITED AND SUBSIDIARIES

SHARES OF COMMON STOCK

Issued

In Treasury

(Stated in millions)

Shares
Outstanding

Balance, January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance, December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . . . . . . . .
Shares issued for acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance, December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance, December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See the Notes to Consolidated Financial Statements

1,434
-
-
-
-

1,434
-
-
-
-
-

1,434
-
-
-
-

1,434

(106)
5
1
4
(31)

(127)
9
1
4
2
(48)

(159)
3
1
4
(27)

(178)

1,328
5
1
4
(31)

1,307
9
1
4
2
(48)

1,275
3
1
4
(27)

1,256

44

Notes to Consolidated Financial Statements

1. Business Description

Schlumberger Limited (Schlumberger N.V.,
(collectively, “Schlumberger”) comprise the world’s leading supplier of
management and information solutions to the international oil and gas exploration and production industry.

incorporated in Curaçao) and its consolidated subsidiaries
integrated project

technology,

On August 26, 2015, Schlumberger and Cameron International Corporations (Cameron) jointly announced that
they had entered into a definitive merger agreement in which Cameron will merge with an indirect wholly-owned
subsidiary of Schlumberger in a stock and cash transaction. Cameron designs, manufactures, markets and
services equipment used by the oil and gas industry and industrial manufacturing companies. Under the terms of
the merger agreement, Cameron shareholders will receive 0.716 shares of Schlumberger common stock and a
cash payment of $14.44 in exchange for each Cameron share of common stock outstanding. Schlumberger
estimates that it will issue approximately 137 million shares of its common stock and pay cash of approximately
$2.8 billion in connection with this transaction. The transaction remains subject to certain regulatory approvals
and customary closing conditions. It is anticipated that the closing of the transaction will occur in the first quarter
of 2016. Cameron reported revenue of $10.4 billion for the year ended December 31, 2014.

2. Summary of Accounting Policies

The Consolidated Financial Statements of Schlumberger have been prepared in accordance with accounting
principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis,
including those related to collectibility of accounts receivable;
Schlumberger evaluates its estimates,
recoverability of fixed assets, goodwill, intangible assets, Schlumberger Production Management investments
and investments in affiliates; income taxes; multiclient seismic data; contingencies and actuarial assumptions for
employee benefit plans. Schlumberger bases its estimates on historical experience and other assumptions that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.

Revenue Recognition

Schlumberger recognizes revenue based upon purchase orders, contracts or other persuasive evidence of an
arrangement with the customer that include fixed or determinable prices provided that collectibility is reasonably
assured. Revenue is recognized for services when they are rendered. Revenue is recognized for products upon
delivery and when the customer assumes the risks and rewards of ownership.

Revenue from seismic contract services performed on a dayrate basis is recognized as the service is performed.
Revenue from other services, including pre-funded multiclient surveys, is recognized as the seismic data is
acquired and/or processed on a proportionate basis as work is performed. This method requires revenue to be
recognized based upon quantifiable measures of progress, such as square kilometers acquired. Multiclient data
surveys are licensed or sold to customers on a non-transferable basis. Revenue from sales of completed
multiclient data surveys is recognized upon obtaining a signed licensing agreement and providing customers with
access to such data.

45

Revenue is occasionally generated from contractual arrangements that include multiple deliverables. Revenue
from these arrangements is recognized as each item is delivered based on their relative fair value, provided that
the delivered items have stand-alone value to the customer.

Revenue derived from the sale of licenses of Schlumberger software may include installation, maintenance,
consulting and training services. If services are not essential to the functionality of the software, the revenue for
each element of the contract is recognized separately based on its respective vendor specific objective evidence
of fair value when all of the following conditions are met: a signed contract is obtained, delivery has occurred,
the fee is fixed or determinable and collectibility is probable.

Short-term and Fixed Income Investments

The Consolidated Balance Sheet reflects the Schlumberger investment portfolio separated between current and
long term, based on maturity. Both Short-term investments and Fixed Income Investments, held to maturity are
comprised primarily of money market funds, time deposits, certificates of deposit, commercial paper, bonds and
notes, substantially all of which are denominated in US dollars. Under normal circumstances Schlumberger
intends to hold such investments until maturity. These investments are stated at cost plus accrued interest, which
approximates market.

For purposes of the Consolidated Statement of Cash Flows, Schlumberger does not consider Short-term
investments to be cash equivalents.

Fixed Income Investments, held to maturity at December 31, 2015 of $418 million mature as follows: $107
million in 2017, $298 million in 2018, $12 million in 2019 and $1 million in 2020.

Investments in Affiliated Companies

Investments in companies in which Schlumberger does not have a controlling financial interest, but over which it
has significant influence are accounted for using the equity method. Schlumberger’s share of the after-tax
earnings of equity method investees is included in Interest and other income. Investments in privately held
companies in which Schlumberger does not have the ability to exercise significant influence are accounted for
using the cost method. Investments in publicly traded companies in which Schlumberger does not have
significant influence are accounted for as available-for-sale marketable securities. These marketable securities
are reported at fair value, based on quoted market prices, with unrealized gains and losses reported as a
component of Accumulated other comprehensive loss. The fair value of these marketable securities was $41
million at December 31, 2015 ($91 million at December 31, 2014). The cost basis of these marketable securities
was $41 million at December 31, 2015 ($81 million at December 31, 2014) after reflecting a $40 million other-
than-temporary impairment charge recorded during the fourth quarter of 2015.

Equity and cost method investments as well as investments in publicly traded companies are classified as
Investments in Affiliated Companies in the Consolidated Balance Sheet.

Multiclient Seismic Data

The multiclient library consists of completed and in-process seismic surveys that are licensed on a nonexclusive
basis. Schlumberger capitalizes costs directly incurred in acquiring and processing the multiclient seismic data.
Such costs are charged to Cost of revenue based on the percentage of the total costs to the estimated total revenue
that Schlumberger expects to receive from the sales of such data. However, under no circumstance will an
individual survey carry a net book value greater than a 4-year, straight-line amortized value.

The carrying value of the multiclient library is reviewed for impairment annually as well as when an event or
change in circumstance indicating impairment may have occurred. Adjustments to the carrying value are

46

recorded when it is determined that estimated future cash flows, which involves significant judgment on the part
of Schlumberger, would not be sufficient to recover the carrying value of the surveys. Significant adverse
changes in Schlumberger’s estimated future cash flows could result in impairment charges in a future period.

Schlumberger Production Management

Schlumberger Production Management (“SPM”) projects are focused on developing and co-managing the
production of Schlumberger customers’ assets under long-term agreements. Schlumberger will invest its own
services, products and in some cases cash, into the field development activities and operations. Although in
certain arrangements Schlumberger is paid for a portion of the services or products it provides, generally
Schlumberger will not be paid at the time of providing its services or upon delivery of its products. Instead,
Schlumberger is compensated based upon cash flow generated or on a fee-per-barrel basis. This may include
certain arrangements whereby Schlumberger is only compensated based upon incremental production it helps
deliver above a mutually agreed baseline.

Schlumberger capitalizes its cash investments in a project as well as the direct costs associated with providing
services or products for which Schlumberger will be compensated when the related production is achieved.
Revenue is recognized as the related production is achieved. These capitalized investments are amortized to the
Consolidated Statement of Income as the related oil production is achieved based on the units of production
method, whereby each unit produced is assigned a pro-rata portion of the unamortized costs based on estimated
total production, resulting in a matching of revenue with the applicable costs.

The unamortized portion of Schlumberger’s investments in SPM projects was approximately $1.829 billion and
$1.411 billion at December 31, 2015 and 2014, respectively. These amounts are included within Other Assets in
Schlumberger’s Consolidated Balance Sheet.

Concentration of Credit Risk

Schlumberger’s assets that are exposed to concentrations of credit risk consist primarily of cash, short-term
investments, fixed income investments held to maturity, receivables from clients and derivative financial
instruments. Schlumberger places its cash, short-term investments and fixed income investments held to maturity
with financial institutions and corporations, and limits the amount of credit exposure with any one of them.
Schlumberger regularly evaluates the creditworthiness of the issuers in which it invests. By using derivative
financial instruments to hedge certain exposures, Schlumberger exposes itself to some credit risk. Schlumberger
minimizes this credit risk by entering into transactions with high-quality counterparties, limiting the exposure to
each counterparty and monitoring the financial condition of its counterparties.

Schlumberger operates in more than 85 countries and as such, its accounts receivable are spread over many
countries and customers. As of December 31, 2015, only two countries (Venezuela and Mexico) individually
accounted for greater than 10% of Schlumberger’s accounts receivable balance. Schlumberger has experienced
delays in payment from its national oil company customer in Venezuela. Schlumberger maintains an allowance
for uncollectible accounts receivable based on expected collectibility and performs ongoing credit evaluations of
its customers’ financial condition. If the financial condition of its customers were to deteriorate resulting in an
impairment of their ability to make payments, adjustments to the allowance may be required.

47

Earnings per Share

The following is a reconciliation from basic to diluted earnings per share from continuing operations of
Schlumberger for each of the last three years:

(Stated in millions, except per share amounts)

Schlumberger
Income from
Continuing
Operations

Average
Shares
Outstanding

Earnings per
Share from
Continuing
Operations

2015:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2,072

1,267

$

1.63

Assumed exercise of stock options . . . . . . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-
-

4
4

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2,072

1,275

$

1.63

2014:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

5,643

1,295

$

4.36

Assumed exercise of stock options . . . . . . . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-
-

9
4

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

5,643

1,308

$

4.31

2013:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

6,801

1,323

$

5.14

Assumed exercise of stock options . . . . . . . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-
-

6
4

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

6,801

1,333

$

5.10

Employee stock options to purchase 20 million, 5 million and 12 million shares of common stock at
December 31, 2015, 2014 and 2013, respectively, were outstanding but not included in the computation of
diluted earnings per share because the option exercise price was greater than the average market price of the
common stock, and therefore the effect on diluted earnings per share would have been anti-dilutive.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
2014-09, Revenue from Contracts with Customers. This ASU amends the existing accounting standards for
revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of
goods or services to a customer at an amount that reflects the consideration a company expects to receive in
exchange for those goods or services. Schlumberger is required to adopt this ASU on January 1, 2018, with early
adoption permitted on January 1, 2017, and does not expect this ASU to have a material impact on its
consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which
amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as
non-current on the balance sheet. Schlumberger is required to adopt this ASU no later than January 1, 2018, with
early adoption permitted, and the guidance may be applied either prospectively or retrospectively. Schlumberger
does not expect this ASU to have a material impact on its consolidated financial statements.

48

3. Charges and Credits

Schlumberger recorded the following charges and credits in continuing operations during 2015, 2014 and 2013:

2015

(cid:129)

Schlumberger decided to reduce its headcount during the first quarter of 2015 as a result of the severe
fall in activity in North America, combined with the impact of lower international activity due to
customer budget cuts driven by lower oil prices. Schlumberger recorded a $390 million charge during
the first quarter associated with this headcount reduction as well as an incentivized leave of absence
program. Based on the activity outlook for 2016, as well as to further streamline its support structure,
Schlumberger decided to further reduce its headcount and expand its incentivized leave of absence
program during the fourth quarter of 2015. Schlumberger recorded an additional $530 million charge
during the fourth quarter associated with these actions. Approximately $360 million of the costs
remained unpaid as of December 31, 2015.

(cid:129)

As a result of unfavorable oil and gas industry market conditions that have continued to deteriorate and
their impact on the activity outlook, Schlumberger determined that the carrying values of certain assets
were no longer recoverable and also took certain decisions that resulted in the following impairment and
restructuring charges during the fourth quarter of 2015:

-

-
-

-

-

-
-

$776 million of fixed asset impairments primarily related to underutilized pressure pumping and
other equipment in North America, as well as certain lower-tier drilling rigs. The fair value of these
assets was based on the projected present value of future cash flows that these assets are expected to
generate.
$269 million to write-down the carrying value of certain inventory, primarily in North America.
$182 million to reduce the carrying value of an investment in an SPM project to its estimated fair
value, as a result of the recent decline in commodity prices and considering this project is
approaching the end of its contractual term. The fair value of this investment was estimated based
on the projected present value of its future cash flows.
$177 million associated with certain of Schlumberger’s owned and leased facilities, including the
expected sale of certain properties and the termination of certain leases.
$77 million relating to assets that are no longer recoverable as a result of geopolitical issues in
certain countries in the Middle East.
$41 million relating to contract termination costs.
$84 million of other charges associated with current market conditions, including $40 million
relating to an other-than-temporary impairment of marketable securities and $15 million relating to
the impairment of an equity-method investment.

Because certain of these impairment charges were estimated based on the projected present value of
future cash flows, which included unobservable inputs that required significant judgments, additional
charges may be required in future periods should industry conditions worsen.

(cid:129)

In February 2015, the Venezuelan government replaced the SICAD II exchange rate (described in
further detail below) with a new foreign exchange market system known as SIMADI. The SIMADI
exchange rate was approximately 192 Venezuelan Bolivares fuertes to the US dollar as of March 31,
2015. As a result, Schlumberger recorded a $49 million devaluation charge during the first quarter of
2015, reflecting the adoption of the SIMADI exchange rate.

This change results in a reduction in the US dollar reported amount of local currency denominated
revenues, expenses and, consequently,
If
Schlumberger had applied an exchange rate of 192 Venezuelan Bolivares fuertes to the US dollar
throughout 2014, it would have reduced Schlumberger earnings by approximately $0.09 per share.

income before taxes and net

income in Venezuela.

49

The following is a summary of these charges and credits, all of which were classified as Impairments & other in
the Consolidated Statement of Income:

(Stated in millions)

Pretax

Tax

Net

Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fixed asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of SPM project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Facility closures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geopolitical events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency devaluation loss in Venezuela . . . . . . . . . . . . . . . . . . . . . . . . .
Contract termination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

920
776
269
182
177
77
49
41
84

$

107
141
27
36
37
-
-
2
7

813
635
242
146
140
77
49
39
77

$

2,575

$

357

$

2,218

2014

(cid:129)

(cid:129)

(cid:129)

Due to the expectation of lower exploration spending as a result of lower commodity prices, during the
fourth quarter of 2014, Schlumberger decided to restructure its WesternGeco marine seismic fleet in
order to lower its operating costs. Three previous-generation acquisition vessels with lower towing
capacity and higher operating costs will be converted to source vessels, allowing for the termination of
two third-party source vessel leases and the retirement of two owned source vessels.

As a result of this restructuring, Schlumberger performed an impairment test and determined that the
carrying values of certain of its vessels exceeded their respective fair values by $590 million. This
impairment charge relates to the six Explorer-class vessels that were acquired at a premium in the 2007
purchase of Eastern Echo Holdings Plc. The fair value of these vessels was estimated primarily based on
the replacement cost method, which was largely based on unobservable inputs that required significant
judgments.

In addition to the $590 million impairment charge relating to these six vessels, Schlumberger also
recorded an $85 million impairment charge relating to a seismic intangible asset and $131 million of
other charges primarily related to lease termination costs and other seismic assets as a result of the
restructuring. Schlumberger did not incur any significant cash expenditures as a result of these charges.

During 2014, Venezuela enacted certain changes to its foreign exchange system such that, in addition to
the official rate of 6.3 Venezuelan Bolivares fuertes per US dollar, there were two other legal exchange
rates that could be obtained via different exchange rate mechanisms at the time. These changes included
the expansion of what was known as the SICAD I auction rate and the introduction of the SICAD II
auction process. The SICAD I and SICAD II exchange rates were approximately 11 and 50 Venezuelan
Bolivares fuertes to the US dollar, respectively, at December 31, 2014.

Schlumberger had historically applied the official exchange rate to remeasure local currency
transactions and balances into US dollars. Effective December 31, 2014, Schlumberger concluded that it
was appropriate to apply the SICAD II exchange rate as it believed that rate best represented the
economics of Schlumberger’s business activity in Venezuela. As a result, Schlumberger recorded a $472
million devaluation charge during the fourth quarter of 2014.

In response to lower commodity pricing and anticipated lower exploration and production spending in
2015, Schlumberger decided during the fourth quarter of 2014 to reduce its overall headcount primarily
to better align with anticipated activity levels for 2015. As a result of these reductions, Schlumberger
recorded a charge of $296 million in the fourth quarter of 2014.

50

(cid:129)

During the fourth quarter of 2014, Schlumberger determined that, primarily as a result of the recent
decline in commodity prices, the carrying value of its investment in an SPM development project in the
Eagle Ford Shale was in excess of its fair value. Accordingly, Schlumberger recorded a $199 million
impairment charge. The fair value of this investment was estimated based on the projected present value
of future cash flows.

The following is a summary of these charges, all of which were classified as Impairments & other in the
Consolidated Statement of Income:

(Stated in millions)

Pretax

Tax

Net

WesternGeco restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Currency devaluation loss in Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . .
Workforce reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of SPM project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

806
472
296
199

$

25
-
37
72

781
472
259
127

$

1,773

$

134

$

1,639

2013

(cid:129)

(cid:129)

(cid:129)

(cid:129)

During the fourth quarter, Schlumberger recorded a $152 million provision relating to accounts
receivable from a client in Brazil that filed for bankruptcy, which is classified in Cost of revenue in the
Consolidated Statement of Income.

During the second quarter, Schlumberger
the
deconsolidation of its subsea business in connection with the formation of the OneSubsea joint venture
with Cameron, which is classified as Gain on formation of OneSubsea in the Consolidated Statement of
Income. Refer to Note 4 – Acquisitions for further details.

recorded a $1.028 billion gain as a result of

During the second quarter, Schlumberger recorded a $222 million impairment charge relating to an
investment
in a company involved in developing drilling-related technology and a $142 million
impairment charge relating to an investment in a contract drilling business, both of which are classified
in Impairments & other in the Consolidated Statement of Income.

In February 2013, Venezuela’s currency was devalued from the prior exchange rate of 4.3 Bolivar
fuertes per US dollar to 6.3 Bolivar fuertes per US dollar. As a result, Schlumberger recorded a $92
million devaluation charge during the first quarter of 2013, which is classified in Impairments & other
in the Consolidated Statement of Income.

The following is a summary of these charges and credits:

Gain on formation of OneSubsea joint venture . . . . . . . . . . . . . . . . . . . . . $
Impairment of equity method investments . . . . . . . . . . . . . . . . . . . . . . . .
Provision for accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency devaluation loss in Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,028) $
364
152
92

$

(420) $

Pretax

Tax

(Stated in millions)

$

Net
(1,028)
345
122
92

$

(469)

-
19
30
-

49

4. Acquisitions

Formation of OneSubsea Joint Venture

On June 30, 2013, Schlumberger and Cameron completed the formation of OneSubsea, a joint venture to
manufacture and develop products, systems and services for the subsea oil and gas market. Schlumberger and

51

Cameron each contributed all of their respective subsea businesses to the joint venture and Schlumberger made a
$600 million cash payment to Cameron. Schlumberger owns 40% of OneSubsea and accounts for this investment
under the equity method. Schlumberger recognized a pretax and after-tax gain of $1.028 billion, which is
classified as Gain on formation of OneSubsea in the Consolidated Statement of Income, as a result of the
deconsolidation of its subsea business. This gain is equal to the difference between the fair value of the
Schlumberger subsea business, which was determined based on the present value of its estimated future cash
flows, and its carrying value at the time of closing.

Other

Schlumberger made other acquisitions and investments for cash payments, net of cash acquired, of $443 million
during 2015, $1.008 billion during 2014, and $610 million during 2013. Additionally, during 2014 Schlumberger
issued 2.1 million shares of its common stock, valued at $213 million, in connection with an acquisition. None of
these transactions were significant to Schlumberger’s consolidated financial statements, either individually or in
the aggregate.

5. Inventories

A summary of inventories, which are stated at the lower of average cost or market follows:

Raw materials & field materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2,300
178
1,278

$

3,756

$

2,666
273
1,689

4,628

(Stated in millions)

2015

2014

6. Fixed Assets

A summary of fixed assets follows:

(Stated in millions)

2015

2014

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Buildings & improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery & equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seismic vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

425
3,960
31,885
850

37,120
23,705

$

13,415

$

445
3,733
31,937
849

36,964
21,568

15,396

The estimated useful lives of Buildings & improvements are primarily 25 to 30 years. The estimated useful lives
of Machinery & equipment are primarily 5 to 10 years. Seismic vessels are depreciated over periods ranging
from 20 to 30 years.

Depreciation expense, which is recorded on a straight-line basis, was $3.2 billion, $3.2 billion and $3.1 billion in
2015, 2014 and 2013, respectively.

52

7. Multiclient Seismic Data

The change in the carrying amount of multiclient seismic data is as follows:

(Stated in millions)

2015

2014

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Capitalized in period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charged to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

793
486
(253)

$

1,026

$

667
321
(195)

793

8. Goodwill

The changes in the carrying amount of goodwill by reporting unit were as follows:

Reservoir
Characterization

Drilling

Production

Total

(Stated in millions)

Balance, January 1, 2014 . . . . . . . . . . . . . . . . $
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . .
Reallocation . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of changes in exchange rates . . . . . . .

Balance, December 31, 2014 . . . . . . . . . . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of changes in exchange rates . . . . . . .

$

3,737
15
83
(23)

3,812
38
(52)

$

8,315
271
(83)
(15)

8,488
130
(34)

$

2,654
551
-
(18)

3,187
76
(40)

14,706
837
-
(56)

15,487
244
(126)

Balance, December 31, 2015 . . . . . . . . . . . . . $

3,798

$

8,584

$

3,223

$

15,605

9. Intangible Assets

A summary of intangible assets follows:

2015

2014

Gross
Book Value

Accumulated
Amortization

Net Book
Value

Gross
Book Value

Accumulated
Amortization

Net Book
Value

(Stated in millions)

Customer Relationships . . $
Technology/Technical

Know-How . . . . . . . . . . .
Tradenames . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . .

2,489 $

645 $

1,844

1,864
1,625
513

653
367
257

1,211
1,258
256

2,531

1,747
1,641
380

$

6,491 $

1,922 $

4,569 $

6,299 $

1,645 $

523 $

2,008

535
319
268

1,212
1,322
112

4,654

Customer relationships are generally amortized over periods ranging from 18 to 28 years, technology\technical
know-how are generally amortized over periods ranging from 10 to 18 years, and tradenames are generally
amortized over periods ranging from 15 to 30 years.

53

Amortization expense was $354 million in 2015, $344 million in 2014 and $330 million in 2013.

Based on the carrying value of intangible assets at December 31, 2015, amortization expense for the subsequent
five years is estimated to be as follows: 2016: $373 million, 2017: $365 million, 2018: $357 million, 2019:
$341 million and 2020: $319 million.

10. Long-term Debt and Debt Facility Agreements

Long-term Debt consists of the following:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

4.00% Senior Notes due 2025 (1)
3.30% Senior Notes due 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.00% Senior Notes due 2020 (1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.65% Senior Notes due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.35% Senior Notes due 2018 (1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.20% Senior Notes due 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.25% Senior Notes due 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.40% Senior Notes due 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.63% Senior Notes due 2022 (1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.50% Guaranteed Notes due 2019 (2)
1.90% Senior Notes due 2017 (1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.95% Senior Notes due 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.65% Senior Notes due 2016 (3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Stated in millions)

2015

2014

$

1,741
1,597
1,591
1,496
1,297
1,100
1,000
999
845
566
499
-
-
1,000
711

-
1,597
-
1,495
-
1,100
1,000
999
-
628
-
1,100
500
1,538
608

$

14,442

$

10,565

(1)

If the closing of the Cameron merger does not occur on or prior to August 25, 2016 (which may be extended to
November 25, 2016 under certain circumstances) or if the Cameron merger agreement is terminated at any time prior
thereto, these notes will be subject to a special mandatory redemption. The special mandatory redemption price will be
equal to 101% of the aggregate principal amount of the notes that are redeemed, plus accrued and unpaid interest.

(2) Schlumberger maintains a €5.0 billion Guaranteed Euro Medium Term Note program that provides for the issuance of
various types of debt instruments such as fixed or floating rate notes in euro, US dollar or other currencies. Schlumberger
issued €0.5 billion 1.50% Guaranteed Notes due 2019 under this program in the fourth quarter of 2013. Schlumberger
entered into agreements to swap these euro notes for US dollars on the date of issue until maturity, effectively making this
a US dollar denominated debt on which Schlumberger will pay interest in US dollars at a rate equal to three-month LIBOR
plus approximately 64 basis points.

(3) Schlumberger entered into agreements to swap these dollar notes for euros on the date of issue until maturity, effectively

making this a euro-denominated debt on which Schlumberger pays interest at a rate of 2.39%.

Schlumberger Limited fully and unconditionally guarantees the securities issued by certain of its subsidiaries,
including securities
Investment SA, a wholly-owned finance subsidiary of
Schlumberger.

issued by Schlumberger

At December 31, 2015, Schlumberger had separate committed debt facility agreements aggregating $3.8 billion
with commercial banks, of which $1.4 billion was available and unused. This included $3.5 billion of committed

54

facilities which support commercial paper programs in the United States and Europe, of which $250 million
matures in July 2016, $1.75 billion matures in July 2018, and $1.5 billion matures in November 2018. Interest
rates and other terms of borrowing under these lines of credit vary from country to country.

Commercial paper borrowings are classified as long-term debt to the extent of their backup by available and
unused committed credit facilities maturing in more than one year and to the extent it is Schlumberger’s intent to
maintain these obligations for longer than one year. Borrowings under the commercial paper program at
December 31, 2015 were $2.4 billion, of which $1.0 billion was classified within Long-term debt and $1.4 billion
was classified in Long-term debt – current portion in the Consolidated Balance Sheet. At December 31, 2014,
borrowings under the commercial paper program were $1.5 million, all of which were classified within Long-
term debt in the Consolidated Balance Sheet.

The weighted average interest rate on variable rate debt as of December 31, 2015 was 1.0%.

Long-term Debt as of December 31, 2015, is due as follows: $1.5 billion in 2017, $2.6 billion in 2018, $0.9
billion in 2019, $1.6 billion in 2020, $2.7 billion in 2021, $1.9 billion in 2022, $1.5 billion in 2023 and $1.7
billion in 2025.

The fair value of Schlumberger’s Long-term Debt at December 31, 2015 and December 31, 2014 was $14.4
billion and $10.7 billion, respectively, and was estimated based on quoted market prices.

11. Derivative Instruments and Hedging Activities

Schlumberger is exposed to market risks related to fluctuations in interest rates and foreign currency exchange
rates. To mitigate these risks, Schlumberger utilizes derivative instruments. Schlumberger does not enter into
derivative transactions for speculative purposes.

Interest Rate Risk

Schlumberger is subject to interest rate risk on its debt and its investment portfolio. Schlumberger maintains an
interest rate risk management strategy that uses a mix of variable and fixed rate debt combined with its
investment portfolio and occasionally interest rate swaps to mitigate the exposure to changes in interest rates.

During the fourth quarter of 2013, Schlumberger entered into a cross currency swap for a notional amount of
€0.5 billion in order to hedge changes in the fair value of Schlumberger’s €0.5 billion 1.50% Guaranteed Notes
due 2019. Under the terms of this swap, Schlumberger will receive interest at a fixed rate of 1.50% on the euro
notional amount and pay interest at a floating rate of three-month LIBOR plus approximately 64 basis points on
the US dollar notional amount.

This cross currency swap is designated as a fair value hedge of the underlying debt. This derivative instrument is
marked to market with gains and losses recognized currently in income to largely offset the respective gains and
losses recognized on changes in the fair value of the hedged debt.

At December 31, 2015, Schlumberger had fixed rate debt aggregating $13.8 billion and variable rate debt
aggregating $5.2 billion, after taking into account the effect of the swap.

Short-term investments and Fixed income investments, held to maturity, totaled $10.7 billion at December 31,
2015. The carrying value of these investments approximated fair value, which was estimated using quoted market
prices for those or similar investments.

55

Foreign Currency Exchange Rate Risk

As a multinational company, Schlumberger conducts its business in approximately 85 countries. Schlumberger’s
functional currency is primarily the US dollar. Approximately 83% of Schlumberger’s revenues in 2015 was
denominated in US dollars. However, outside the United States, a significant portion of Schlumberger’s expenses
is incurred in foreign currencies. Therefore, when the US dollar weakens (strengthens) in relation to the foreign
currencies of the countries in which Schlumberger conducts business, the US dollar–reported expenses will
increase (decrease).

Schlumberger is exposed to risks on future cash flows to the extent that the local currency is not the functional
currency and expenses denominated in local currency are not equal to revenues denominated in local currency.
Schlumberger is also exposed to risks on future cash flows relating to certain of its fixed rate debt which is
denominated in currencies other than the functional currency. Schlumberger uses foreign currency forward
contracts and foreign currency options to provide a hedge against a portion of these cash flow risks. These
contracts are accounted for as cash flow hedges, with the effective portion of changes in the fair value of the
hedge recorded on the Consolidated Balance Sheet and in Accumulated Other Comprehensive Loss. Amounts
recorded in Accumulated Other Comprehensive Loss are reclassified into earnings in the same period or periods
that the hedged item is recognized in earnings. The ineffective portion of changes in the fair value of hedging
instruments, if any, is recorded directly to earnings.

At December 31, 2015, Schlumberger recognized a cumulative net $39 million loss in Accumulated other
comprehensive loss relating to revaluation of foreign currency forward contracts and foreign currency options
designated as cash flow hedges, the majority of which is expected to be reclassified into earnings within the next
12 months.

Schlumberger is exposed to changes in the fair value of assets and liabilities which are denominated in currencies
other than the functional currency. While Schlumberger uses foreign currency forward contracts and foreign
currency options to economically hedge this exposure as it relates to certain currencies, these contracts are not
designated as hedges for accounting purposes. Instead the fair value of the contracts are recorded on the
Consolidated Balance Sheet and changes in the fair value are recognized in the Consolidated Statement of
Income as are changes in fair value of the hedged item. Transaction losses of $27 million, $67 million and $24
million, net of related hedging activities, were recognized in the Consolidated Statement of Income in 2015, 2014
and 2013, respectively.

At December 31, 2015, contracts were outstanding for the US dollar equivalent of $3.8 billion in various foreign
currencies, of which $1.2 billion relates to hedges of debt denominated in currencies other than the functional
currency.

56

The fair values of outstanding derivative instruments are summarized as follows:

(Stated in millions)

Fair Value of Derivatives

Consolidated Balance Sheet Classification

2015

2014

Derivative Assets
Derivatives designated as hedges:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . .

Derivatives not designated as hedges:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . .

Derivative Liabilities
Derivatives designated as hedges:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . .

Cross currency swap . . . . . . . . . . . . . . . . . . . . . . . . .

Derivatives not designated as hedges:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . .

$

$

$

$

$

$

$

$

4
6

10

15

25

$

$

$

$

3 Other current assets
32 Other Assets

35

5 Other current assets

40

37

$

80 Accounts payable and accrued liabilities

3
22

62

25

87

$

$

$

Other Liabilities

105
42 Other Liabilities

227

28 Accounts payable and accrued liabilities

255

The fair value of all outstanding derivatives is determined using a model with inputs that are observable in the market or can
be derived from or corroborated by observable data.

The effect of derivative instruments designated as fair value hedges and those not designated as hedges on the Consolidated
Statement of Income was as follows:

(Stated in millions)

Gain (Loss) Recognized in Income

2015

2014

2013

Consolidated Statement
of Income Classification

Derivatives designated as fair value hedges:
Cross currency swap . . . . . . . . . . . . . . . . . . .

Derivatives not designated as hedges:
Foreign exchange contracts . . . . . . . . . . . . . .

$

$

12. Stockholders’ Equity

(64) $

(82) $

15

Interest expense

(154) $

(95) $

(2) Cost of revenue

Schlumberger is authorized to issue 4,500,000,000 shares of common stock, par value $0.01 per share, of which
1,256,367,980 and 1,275,312,404 shares were outstanding on December 31, 2015 and 2014, respectively. Holders of
common stock are entitled to one vote for each share of stock held. Schlumberger is also authorized to issue 200,000,000
shares of preferred stock, par value $0.01 per share, which may be issued in series with terms and conditions determined by
the Board of Directors. No shares of preferred stock have been issued.

57

Accumulated Other Comprehensive Loss consists of the following:

Currency
Translation
Adjustments

Unrealized
Gain/(Loss) on
Marketable
Securities

Pension and
Other
Postretirement
Benefit Plans

Cash Flow
Hedges

Total

(Stated in millions)

Balance, January 1, 2013 . . . . . . . . . . $

(917) $

141 $

30 $

(3,142) $

(3,888)

Other comprehensive income
(loss) before reclassifications . . . .
Amounts reclassified from
accumulated other comprehensive
loss . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . .

Balance, December 31, 2013 . . . . . . .
Other comprehensive income
(loss) before reclassifications . . . .
Amounts reclassified from
accumulated other comprehensive
loss . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . .

Balance, December 31, 2014 . . . . . . .
Other comprehensive income
(loss) before reclassifications . . . .
Amounts reclassified from
accumulated other comprehensive
loss . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . .

(151)

-
-

(1,068)

35

-
-

176

49

1,328

1,261

(50)
-

29

425
(302)

375
(302)

(1,691)

(2,554)

(463)

(166)

(238)

(1,285)

(2,152)

-
-

(1,531)

-
-

10

113

305
82

418
82

(96)

(2,589)

(4,206)

(522)

(50)

(178)

(210)

(960)

-
-

40
-

235
-

407
(74)

682
(74)

Balance, December 31, 2015 . . . . . . . $

(2,053) $

- $

(39) $

(2,466) $

(4,558)

Other comprehensive loss was $352 million in 2015 and $1.652 billion in 2014. Other comprehensive income was
$1.334 billion in 2013.

13. Stock-based Compensation Plans

Schlumberger has three types of stock-based compensation programs: (i) stock options, (ii) a restricted stock, restricted
stock unit and performance share unit program (collectively referred to as “restricted stock”) and (iii) a discounted
stock purchase plan (“DSPP”).

Stock Options

Key employees are granted stock options under Schlumberger stock option plans. For all stock options granted, the
exercise price equals the average of the high and low sales prices of Schlumberger stock on the date of grant; the
maximum term is ten years, and the options generally vest in increments over five years.

58

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-
pricing model with the following weighted-average assumptions and resulting weighted-average fair value per
share:

Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected option life in years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average fair value per share . . . . . . . . . . . . . . . . . . . . . . . $

2.3%
36%
1.7%
7.0
25.96

$

1.6%
37%
2.2%
7.0
34.20

$

1.7%
38%
1.2%
7.0
23.93

2015

2014

2013

The following table summarizes information concerning options outstanding and options exercisable as of
December 31, 2015:

(Shares stated in thousands)

Options Outstanding

Options Exercisable

Weighted-
average
remaining
contractual life
(in years)

Weighted-
average
exercise price

Options
Exercisable

Weighted-
average
exercise price

2.5
5.6
7.0
4.4
8.0

6.1

$
$
$
$
$

$

51.61
69.81
73.56
84.17
95.48

78.73

4,857
4,873
3,206
6,514
2,920

22,370

$
$
$
$
$

$

51.53
69.26
72.51
84.21
96.55

73.79

Exercise prices range

$37.85 - $67.87 . . . . . . . . . . . . . . . .
$68.51 - $70.93 . . . . . . . . . . . . . . . .
$72.11 - $78.31 . . . . . . . . . . . . . . . .
$83.88 - $84.93 . . . . . . . . . . . . . . . .
$88.61 - $114.83 . . . . . . . . . . . . . . .

Options
Outstanding

4,882
7,499
8,927
7,585
12,194

41,087

The weighted average remaining contractual life of stock options exercisable as of December 31, 2015 was 4.4
years.

The following table summarizes stock option activity during the years ended December 31, 2015, 2014 and 2013:

(Shares stated in thousands)

2015

2014

2013

Weighted-
average
exercise
price

Weighted-
average
exercise
price

Shares

Weighted-
average
exercise
price

Shares

Shares

Outstanding at beginning of year
. . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . .

$
38,583
7,118
$
(2,561) $
(2,053) $

76.10
86.86
60.10
80.34

$
41,939
6,105
$
(8,269) $
(1,192) $

70.33
99.04
64.19
73.56

$
42,059
6,570
$
(5,168) $
(1,522) $

67.77
72.16
51.73
70.57

Outstanding at year-end . . . . . . . . . . . . . . .

41,087

$

78.73

38,583

$

76.10

41,939

$

70.33

The aggregate intrinsic value of both stock options outstanding and stock options exercisable as of December 31,
2015 was $93 million, respectively.

59

The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $62
million, $314 million and $176 million, respectively.

Restricted Stock

Schlumberger grants performance share units to certain executives. The number of shares earned is determined at
the end of each performance period, which is generally three years, based on Schlumberger’s achievement of a
predefined return on capital employed (“ROCE”), as defined in the underlying performance share unit
agreement. In the event the ROCE exceeds the predefined target, shares for up to the maximum of 250% of the
target award may be granted. In the event the ROCE falls below the predefined target, a reduced number of
shares may be granted. If the ROCE falls below the threshold award performance level, no shares will be granted.
As of December 31, 2015, performance share units of 0.9 million were outstanding based on the achievement of
100% of target.

All other restricted stock awards generally vest at the end of three years.

Restricted stock awards do not pay dividends or allow voting rights during the performance period. Accordingly,
the fair value of the restricted stock award is the quoted market price of Schlumberger’s stock on the date of
grant less the present value of the expected dividends not received during the vesting period.

The following table summarizes information about all restricted stock transactions:

(Shares stated in thousands)

2015

2014

2013

Weighted
Average
Grant Date
Fair Value

Restricted
Stock

Weighted
Average
Grant Date
Fair Value

Restricted
Stock

Weighted
Average
Grant Date
Fair Value

Restricted
Stock

Unvested at beginning of

year . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . .

$
4,138
1,254
$
(1,495) $
(326) $

Unvested at year-end . . . . . . . . .

3,571

$

80.80
82.37
71.30
83.86

85.04

$
4,171
1,341
$
(1,186) $
(188) $

76.01
96.08
81.59
78.68

$
3,566
1,949
$
(958) $
(386) $

73.62
75.65
66.98
74.53

4,138

$

80.80

4,171

$

76.01

Discounted Stock Purchase Plan

Under the terms of the DSPP, employees can choose to have a portion of their earnings withheld, subject to
certain restrictions, to purchase Schlumberger common stock. The purchase price of the stock is 92.5% of the
lower of the stock price at the beginning or end of the plan period at six-month intervals.

The fair value of the employees’ purchase rights under the DSPP was estimated using the Black-Scholes model
with the following assumptions and resulting weighted average fair value per share:

Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average fair value per share . . . . . . . . . . . . . . . . . . . . . . .

2.3%
27%
0.2%

1.6%
19%
0.1%

$

12.45

$

12.67

$

1.7%
24%
0.1%
9.91

2015

2014

2013

60

Total Stock-based Compensation Expense

The following summarizes stock-based compensation expense recognized in income:

(Stated in millions)

2015

2014

2013

Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DSPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

176
107
43

$

177
114
38

$

326

$

329

$

165
110
40

315

At December 31, 2015, there was $480 million of total unrecognized compensation cost related to nonvested
stock-based compensation arrangements, of which $215 million is expected to be recognized in 2016, $137
million in 2017, $80 million in 2018, $40 million in 2019 and $8 million in 2020.

As of December 31, 2015, approximately 27 million shares of Schlumberger common stock were available for
future grants under Schlumberger’s stock-based compensation programs.

14. Income Taxes

Schlumberger operates in more than 100 tax jurisdictions, where statutory tax rates generally vary from 0% to
40%.

Income from continuing operations before taxes subject to United States and non-United States income taxes for
each of the three years ended December 31, were as follows:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Outside United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

(Stated in millions)

2015

2014

2013

(691) $
3,572

2,881

$

1,990
5,649

7,639

$

$

1,904
6,787

8,691

Schlumberger recorded pretax charges of $2.575 billion in 2015 ($883 million in the US and $1.692 billion
outside of the US). Schlumberger recorded pretax charges of $1.773 billion in 2014 ($289 million in the US and
$1.484 billion outside the US) and net pretax credits of $420 million in 2013 ($53 million of charges in the US
and $473 million of net credits outside the US). These charges and credits are included in the table above and are
more fully described in Note 3 – Charges and Credits.

The components of net deferred tax assets (liabilities) were as follows:

(Stated in millions)

2015

2014

Postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in non-US subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net

$

266
(1,418)
(152)
(176)
159
454

$

(867) $

327
(1,435)
(227)
(331)
112
402

(1,152)

61

The above deferred tax balances at December 31, 2015 and 2014 were net of valuation allowances relating to net
operating losses in certain countries of $162 million and $190 million, respectively. Schlumberger generally does
not provide income taxes relating to undistributed earnings, as the earnings either would not be taxable when
remitted or are considered to be indefinitely reinvested.

The components of Taxes on income were as follows:

Current:
United States-Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
United States-State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred:
United States-Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
United States-State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Stated in millions)

2015

2014

2013

$

90
12
1,085

1,187

(356) $
(19)
(52)
(14)

(441)

$

718
51
1,380

2,149

(194) $
(9)
(12)
(6)

(221)

682
60
1,211

1,953

(109)
(4)
34
(26)

(105)

$

746

$

1,928

$

1,848

A reconciliation of the United States statutory federal tax rate (35%) to the consolidated effective tax rate
follows:

US federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-US income taxed at different rates . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Charges and credits (See Note 3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

2015

2014

2013

35%
(13)
6
(2)

26%

35%
(11)
3
(2)

25%

35%
(12)
(2)
-

21%

A number of the jurisdictions in which Schlumberger operates have tax laws that are not fully defined and are
evolving. Schlumberger’s tax filings are subject to regular audit by the tax authorities. These audits may result in
assessments for additional taxes which are resolved with the authorities or, potentially, through the courts. Tax
liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits.
Due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in
liabilities which could be materially different from these estimates.

62

A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the years ended
December 31, 2015, 2014 and 2013 is as follows:

2015

2014

2013

(Stated in millions)

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additions based on tax positions related to the current year . . . . . . . . . . . . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions related to acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements with tax authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to the lapse of the applicable statute of limitations . . . . . . . .

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,402 $
140
136
5
(78)
(99)
(203)
(18)

1,285 $

$

1,452
154
96
43
(62)
(27)
(212)
(42)

1,402

$

1,453
146
109
-
(47)
(64)
(109)
(36)

1,452

The amounts above exclude accrued interest and penalties of $176 million, $243 million and $253 million at December 31,
2015, 2014 and 2013, respectively. Schlumberger classifies interest and penalties relating to uncertain tax positions within
Taxes on income in the Consolidated Statement of Income.

The following table summarizes the tax years that are either currently under audit or remain open and subject to examination
by the tax authorities in the most significant jurisdictions in which Schlumberger operates:

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2010 - 2015
2008 - 2015
2012 - 2015
2007 - 2015
2013 - 2015
2013 - 2015
2001 - 2015
2011 - 2015
2014 - 2015

In certain of the jurisdictions noted above, Schlumberger operates through more than one legal entity, each of which may
have different open years subject to examination. The table above presents the open years subject to examination for the most
material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically not closed
until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of limitations can
extend beyond the open years subject to examination.

15. Leases and Lease Commitments

Total rental expense was $1.6 billion in 2015, $2.1 billion in 2014, and $1.9 billion in 2013.

Future minimum rental commitments under noncancelable operating leases for each of the next five years are as follows:

2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

261
205
162
145
129
526

(Stated in millions)

$

1,428

63

16. Contingencies

Schlumberger and its subsidiaries are party to various legal proceedings from time to time. A liability is accrued
when a loss is both probable and can be reasonably estimated. Management believes that the probability of a
material loss with respect to any pending legal proceeding is remote. However, litigation is inherently uncertain
and it is not possible to predict the disposition of any of these proceedings.

17. Segment Information

Schlumberger’s segments are as follows:

(cid:129)

(cid:129)

(cid:129)

Reservoir Characterization Group – Consists of the principal Technologies involved in finding and
defining hydrocarbon resources. These include WesternGeco, Wireline, Testing Services, Software
Integrated Solutions and Integrated Services Management.

Drilling Group – Consists of the principal Technologies involved in the drilling and positioning of oil
and gas wells. These include Bits & Drilling Tools, M-I SWACO, Drilling & Measurements, Land Rigs
and Integrated Drilling Services.

Production Group – Consists of the principal Technologies involved in the lifetime production of oil
and gas reservoirs. These include Well Services, Completions, Artificial Lift, Well Intervention, Water
Services, Integrated Production Services and Schlumberger Production Management.

Financial information for the years ended December 31, 2015, 2014 and 2013, by segment, is as follows:

Income
before
taxes

Revenue

Reservoir Characterization . . . . . .
Drilling . . . . . . . . . . . . . . . . . . . . .
Production . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . .

$

$

9,501
13,563
12,548
(137)

Pretax operating income . . . . .
Goodwill and intangible assets . . .
All other assets . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . .
Interest income (2)
. . . . . . . . . . . . .
Interest expense (3) . . . . . . . . . . . . .
. . . . . . . . . . .
Charges & credits (4)

$

2,450
2,538
1,585
(63)

6,510

(768)
30
(316)
(2,575)

(Stated in millions)

2015

Depreciation
and

Capital

Assets

Amortization

Expenditures

$

8,266
8,535
9,937
2,067

$

1,279
1,177
1,216
213

649
672
825
264

20,174
2,262
16,764

193

$

35,475

$

2,881

$

68,005

$

4,078

$

2,410

64

Income
before
taxes

Revenue

Reservoir Characterization . . . . . . . .
Drilling . . . . . . . . . . . . . . . . . . . . . . .
Production . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . .

$

$

12,905
18,128
17,763
(216)

Pretax operating income . . . . . . .
Goodwill and intangible assets . . . . .
All other assets . . . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . . . .
Interest income (2)
. . . . . . . . . . . . . . .
Interest expense (3) . . . . . . . . . . . . . . .
. . . . . . . . . . . . .
Charges & credits (4)

$

3,708
3,805
3,193
(130)

10,576

(848)
31
(347)
(1,773)

(Stated in millions)

Depreciation
and

Amortization
1,459
$
1,173
1,066
198

Capital

Expenditures
1,207
$
1,328
1,192
249

198

2014

Assets

9,191
11,155
11,481
1,572

20,141
2,186
11,178

$

48,580

$

7,639

$

66,904

$

4,094

$

3,976

Revenue

Reservoir Characterization . . . . . . .
Drilling . . . . . . . . . . . . . . . . . . . . . .
Production . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . .

$

13,050
16,792
15,646
(222)

Pretax operating income . . . . . .
Goodwill and intangible assets . . . .
All other assets . . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . . .
. . . . . . . . . . . . . .
Interest income (2)
. . . . . . . . . . . . .
Interest expense (3)
Charges & credits (4) . . . . . . . . . . . .

2013

Assets

9,316
10,440
10,929
2,332

19,415
2,618
12,050

$

Income
before taxes
3,711
$
3,238
2,624
(229)

9,344

(726)
22
(369)
420

(Stated in millions)

Depreciation
and
Amortization
1,402
$
1,076
1,001
192

Capital
Expenditures
1,361
$
1,289
1,126
167

208

$

45,266

$

8,691

$

67,100

$

3,879

$

3,943

(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs,
amortization expense associated with certain intangible assets, certain centrally managed initiatives and other
nonoperating items. Corporate assets consist of cash, short-term investments, fixed income investments, held to maturity
and investments in affiliates.

(2)

(3)

Interest income excludes amounts which are included in the segments’ income (2015: $22 million; 2014: $20 million;
2013: $11 million).

Interest expense excludes amounts which are included in the segments’ income (2015: $30 million; 2014: $22 million;
2013: $22 million).

(4)

See Note 3 – Charges and Credits.

65

Segment assets consist of receivables, inventories, fixed assets, multiclient seismic data and SPM investments.

Depreciation and amortization includes depreciation of property, plant and equipment and amortization of
intangible assets, multiclient seismic data costs and SPM investments.

Revenue by geographic area for the years ended December 31, 2015, 2014 and 2013 is as follows:

(Stated in millions)

2015

2014

2013

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

9,811
6,014
9,284
9,898
468

$

16,151
7,699
12,515
11,875
340

$

35,475

$

48,580

$

13,897
7,754
12,411
10,767
437

45,266

Revenue is based on the location where services are provided.

During each of the three years ended December 31, 2015, 2014 and 2013, no single customer exceeded 10% of
consolidated revenue.

Schlumberger did not have revenue from third-party customers in its country of domicile during the last three
years. Revenue in the United States in 2015, 2014 and 2013 was $8.5 billion, $14.0 billion and $12.0 billion,
respectively.

Fixed Assets less accumulated depreciation by geographic area are as follows:

(Stated in millions)

2015

2014

2013

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

4,392
1,728
2,978
3,078
1,239

$

4,885
1,969
3,640
3,446
1,456

4,858
1,889
3,452
2,991
1,906

$

13,415

$

15,396

$

15,096

(1) Represents seismic vessels, including the related on-board equipment, which frequently transition between

geographic areas.

18. Pension and Other Benefit Plans

Pension Plans

Schlumberger sponsors several defined benefit pension plans that cover substantially all US employees hired
prior to October 1, 2004. The benefits are based on years of service and compensation, on a career-average pay
basis.

In addition to the United States defined benefit pension plans, Schlumberger sponsors several other international
defined benefit pension plans. The most significant of these international plans are the International Staff Pension
Plan and the UK pension plan (collectively, the “International plans”). The International Staff Pension Plan
covers certain international employees hired prior to July 1, 2014 and is based on years of service and

66

compensation on a career-average pay basis. The UK plan covers employees hired prior to April 1, 1999, and is
based on years of service and compensation, on a final salary basis.

The weighted-average assumed discount rate, compensation increases and the expected long-term rate of return
on plan assets used to determine the net pension cost for the US and International plans were as follows:

2015

US

2014

International

2013

2015

2014

2013

Discount rate . . . . . . . . . . . . . . . . . .
Compensation increases . . . . . . . . .
Return on plan assets . . . . . . . . . . . .

4.15%
4.00%
7.25%

4.85%
4.00%
7.25%

4.25%
4.00%
7.50%

4.07%
4.79%
7.50%

4.76%
4.80%
7.50%

4.38%
4.83%
7.50%

Net pension cost for 2015, 2014 and 2013 included the following components:

US

2014

2015

International

2013

2015

2014

2013

(Stated in millions)

Service cost - benefits earned during the

period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

86 $

72 $

80 $

167 $

126 $

127

Interest cost on projected benefit

obligation . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . .
Amortization of prior service cost . . . . . . . .
Amortization of net loss . . . . . . . . . . . . . . . .

170
(229)
12
123

164
(208)
12
82

150
(200)
12
122

297
(498)
121
170

288
(450)
120
94

$

162 $

122 $

164 $

257 $

178 $

253
(384)
117
155

268

The weighted-average assumed discount rate and compensation increases used to determine the projected benefit
obligations for the US and International plans were as follows:

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation increases . . . . . . . . . . . . . . . . . . . . . . .

4.50%
4.00%

4.15%
4.00%

4.36%
4.80%

4.07%
4.79%

US

International

2015

2014

2015

2014

67

The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:

(Stated in millions)

US

International

2015

2014

2015

2014

Change in Projected Benefit Obligations
. . . . .
Projected benefit obligation at beginning of year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contribution by plan participants . . . . . . . . . . . . . . . . . .
Actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . .
Currency effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

4,137
86
170
-
(205)
-
(163)

$

3,418
72
164
-
627
-
(144)

$

7,249
167
297
143
(203)
(66)
(247)

5,981
126
288
122
1,000
(90)
(178)

Projected benefit obligation at end of year

. . . . . . . . . .

$

4,025

$

4,137

$

7,340

$

7,249

Change in Plan Assets
Plan assets at fair value at beginning of year . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . .
Currency effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company contributions . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions by plan participants . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plan assets at fair value at end of year . . . . . . . . . . . . . .

Unfunded Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amounts Recognized in Balance Sheet
Postretirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . .
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amounts Recognized in Accumulated Other

Comprehensive Loss

Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost

Accumulated benefit obligation . . . . . . . . . . . . . . . . . . .

$

$

$

$

$

$

$

$

$

3,549
(1)
-
82
-
(163)

$

3,269
339
-
85
-
(144)

$

6,830
(4)
(69)
198
125
(248)

6,246
502
(102)
240
122
(178)

3,467

$

3,549

$

6,832

$

6,830

(558) $

(588) $

(508) $

(419)

(558) $
-

(588) $
-

(657) $
149

(558) $

(588) $

(508) $

(546)
127

(419)

1,008
54

1,062

3,763

$

$

$

1,104
66

1,170

3,805

$

$

$

335
-

335

6,913

$

$

$

1,658
357

2,015

6,793

The unfunded liability represents the difference between the plan assets and the projected benefit obligation
(“PBO”). The PBO represents the actuarial present value of benefits based on employee service and
compensation and includes an assumption about future compensation levels. The accumulated benefit obligation
represents the actuarial present value of benefits based on employee service and compensation, but does not
include an assumption about future compensation levels.

68

The weighted-average allocation of plan assets and the target allocations by asset category are as follows:

Equity securities . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . .
Alternative investments . . . . . . . . . . . . . . .

Target
37 - 56%
35 - 62
0 - 3
0 - 10

US

2015

International

2014

Target

2015

2014

52%
36
2
10

48% 45 - 71%
42
5
8

20 - 35
0 - 5
0 - 25

64%
27
2
7

58%
32
4
6

100%

100%

100%

100%

100%

100%

Asset performance is monitored frequently with an overall expectation that plan assets will meet or exceed the
weighted index of its target asset allocation and component benchmark over rolling five-year periods.

The expected long-term rate of return on assets assumptions reflect the average rate of earnings expected on
funds invested or to be invested. The assumptions have been determined based on expectations regarding future
rates of return for the portfolio considering the asset allocation and related historical rates of return. The
appropriateness of the assumptions is reviewed annually.

The fair value of Schlumberger’s pension plan assets at December 31, 2015 and 2014, by asset category, is
presented below and was determined based on valuation techniques categorized as follows:

(cid:129)

(cid:129)

(cid:129)

Level One: The use of quoted prices in active markets for identical instruments.

Level Two: The use of quoted prices for similar instruments in active markets or quoted prices for
identical or similar instruments in markets that are not active or other inputs that are observable in
the market or can be corroborated by observable market data.

Level Three: The use of significant unobservable inputs that
management’s estimates of assumptions that market participants would use in pricing.

typically require the use of

US Plan Assets

2015

2014

(Stated in millions)

Total

Level
One

Level
Two

Level
Three

Total

Level
One

Level
Two

Level
Three

Asset Category:
Cash and Cash

Equivalents . . . . . . . . . . . . . $

86

$

40

$

46

$

-

$

59

$

40

$

19

$

-

Equity Securities:

US (a) . . . . . . . . . . . . . . . . . .
International (b) . . . . . . . . . .

1,195
605

655
473

540
132

599

1,149
552

654

622
433

527
119

654

599

Debt Securities

Corporate bonds (c) . . . . . . .
Government and
government-related debt
securities (d) . . . . . . . . . . . . .
Collateralized mortgage
obligations and mortgage
backed securities (e)
Alternative Investments:

. . . . . .

Private equity (f)
Real estate (g)

. . . . . . . . .
. . . . . . . . . . .

589

159

430

735

175

560

65

65

203
125

107

107

210
83

$ 3,549

$ 1,270

$1,986

$

210
83

293

203
125

328

Total . . . . . . . . . . . . . . . . . . . . . $ 3,467

$ 1,327

$ 1,812

$

69

International Plan Assets

2015

2014

(Stated in millions)

Total

Level
One

Level
Two

Level
Three

Total

Level
One

Level
Two

Level
Three

Asset Category:
Cash and Cash Equivalents . . . $
Equity Securities:

138 $

115 $

23 $

- $

264 $

174 $

90 $

-

US (a)
. . . . . . . . . . . . . . . . . . .
International (b) . . . . . . . . . . . .

2,736
1,639

2,240
1,179

496
460

657

2,432
1,534

1,757
1,047

780

675
487

780

657

Debt Securities

Corporate bonds (c) . . . . . . . . .
Government and government-
related debt securities (d)
. . . .
Collateralized mortgage
obligations and mortgage
backed securities (e)
Alternative Investments:

. . . . . . . .

Private equity (f) . . . . . . . . . . .
. . . . . . . . . . . . .
Real estate (g)
. . . . . . . . . . . . . . . . . . .
Other

1,036

8

1,028

1,181

8

1,173

143

331
49
103

143

256

246
49
88

331
49
103

256

246
49
88

Total . . . . . . . . . . . . . . . . . . . . . . . $ 6,832 $ 3,542 $ 2,807 $

483 $ 6,830 $ 2,986 $ 3,461 $

383

(a)

(b)

(c)

(d)

(e)

(f)

(g)

US equities include companies that are well diversified by industry sector and equity style (i.e., growth and value
strategies). Active and passive management strategies are employed. Investments are primarily in large capitalization
stocks and, to a lesser extent, mid- and small-cap stocks.

International equities are invested in companies that are traded on exchanges outside the US and are well diversified by
industry sector, country and equity style. Active and passive strategies are employed. The vast majority of the
investments are made in companies in developed markets with a small percentage in emerging markets.

Corporate bonds consist primarily of investment grade bonds from diversified industries.

Government and government-related debt securities are comprised primarily of inflation-protected US treasuries and,
to a lesser extent, other government-related securities.

Collateralized mortgage obligations and mortgage backed-securities are debt obligations that represent claims to the
cash flows from pools of mortgage loans, which are purchased from banks, mortgage companies, and other originators
and then assembled into pools by governmental, quasi-governmental and private entities.

Private equity includes investments in several fund of funds limited partnerships.

Real estate primarily includes investments in real estate limited partnerships, concentrated in commercial real estate.

Schlumberger’s funding policy is to annually contribute amounts that are based upon a number of factors
including the actuarial accrued liability, amounts that are deductible for income tax purposes, legal funding
requirements and available cash flow. Schlumberger currently anticipates contributing approximately $350
million to its postretirement benefit plans in 2016, subject to market and business conditions.

70

Postretirement Benefits Other Than Pensions

Schlumberger provides certain healthcare benefits to certain former US employees who have retired. During the
fourth quarter of 2014 Schlumberger announced that, effective April 1, 2015, it will change the way it provides
healthcare coverage to certain retirees who are age 65 and over. Under the amended plan, these retirees
transferred to individual coverage under the Medicare Exchange. Schlumberger will subsidize the cost of the
program by providing these retirees with a Health Reimbursement Account. The annual subsidy may be
increased based on medical cost inflation, but it will not be increased more than 5% in any given year.

The actuarial assumptions used to determine the accumulated postretirement benefit obligation and net periodic
benefit cost for the US postretirement medical plan were as follows:

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . .
Return on plan assets . . . . . . . . . . . . . . . . . . .
Current medical cost trend rate . . . . . . . . . . .
Ultimate medical cost trend rate . . . . . . . . . .
Year that the rate reaches the ultimate trend

Benefit Obligations
At December 31,

Net Periodic Benefit
Cost for the year

2015

2014

2015

2014

2013

4.50%
-
7.00%
5.00%

4.15%
-
7.00%
5.00%

4.15%
7.00%
7.00%
5.00%

4.85%
7.00%
7.25%
5.00%

4.25%
7.00%
7.50%
5.00%

rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023

2023

2023

2023

2023

The net periodic benefit cost for the US postretirement medical plan included the following components:

(Stated in millions)

2015

2014

2013

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Service cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

42
48
(52)
(32)
13

$

43
60
(45)
(4)
1

$

19

$

55

$

48
56
(37)
(4)
23

86

71

The changes in the accumulated postretirement benefit obligation, plan assets and funded status were as follows:

(Stated in millions)

2015

2014

Change in Projected Benefit Obligations
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Service cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost
Contribution by plan participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

1,221
42
48
7
(168)
(47)
-

Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,103

$

Change in Plan Assets
Plan assets at fair value at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Company contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions by plan participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plan assets at fair value at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Unfunded Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Prior service cost

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

854
66
7
(47)
4

884

$

(219) $

$

106
(275)

(169) $

1,247
43
60
6
210
(46)
(299)

1,221

731
65
6
(46)
98

854

(367)

242
(307)

(65)

The unfunded liability is included in Postretirement Benefits in the Consolidated Balance Sheet.

The assets of the US postretirement medical plan are invested 60% in equity securities and 40% in debt securities
at December 31, 2015. The fair value of these assets was primarily determined based on Level Two valuation
techniques.

Assumed health care cost trend rates have a significant effect on the amounts reported for the US postretirement
medical plan. A one percentage point change in assumed health care cost trend rates would have the following
effects:

Effect on total service and interest cost components . . . . . . . . . . . . . . . . . . . .
Effect on accumulated postretirement benefit obligation . . . . . . . . . . . . . . . .

$
$

7
37

$
$

(6)
(33)

(Stated in millions)

One percentage
point increase

One percentage
point decrease

72

Other Information

The expected benefits to be paid under the US and International pension plans as well as the postretirement
medical plan were as follows:

(Stated in millions)

Pension Benefits

US

International

Postretirement
Medical Plan

2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2021-2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

176
183
189
197
205
1,152

$
$
$
$
$
$

242
259
278
294
310
1,781

$
$
$
$
$
$

50
53
57
60
62
341

Included in Accumulated other comprehensive loss at December 31, 2015 are non-cash pretax charges which
have not yet been recognized in net periodic benefit cost. The estimated portion of each component of
Accumulated other comprehensive loss which is expected to be recognized as a component of net periodic benefit
cost during the year ending December 31, 2016 is as follows:

(Stated in millions)

Postretirement
Medical Plan

Pension Plans

Net actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Prior service cost (credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

163
133

$
$

-
(32)

In addition to providing defined pension benefits and a postretirement medical plan, Schlumberger and its
subsidiaries have other deferred benefit programs, primarily profit sharing and defined contribution pension
plans. Expenses for these programs were $565 million, $749 million and $671 million in 2015, 2014 and 2013,
respectively.

19. Supplementary Information

Cash paid for interest and income taxes was as follows:

(Stated in millions)

2015

2014

2013

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Interest
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$

346
1,567

$
$

389
2,048

$
$

369
1,729

During the fourth quarter of 2015, Schlumberger entered into an agreement with one of its customers to receive
certain fixed assets in lieu of payment of approximately $200 million of accounts receivable.

73

Interest and other income includes the following:

(Stated in millions)

2015

2014

2013

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Earnings of equity method investments . . . . . . . . . . . . . . . . . . . . . . . . .

$

52
184

$

51
240

$

236

$

291

$

33
132

165

The change in Allowance for doubtful accounts is as follows:

(Stated in millions)

2015

2014

2013

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

275
75
(17)

$

384
39
(148)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$

333

$

275

$

202
205
(23)

384

Accounts payable and accrued liabilities are summarized as follows:

(Stated in millions)

2015

2014

Payroll, vacation and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

$

1,424
3,243
3,060

$

7,727

$

1,899
4,344
3,003

9,246

20. Discontinued Operations

During the second quarter of 2013, Schlumberger completed the wind down of its operations in Iran and,
therefore, classified the historical results of this business as a discontinued operation.

In 2009, the US Department of Justice began an investigation into past violations of US sanctions regarding
Schlumberger’s historical operations in Iran and Sudan that occurred between 2004 and 2010. During the second
quarter of 2014, Schlumberger increased its accrual for this contingency. Accordingly, Schlumberger recorded a
$205 million charge, which was reflected within Loss from discontinued operations in the Consolidated
Statement of Income during the second quarter of 2014.

During 2015, Schlumberger resolved this investigation and a non-US subsidiary of Schlumberger pleaded guilty
to one criminal count of conspiracy to violate the International Emergency Economic Powers Act. Under the
terms of the plea agreement, Schlumberger paid approximately $233 million in fines, penalties and assessments
during the second quarter of 2015, which had been previously accrued. This payment is reflected within Cash
flows used in discontinued operations – operating activities in Schlumberger’s Consolidated Statement of Cash
Flows.

74

The following table summarizes the results of these discontinued operations:

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

-

$

Loss before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(205)
-

Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(205) $

102

(63)
(6)

(69)

(Stated in millions)

2014

2013

75

Management’s Report on Internal Control Over Financial Reporting

Schlumberger management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rule 13a–15(f) of the Securities Exchange Act of 1934, as amended.
Schlumberger’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.

Because of its inherent
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

limitations,

Schlumberger management assessed the effectiveness of its internal control over financial reporting as of
December 31, 2015. In making this assessment, it used the criteria set forth in 2013 by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.
Based on this assessment Schlumberger’s management has concluded that, as of December 31, 2015, its internal
control over financial reporting is effective based on those criteria.

The effectiveness of Schlumberger’s internal control over financial reporting as of December 31, 2015 has been
audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their
report which appears herein.

76

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
of Schlumberger Limited

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income,
of comprehensive income, of stockholders’ equity and of cash flows present fairly, in all material respects, the
financial position of Schlumberger Limited and its subsidiaries at December 31, 2015 and 2014, and the results
of their operations and their cash flows for each of the three years in the period ended December 31, 2015 in
conformity with accounting principles generally accepted in the United States of America. Also in our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission in 2013. The Company’s management is
responsible for these financial statements, for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on
these financial statements and on the Company’s internal control over financial reporting based on our integrated
audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement and whether effective internal
control over financial reporting was maintained in all material respects. Our audits of the financial statements
included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our audit of internal control over financial reporting included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

limitations,

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Houston, Texas
January 27, 2016

77

Quarterly Results
(Unaudited)

The following table summarizes Schlumberger’s results by quarter for the years ended December 31, 2015 and
2014.

(Stated in millions, except per share amounts)

Net income
(loss)
attributable to
Schlumberger (2)

Earnings per share of
Schlumberger (2)

Basic

Diluted

Revenue (2)

Gross
Margin (1), (2)

Quarters 2015

First (3) . . . . . . . . . . . . . . . . . . . . . . . . $
Second . . . . . . . . . . . . . . . . . . . . . . . .
Third . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Fourth (4)

10,248
9,010
8,472
7,744

$

$

2,152
1,874
1,674
1,451

$

975
1,124
989
(1,016)

$

0.76
0.89
0.78
(0.81)

0.76
0.88
0.78
(0.81)

$

35,475

$

7,154

$

2,072

$

1.63

$

1.63

. . . . . . . . . . . . . . . . . . . . . . . . . . $

Quarters 2014
First
Second . . . . . . . . . . . . . . . . . . . . . . . .
Third . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth (5) . . . . . . . . . . . . . . . . . . . . . . .

$

11,239
12,054
12,646
12,641

$

2,494
2,785
2,957
2,950

$

1,592
1,595
1,949
302

$

1.22
1.23
1.51
0.24

$

48,580

$

11,182

$

5,438

$

4.20

$

1.21
1.21
1.49
0.23

4.16

(1) Gross margin equals Revenue less Cost of revenue.
(2) Amounts may not add due to rounding.
(3) Net income in the first quarter of 2015 includes after-tax charges of $383 million.
(4) Net income in the fourth quarter of 2015 includes after-tax charges of $1.835 billion.
(5) Net income in the fourth quarter of 2014 includes after-tax charges of $1.639 billion.

* Mark of Schlumberger

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Schlumberger has carried out an evaluation under the supervision and with the participation of Schlumberger’s
management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the
effectiveness of Schlumberger’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period
covered by this report. Based on this evaluation, the CEO and the CFO have concluded that, as of the end of the
period covered by this report, Schlumberger’s disclosure controls and procedures were effective to provide
reasonable assurance that information required to be disclosed in the reports that Schlumberger files or submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms. Schlumberger’s disclosure controls and procedures
include controls and procedures designed so that information required to be disclosed in reports filed or
submitted under the Exchange Act is accumulated and communicated to its management, including the CEO and

78

the CFO, as appropriate, to allow timely decisions regarding required disclosure. There has been no change in
Schlumberger’s internal control over financial reporting that occurred during the fourth quarter of 2015 that has
materially affected, or is reasonably likely to materially affect, Schlumberger’s internal control over financial
reporting.

Item 9B. Other Information.

None.

79

PART III

Item 10. Directors, Executive Officers and Corporate Governance of Schlumberger.

See “Item 1. Business – Executive Officers of Schlumberger” of this Report for Item 10 information regarding
executive officers of Schlumberger. The information under the captions “Election of Directors,” “Section 16(a)
Beneficial Ownership Reporting Compliance,” “Corporate Governance – Director Nominations” and “Corporate
Governance – Board Committees – Audit Committee” in Schlumberger’s 2016 Proxy Statement is incorporated
herein by reference.

Schlumberger has a Code of Conduct that applies to all of its directors, officers and employees, including its
principal executive, financial and accounting officers, or persons performing similar functions. Schlumberger’s
Code of Conduct is posted on its website at www.slb.com/about/codeofconduct.aspx. Schlumberger intends to
disclose future amendments to the Code of Conduct and any grant of a waiver from a provision of the Code of
Conduct requiring disclosure under applicable SEC rules at www.slb.com/about/codeofconduct.aspx.

Item 11. Executive Compensation.

the captions “Compensation Discussion and Analysis,” “Executive
The information set
Compensation Tables and Accompanying Narrative,” “Compensation Committee Report” and “Director
Compensation in Fiscal Year 2015” in Schlumberger’s 2016 Proxy Statement is incorporated herein by reference.

forth under

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.

The information under the captions “Stock Ownership Information—Security Ownership by Certain Beneficial
Owners,” “Stock Ownership Information—Security Ownership by Management” and “Equity Compensation
Plan Information” in Schlumberger’s 2016 Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information under
the captions “Corporate Governance—Board Independence” and “Corporate
Governance—Policies and Procedures for Approval of Related Person Transactions” in Schlumberger’s 2016
Proxy Statement is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information under the caption “Appointment of Independent Registered Public Accounting Firm” in
Schlumberger’s 2016 Proxy Statement is incorporated herein by reference.

80

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)

The following documents are filed as part of this Report:

(1) Financial Statements

Consolidated Statement of Income for the three years ended December 31,

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statement of Comprehensive Income for the three years ended

December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheet at December 31, 2015 and 2014 . . . . . . . . . . . . . .
Consolidated Statement of Cash Flows for the three years ended December 31,
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statement of Stockholders’ Equity for the three years ended

Page(s)

39

40
41

42

December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 and 44
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 to 75
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . .
Quarterly Results (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77
78

Financial statements of companies accounted for under the equity method and unconsolidated subsidiaries have
been omitted because they do not meet the materiality tests for assets or income.

(2) Financial Statement Schedules not required
(3) Exhibits: the exhibits listed in the accompanying “Index to Exhibits” are filed or incorporated by

reference as part of this Form 10-K.

81

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: January 27, 2016

SCHLUMBERGER LIMITED

By:

/S/ HOWARD GUILD
Howard Guild
Chief Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name

*

Paal Kibsgaard

/S/ SIMON AYAT

Simon Ayat

/S/ HOWARD GUILD

Howard Guild

*

Peter L.S. Currie

*

Maureen Kempston Darkes

*

Nikolay Kudryavtsev

*

Michael E. Marks

*

Indra K. Nooyi

*

Lubna S. Olayan

*

Leo Rafael Reif

*

Tore Sandvold

*

Henri Seydoux

Title

Chairman and Chief Executive Officer
(Principal Executive Officer)

Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

Chief Accounting Officer
(Principal Accounting Officer)

Director

Director

Director

Director

Director

Director

Director

Director

Director

/S/ ALEXANDER C. JUDEN

January 27, 2016

*By Alexander C. Juden Attorney-in-Fact

82

INDEX TO EXHIBITS

Agreement and Plan of Merger dated August 25, 2015, among Schlumberger Holdings Corporation,
Rain Merger Sub LLC, Schlumberger Limited and Cameron International Corporation, dated
August 25, 2015 (incorporated by reference to Exhibit 2.1 to Schlumberger’s Current Report on
Form 8-K filed on August 26, 2015)

Articles of Incorporation of Schlumberger Limited (Schlumberger N.V.), as last amended on April 6,
2011 (incorporated by reference to Exhibit 3 to Schlumberger’s Current Report on Form 8-K filed on
April 7, 2011)

Amended and Restated By-Laws of Schlumberger Limited (Schlumberger N.V.), as last amended on
May 12, 2015 (incorporated by reference to Exhibit 3.1 to Schlumberger’s Current Report on
Form 8-K filed on May 12, 2015)

Indenture dated as of December 3, 2013, by and among Schlumberger Investment SA, as issuer,
Schlumberger Limited, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as
trustee (incorporated by reference to Exhibit 4.1 to Schlumberger’s Current Report on Form 8-K filed
on December 3, 2013)

First Supplemental Indenture dated as of December 3, 2013, by and among Schlumberger Investment
SA, as issuer, Schlumberger Limited, as guarantor, and The Bank of New York Mellon Trust
Company, N.A., as trustee (including form of global notes representing 3.650% Senior Notes due
2023) (incorporated by reference to Exhibit 4.2 to Schlumberger’s Current Report on Form 8-K filed
on December 3, 2013)

Schlumberger Limited Supplementary Benefit Plan, as conformed to include amendments through
January 1, 2009 (incorporated by reference to Exhibit 10.2 to Schlumberger’s Annual Report on
Form 10-K for the year ended December 31, 2008) (+)

Schlumberger Limited Restoration Savings Plan, as conformed to include amendments through
January 1, 2009 (incorporated by reference to Exhibit 10.3 to Schlumberger’s Annual Report on
Form 10-K for the year ended December 31, 2008) (+)

First Amendment to Schlumberger Limited Restoration Savings Plan (incorporated by reference to
Exhibit 10.3 to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2013) (+)

Schlumberger 1998 Stock Option Plan, as conformed to include amendments through January 1, 2009
(incorporated by reference to Exhibit 10.4 to Schlumberger’s Annual Report on Form 10-K for the
year ended December 31, 2008) (+)

Third Amendment to Schlumberger 1998 Stock Option Plan (incorporated by reference to Exhibit 10.4
to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013) (+)

Schlumberger 2001 Stock Option Plan, as conformed to include amendments through January 1, 2009
(incorporated by reference to Exhibit 10.5 to Schlumberger’s Annual Report on Form 10-K for the
year ended December 31, 2008) (+)

Second Amendment to Schlumberger 2001 Stock Option Plan (incorporated by reference to Exhibit 10.5
to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013) (+)

83

Exhibit

2.1

3.1

3.2

4.1

4.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7

Schlumberger Limited 2004 Stock and Deferral Plan for Non-Employee Directors, amended and
restated effective January 19, 2012 (incorporated by reference to Exhibit 10 to Schlumberger’s
Current Report on Form 8-K filed on April 11, 2012.) (+)

Schlumberger 2005 Stock Incentive Plan, as conformed to include amendments through January 1,
2009 (incorporated by reference to Exhibit 10.6 to Schlumberger’s Annual Report on Form 10-K for
the year ended December 31, 2008) (+)

to Schlumberger 2005 Stock Incentive Plan (incorporated by reference to
Third Amendment
Exhibit 10.6 to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
(+)

Schlumberger 2008 Stock Incentive Plan, as conformed to include amendments through January 1,
2009 (incorporated by reference to Exhibit 10.8 to Schlumberger’s Annual Report on Form 10-K for
the year ended December 31, 2008) (+)

Second Amendment
to Schlumberger 2008 Stock Incentive Plan (incorporated by reference to
Exhibit 10.7 to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
(+)

Schlumberger 2010 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to
Schlumberger’s Current Report on Form 8-K filed on April 9, 2010) (+)

First Amendment to Schlumberger 2010 Omnibus Stock Incentive Plan (incorporated by reference to
Exhibit 10.8 to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
(+)

Form of 2013 Three Year Performance Share Unit Award Agreement under Schlumberger 2010
Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to Schlumberger’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2013) (+)

Form of 2014 Three Year Performance Share Unit Award Agreement under Schlumberger 2013
Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Schlumberger’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2014) (+)

French Sub-Plan of Schlumberger 2010 Omnibus Stock Incentive Plan for Employees in France
(incorporated by reference to Exhibit 10.7 to Schlumberger’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2013) (+)

Form of Option Agreement (Employees in France), Incentive Stock Option, under Schlumberger 2010
Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to Schlumberger’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013) (+)

Form of Option Agreement (Employees in France), Non-Qualified Stock Option, under Schlumberger
2010 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.11 to Schlumberger’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013) (+)

Form of Restricted Stock Unit Award Agreement (Employees in France) under Schlumberger 2010
Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to Schlumberger’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013) (+)

Form of 2013 One Year Performance Share Unit Award Agreement (Employees in France) under
Schlumberger 2010 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to
Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013) (+)

84

Exhibit

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

Schlumberger 2013 Omnibus Stock Incentive Plan (incorporated by reference to Appendix A to
Schlumberger’s Definitive Proxy Statement on Schedule 14A filed on March 1, 2013) (+)

Exhibit

10.22

First Amendment to Schlumberger 2013 Omnibus Stock Incentive Plan (incorporated by reference to
Exhibit 10.9 to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
(+)

Form of Option Agreement, Incentive Stock Option, under Schlumberger 2013 Omnibus Stock
Incentive Plan (incorporated by reference to Exhibit 10.1 to the Schlumberger’s Quarterly Report on
Form 10-Q for the quarter ended in June 30, 2015) (+)

Form of Option Agreement, Non-Qualified Stock Option, under Schlumberger 2013 Omnibus Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 to Schlumberger’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2015) (+)

Form of Restricted Stock Unit Award Agreement under Schlumberger 2013 Omnibus Stock Incentive
Plan (incorporated by reference to Exhibit 10.3 to Schlumberger’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2015) (+)

Schlumberger Discounted Stock Purchase Plan, as amended and restated effective as of January 1,
2013 (incorporated by reference to Appendix B to Schlumberger’s Definitive Proxy Statement on
Schedule 14A filed on March 1, 2013) (+)

Form of Option Agreement, Capped Incentive Stock Option (incorporated by reference to
Exhibit 10.1 to Schlumberger’s Current Report on Form 8-K filed on January 19, 2006) (+)

Form of Option Agreement, Capped Non-Qualified Stock Option (incorporated by reference to
Exhibit 10.2 to Schlumberger’s Current Report on Form 8-K filed on January 19, 2006) (+)

Form of Option Agreement, Uncapped Incentive Stock Option (for 2001, 2005 and 2008 stock plans)
(incorporated by reference to Exhibit 10.11 to Schlumberger’s Annual Report on Form 10-K for the
year ended December 31, 2009) (+)

Form of Option Agreement, Uncapped Non-Qualified Stock Option (for 2001, 2005 and 2008 stock
plans) (incorporated by reference to Exhibit 10.12 to Schlumberger’s Annual Report on Form 10-K
for the year ended December 31, 2009) (+)

Form of Smith International, Inc. 2010 Restricted Stock Unit Agreement (incorporated by reference to
Exhibit 10.3 to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2010) (+)

Form of Indemnification Agreement (incorporated by reference to Exhibit 10 to Schlumberger’s
Current Report on Form 8-K filed on October 21, 2013)

Form of 2016 Three Year Performance Share Unit Award Agreement under the Schlumberger 2013
Omnibus Stock Incentive Plan, Applicable to Employees who did not receive a 2013 Transition
Award (incorporated by reference to Exhibit 10.3 to Schlumberger’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2015) (+)

Form of 2016 Three Year Performance Share Unit Award Agreement under the Schlumberger 2013
Omnibus Stock Incentive Plan, Applicable to Employees who received a 2013 Transition Award
(incorporated by reference to Exhibit 10.4 to Schlumberger’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2015) (+)

85

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

Form of Incentive Stock Option Agreement under the Schlumberger 2010 Omnibus Stock Incentive
Plan (incorporated by reference to Exhibit 10.6 to Schlumberger’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2015) (+)

Form of Restricted Stock Unit Award Agreement under the Schlumberger 2010 Omnibus Stock
Incentive Plan (incorporated by reference to Exhibit 10.7 to Schlumberger’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2015) (+)

Form of Non-Qualified Stock Option Agreement under the Schlumberger 2010 Omnibus Stock
Incentive Plan (incorporated by reference to Exhibit 10.8 to Schlumberger’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2015) (+)

Subsidiaries (*)

Consent of Independent Registered Public Accounting Firm (*)

Powers of Attorney (*)

Exhibit

10.36

10.37

10.38

21

23

24

Certification of Chief Executive Officer pursuant
Section 302 of the Sarbanes-Oxley Act of 2002 (*)

to Rule 13a-14(a) as Adopted Pursuant

to

31.1

Certification of Chief Financial Officer pursuant
Section 302 of the Sarbanes-Oxley Act of 2002 (*)

to Rule 13a-14(a) as Adopted Pursuant

to

31.2

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (*)

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (*)

Mine Safety Disclosure (*)

The following materials from Schlumberger Limited’s Annual Report on Form 10-K for the year
formatted in XBRL (eXtensible Business Reporting Language):
ended December 31, 2015,
(i) Consolidated Statement of Income, (ii) Consolidated Statement of Comprehensive Income,
(iii) Consolidated Balance Sheet, (iv) Consolidated Statement of Cash Flows, (v) Consolidated
Statement of Equity and (vi) Notes to Consolidated Financial Statements. (*)

(*) Exhibits electronically filed with this Form 10-K. All other exhibits incorporated by reference.

(+) Management contracts or compensatory plans or arrangements.

32.1

32.2

95

101

86

Significant Subsidiaries

Listed below are the significant subsidiaries of the Registrant as of December 31, 2015, and the states or
jurisdictions in which they are incorporated or organized. The indentation reflects the principal parenting of each
subsidiary. The names of other subsidiaries have been omitted from the list below, since they would not
constitute, in the aggregate, a significant subsidiary as of December 31, 2014.

Exhibit 21

Schlumberger Antilles N.V., Curacao

Schlumberger B.V., Netherlands

Schlumberger Canada Limited, Canada
Schlumberger SA, France

Services Petroliers Schlumberger, France

Schlumberger Norge AS, Norway
Schlumberger Holdings Corporation, Delaware

Schlumberger Technology Corporation, Texas
Smith International Inc, Delaware

Schlumberger UK Limited, UK

M-I Holdings (UK) Limited, UK
Schlumberger Plc, UK

Schlumberger Oilfield UK Plc, UK

M-I Holdings BV, Netherlands

Schlumberger Oilfield Holdings Limited, BVI

Schlumberger Holdings Limited, BVI

Dowell Schlumberger Corporation, BVI
Schlumberger Logelco, Inc., Panama
Schlumberger Middle East SA., Panama
Schlumberger Offshore Services Limited, BVI
Schlumberger Overseas, SA, Panama
Schlumberger Seaco, Inc., Panama
Schlumberger Surenco, SA, Panama

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We hereby consent

to the incorporation by reference in the Registration Statements on Form S-8
(Nos. 333-36364; 333-36366; 333-104225; 333-115277; 333-124534; 333-151920; 333-173055, as amended by
post-effective amendment on Form S-8; 333-188589; and 333-188590); on Form S-3 (Nos. 333-195342 and
333-190822); and on Form S-4 (Nos. 333-207260; 333-97899; and 333-166326, as amended by post-effective
amendment on Form S-8) of Schlumberger Limited of our report dated January 27, 2016 relating to the
consolidated financial statements and the effectiveness of internal control over financial reporting, which appears
in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Houston, Texas
January 27, 2016

Powers of Attorney

Exhibit 24

Each of the undersigned, in the capacity or capacities set forth below his or her signature as a member of the
Board of Directors and/or an officer of Schlumberger Limited, a Curaçao corporation, hereby appoints Simon
Ayat, Howard Guild and Alexander C. Juden, or either of them, the attorney or attorneys of the undersigned, with
full power of substitution and revocation, for and in the name, place and stead of the undersigned to execute and
file with the Securities and Exchange Commission the Annual Report on Form 10-K under the Securities
Exchange Act of 1934 (the “Exchange Act”) for the fiscal year ending December 31, 2015, and any amendment
or amendments to any such Annual Report on Form 10-K, and any agreements, consents or waivers relative
thereto, and to take any and all such other action for and in the name and place and stead of the undersigned as
may be necessary or desirable in order to comply with the Exchange Act or the rules and regulations thereunder.

/s/ Peter L.S. Currie
Peter L.S. Currie
Director

/s/ Maureen Kempston Darkes
Maureen Kempston Darkes
Director

/s/ Paal Kibsgaard
Paal Kibsgaard
Chairman of the Board and Chief Executive Officer

/s/ Nikolay Kudryavtsev

Nikolay Kudryavtsev
Director

/s/ Michael E. Marks

Michael E. Marks
Director

Date: January 27, 2016

/s/Indra K. Nooyi

Indra K. Nooyi
Director

/s/ Lubna S. Olayan

Lubna S. Olayan
Director

/s/ Leo Rafael Reif

Leo Rafael Reif
Director

/s/ Tore Sandvold

Tore Sandvold
Director

/s/ Henri Seydoux

Henri Seydoux
Director

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Paal Kibsgaard, certify that:

1. I have reviewed this Annual Report on Form 10-K of Schlumberger Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

b)

c)

d)

Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):

a)

b)

All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.

Date: January 27, 2016

/s/ Paal Kibsgaard

Paal Kibsgaard
Chief Executive Officer

Exhibit 31.2

I, Simon Ayat, certify that:

CERTIFICATION OF CHIEF FINANCIAL OFFICER

1. I have reviewed this Annual Report on Form 10-K of Schlumberger Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

b)

c)

d)

Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):

a)

b)

All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.

Date: January 27, 2016

/s/ Simon Ayat

Simon Ayat
Executive Vice President and Chief Financial Officer

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

In connection with the Annual Report on Form 10-K of Schlumberger N.V. (Schlumberger Limited) (the
“Company”) for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the
date hereof (the “Report”), I, Paal Kibsgaard, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

(2)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and

The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Date: January 27, 2016

/s/ Paal Kibsgaard

Paal Kibsgaard
Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Schlumberger Limited
and will be retained by Schlumberger Limited and furnished to the Securities and Exchange Commission or its
staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall
not be deemed filed by the Company for purposes of Section 18 of the Exchange Act.

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connection with the Annual Report on Form 10-K of Schlumberger N.V. (Schlumberger Limited) (the
“Company”) for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the
date hereof (the “Report”), I, Simon Ayat, Executive Vice President and Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

(2)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and

The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Date: January 27, 2016

/s/ Simon Ayat

Simon Ayat
Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Schlumberger Limited
and will be retained by Schlumberger Limited and furnished to the Securities and Exchange Commission or its
staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall
not be deemed filed by the Company for purposes of Section 18 of the Exchange Act.

Mine Safety Disclosure

Exhibit 95

The following disclosure is provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, which requires certain disclosures by companies required to file periodic reports under
the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety
and Health Act of 1977.

The table that follows reflects citations, orders, violations and proposed assessments issued by the Mine
Safety and Health Administration (the “MSHA”) to M-I LLC, an indirect wholly-owned subsidiary of
Schlumberger. The disclosure is with respect to the full year ended December 31, 2015. Due to timing and other
the data may not agree with the mine data retrieval system maintained by the MSHA at
factors,
www.MSHA.gov.

Full Year 2015
(whole dollars)

Mine or Operating
Name/MSHA Identification
Number

Section
104 S&S
Citations

Section
104(b)
Orders

Section
104(d)
Citations
and
Orders

Section
110(b)(2)
Violations

Section
107(a)
Orders

Proposed
MSHA
Assessments(1)

Mining
Related
Fatalities

Received
Notice of
Pattern of
Violations
Under
Section
104(e)
(yes/no)

Received
Notice of
Potential
to Have
Pattern
Under
Section
104(e)
(yes/no)

Legal
Actions
Pending as
of Last
Day of
Period

Legal
Actions
Initiated
During
Period

Legal
Actions
Resolved
During
Period

Amelia Barite Plant/1600825

Battle Mountain Grinding
Plant/2600828

Galveston GBT Barite
Grinding Plant/4104675

Greybull Milling
Operation/4800602

Greybull Mining
Operation/4800603

Greystone Mine/2600411

MI SWACO-Alpine/4104829

MI SWACO-Brownsville
Grinding Plant/4103033

Mountain Springs
Beneficiation Plant/2601390

0

0

0

0

0

0

0

0

3

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

$0

$100

$408

$834

$500

$1,369

$0

$100

$1,786

0

0

0

0

0

0

0

0

0

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

(1)

Amounts included are the total dollar value of proposed assessments received from MSHA on or before December 31,
2015, regardless of whether the assessment has been challenged or appealed, for citations and orders occurring during
the full year 2015. Citations and orders can be contested and appealed, and as part of that process, are sometimes
reduced in severity and amount, and sometimes dismissed. The number of citations, orders, and proposed assessments
vary by inspector and also vary depending on the size and type of the operation.

Board of Directors

Corporate Ofﬁcers

Corporate Information

Peter L.S. Currie 2, 4
President, Currie Capital LLC
Palo Alto, California

V. Maureen Kempston Darkes 1
Former Group Vice President
General Motors Corporation
Detroit, Michigan

Paal Kibsgaard
Chairman and Chief Executive Ofﬁcer
Schlumberger

Nikolay Kudryavtsev 1, 5
Rector
Moscow Institute of Physics
and Technology
Moscow, Russia

Michael E. Marks 2, 4
Managing Partner
Riverwood Capital, LLC
Palo Alto, California

Indra K. Nooyi 1, 2
Chairman and
Chief Executive Ofﬁcer
PepsiCo
Purchase, New York

Lubna S. Olayan 2, 3
Chief Executive Ofﬁcer
Olayan Financing Company
Riyadh, Saudi Arabia

Leo Rafael Reif 4, 5
President
Massachusetts Institute
of Technology
Cambridge, Massachusetts

Tore I. Sandvold 3, 4
Executive Chairman
Sandvold Energy AS
Oslo, Norway

Henri Seydoux 3, 5
Chairman and
Chief Executive Ofﬁcer
Parrot S.A.
Paris, France

Paal Kibsgaard
Chairman and Chief Executive Ofﬁcer

Simon Ayat
Executive Vice President  
and Chief Financial Ofﬁcer

Alexander C. Juden
Secretary and General Counsel

Ashok Belani
Executive Vice President Technology

Jean-François Poupeau 
Executive Vice President Corporate 
Development and Communications

Patrick Schorn 
President Operations 

Aaron Gatt Floridia 
President Reservoir  
Characterization Group

Khaled Al Mogharbel
President Drilling Group

Sherif Foda
President Production Group

Imran Kizilbash
Vice President and Treasurer

Stephane Biguet
Vice President Controller

Gérard Martellozo
Vice President Human Resources

Mark Danton
Vice President and Director of Taxes

Simon Farrant
Vice President Investor Relations

Howard Guild
Chief Accounting Ofﬁcer

Saul Laureles
Assistant Secretary

Eileen Hardell
Assistant Secretary

Stockholder Information 
Schlumberger’s common stock 
is listed on the New York Stock 
Exchange, trading symbol “SLB,”  
and on the Euronext Paris, London, 
and SIX Swiss Stock Exchanges.

For quarterly earnings dividend 
announcements and other informa-
tion, please call (800) 997-5299  
from the United States and Canada, 
or +1 (813) 774-5043 outside  
North America. You may also visit 
www.slb.com/ir.

Stock Transfer Agent 
and Registrar
Computershare Trust Company, N.A. 
P.O. Box 30170
College Station, Texas 77842
+1 (877) 745-9341 
+1 (781) 575-2707

For Overnight Delivery: 
Computershare Trust Company, N.A.
211 Quality Circle, Suite 210
College Station, Texas 77845
+1 (877)745-9341
+1 (781) 575-2707

General stockholder  
information is available on  
the Computershare website at 
www.computershare.com.

E-mail Alerts
To receive Schlumberger press 
releases and daily news,  
sign up at www.slb.com/ir.

Form 10-K
The Schlumberger 2015 annual 
report on Form 10-K ﬁled with  
the Securities and Exchange 
Commission is available without 
charge. To obtain a copy, call  
(800) 997-5299 within North  
America and +1 (813) 774-5043  
outside North America.  
Alternatively, you can view and  
print all of our SEC ﬁlings online  
at www.slb.com/ir or write to:  
Vice President Investor Relations, 
Schlumberger Limited,  
5599 San Felipe, 17th Floor, 
Houston, Texas, 77056.

Duplicate Mailings
When a stockholder owns shares 
in more than one account, or when 
stockholders live at the same 
address, duplicate mailings may 
result. If you receive duplicate 
reports, you can help eliminate the 
added expense by requesting that 
only one copy be sent. To elimi-
nate duplicate mailings, contact 
Computershare Trust Company, N.A., 
Stock Transfer Agent and Registrar.

Nonproﬁt Community 
Development Programs
Schlumberger supports and 
encourages a range of community 
development programs—both global 
and local—which are often initiated 
and implemented by employees. 
We have chosen to focus on STEM 
(science, technology, engineering, 
and mathematics) education and 
community health and safety. To 
learn more about these programs, 
please visit www.seed.slb.com 
and www.foundation.slb.com, for 
programs such as Faculty for the 
Future, which are managed by the 
Schlumberger Foundation.

World Wide Web
For information on Schlumberger 
technology, services and solutions, 
visit www.slb.com. For information 
on career and job opportunities  
at Schlumberger, visit  
www.careers.slb.com.

*  Mark of Schlumberger 

Other company, product, and service names are 
the properties of their respective owners.

Photography by Rossitsa Israël (cover, pages 4, 
6–7, 12, 21, 22, 25, 26); Ken Childress (inside 
front cover, pages 15, 16, 18); Franck Guyomard 
(page 5); Anne Lise Norheim (page 8); Vincent 
Colin (page 10); Kurnia Ramadhan (page 14); 
Adrian Lee (page 19); Erlend Holm (page 24);  
Schlumberger archives (pages 11, 20).

1 Member, Audit Committee
2 Member, Compensation Committee
3 Member, Finance Committee
4 Member, Nominating and Governance Committee
5 Member, Science and Technology Committee

 
  
 
Schlumberger Limited

42 rue Saint-Dominique
75007 Paris
France

5599 San Felipe, 17th Floor
Houston, Texas 77056
United States

62 Buckingham Gate
London SW1E 6AJ
United Kingdom

Parkstraat 83
2514 JG The Hague
The Netherlands

www.slb.com