2020 Annual Report
Schlumberger Limited
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CONTENTS
2
LETTER TO SHAREHOLDERS
4 AN EVOLVING ENERGY INDUSTRY
The Performance Strategy
4
A Global Reach Equipping Basins for Success
11
12 PERFORMANCE IN PRACTICE
12
15
Our Safety and Service Quality Commitment
Focus on People
18 OPPORTUNITIES IN THE ENERGY TRANSITION
18
18
22
Environmental Performance
Decarbonizing Oil and Gas Operations
Schlumberger New Energy
Directors, Officers, and
Corporate Information
Inside Back Cover
Schlumberger (SLB: NYSE) is a technology company
that partners with customers to access energy. Our
people, representing over 160 nationalities, are
providing leading digital solutions and deploying
innovative technologies to enable performance and
sustainability for the global energy industry. With
expertise in more than 120 countries, we collaborate
to create technology that unlocks access to energy
for the benefit of all.
Find out more at slb.com
Safety
Sustainability
ESG Rating
Improvement
B
TRIF (Total Recordable Injury Frequency)
2019
2020
CDP Climate Change
Service Quality
Financial
Improvement
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Schlumberger Limited | 2020 Annual Report
Our Resilience, Driving Performance
† For a reconciliation of adjusted EBITDA to loss before
taxes on a GAAP basis, see our fourth-quarter and
full-year 2020 results earnings press release at
investorcenter.slb.com/node/22541/html (pp. 19–20).
†
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L ETTER TO SHAREHOLDERS
Looking back on 2020, I would like to reflect on what this year meant for Schlumberger—a year that
brought incredible challenges, but during which we achieved much and laid a strong foundation for
our future success—through resilience and strategic execution. The global pandemic changed our
industry, our markets, and the world. The energy mix evolved, and customer needs shifted toward
increasing competitiveness.
In response to what will likely be the most severe activity
decline in our industry, we acted swiftly to protect the
company and the long-term value for our shareholders. First,
we significantly reduced our capital spend and prudently
adjusted our dividend policy to reflect the reduced activity
and uncertain outlook. These actions resulted in very resilient
cash flow generation throughout 2020.
decarbonization mandate for the industry. During the year,
we made impressive progress on our Digital platform
strategy, with significant expansion of our digital partner
ecosystem and several anchor enterprise contracts with
our customers, paving the way to our stated ambition of
leading the industry and doubling the size of our digital
solutions business.
Second, we accelerated the execution of our performance
strategy, which I unveiled in 2019. In North America, the very
timely execution of our scale-to-fit and portfolio high-grading
approach led to a unique win-win transaction with our
partner, Liberty Oilfield Services. In addition, we initiated the
largest restructure in company history, making Schlumberger
much leaner and more responsive to customers.
Similarly, our sustainability commitment translated into a
14% reduction of our Scope 1 and 2 greenhouse gas (GHG)
emissions intensity within one year—well on the path to our
stated 2025 emissions reduction goal. With our customers,
we accelerated engagement to provide solutions for the
decarbonization of oil and gas operations through our digital
solutions and environmental impact-reducing technologies.
The company is now composed of four Divisions operating in
five distinct Basins, aligned with key customer workflows and
critical hubs of activity. The restructure permanently removed
significant structural costs, resetting our margins and our
operating leverage for the future. The effectiveness of this
new structure was highlighted during the last few months of
the year, which resulted in peer-leading market performance
and financial results during the last quarter.
This strategic step was designed to also address the emerging
trends in the new landscape, which call for a step change in
efficiency and resilience—in particular, by delivering upon the
digital transformation imperative and the sustainability and
To ready the company for the future, we launched
Schlumberger New Energy, and are using our strengths to
establish market positions and develop differentiated,
groundbreaking technology in multiple low- and zero-carbon
energy ventures. We are applying our unique knowledge and
executional capabilities to develop sustainable technology
solutions across several sectors of the energy transition.
As we look toward 2021 and the prospect of demand
recovery for our industry, the strategic actions we took this
year will prove essential to adapt the company for the new
landscape and to create formidable operating leverage as
the industry upcycle commences.
This could not have happened without the diversity, unique
spirit, and will of the people of Schlumberger. I am very proud
of how they responded and what they created. Despite the
pandemic, our people demonstrated resilience and delivered
record safety and operational integrity results that were
differentiating factors for customers. Our people have
shown that they are prepared to innovate and drive industry
performance across the energy transition and are well
positioned to create significant long-term shareholder value.
We opened a new industry chapter during 2020 and exited
the year in a leading position as the market shifts to
increased international production, digital transformation
accelerates, and we prepare to contribute significantly to
a more sustainable energy supply. We responded as a team
with drive and purpose, reinventing ourselves in a time of
crisis for a new future.
In 2021, I look forward to continuing to meet the world’s
energy challenges with an innovative spirit and a renewed
focus on shareholder value and sustainability. Together, we
will define and drive high performance in the new landscape
for our people, our customers, our shareholders, and our world.
Olivier Le Peuch
Chief Executive Officer
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Our Resilience, Driving Performance
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AN EV OLVI NG IN DUS TR Y
Our Resilience, Driving Performance
In 2019, Olivier Le Peuch assumed leadership of Schlumberger, presenting
a new corporate strategy based on a fresh perspective of the energy
industry. This strategy is designed to adapt the company to an evolving
industry landscape shaped by emerging drivers, including capital
discipline, regionalization of supply and demand, an efficiency imperative,
and resilience—defined by sustainability and lower carbon footprint.
The strategy is designed to magnify our ability to improve customer
performance. Performance is the differentiating factor that will help
our industry adapt to higher stakeholder expectations. Our strategy
proved resilient throughout a very challenging year.
The Performance Strategy
Oil and gas will remain critical to economic activity and prosperity
—contributing more than 50% to the global energy mix in the next
few decades. Our role is twofold: to enable customers to produce
these resources efficiently and cost effectively and to support the
industry transition as the world diversifies its energy mix.
Strengthen the Core
The core of Schlumberger is how we work with customers and
execute our business. The elements in this theme—which include
Operations Integrity & Efficiency, Customer Collaboration, and
Capital Stewardship—are enabled by our people and technology.
Operations integrity—core to our culture—is enhanced by the
digitalization of our operations. Just as Schlumberger is delivering
digital solutions to our customers, we are advancing them in our own
operations to capture more value from our equipment and services
businesses by integrating them into our digital infrastructure.
THE EVOLVING ENERGY MIX, 2019–2040
Oil and gas continue to satisfy a substantial
portion of energy demand, while renewables
continue to grow, displacing coal.
19.3%
26.1%
2019
31.4%
23.2%
2040
28.2%
27.1%
25.3%
19.4%
Oil Gas Coal Renewables & Other
Source: STEPS scenario, IEA, World
Energy Outlook, November 2020
G o - to-Market
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Capital
Stewardship
I n t e g r i
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Customer
Performance
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Production
& Recovery
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D i g i
Sustainability
& New Energy
As a service company, we have always worked closely with
customers and are exploring new ways to collaborate and help them
overcome their challenges and increase performance. This year, we
set a new record in safety and service quality performance for a third
consecutive year.
OUR PERFORMANCE STRATEGY
The strategy is built around three major
themes, all of which are focused on
customer performance—a defining
attribute in the new industry landscape.
Capital Stewardship is a crucial factor for our industry moving forward.
Schlumberger implemented a new capital allocation framework that
governs all investments, whether those relate to capex, mergers and
acquisitions, or research and engineering. The underlying principle behind
the framework is that investment opportunities are prioritized on returns
and cash flow before any other criteria. Using the framework, we
performed a critical assessment of our technology portfolio, which resulted
in decisions to rationalize our offering and exit certain commoditized
businesses and restructure underperforming business units.
FOCUSING ON CAPITAL STEWARDSHIP
Schlumberger contributed its onshore
hydraulic fracturing business in the United
States and Canada (“OneStim®”) to Liberty
Oilfield Services, including its pressure
pumping, pumpdown perforating, and
Permian frac sand businesses, in exchange
for a 37% equity interest in Liberty.
This enables us to participate in the
US unconventional market without the
high capital burden this business demands.
The steps we took this year reduced our capital intensity, while free cash
flow generation remained strong, despite severe industry headwinds.
We structurally increased our earnings power and margin profile, which
position us well to lead in the industry recovery cycle.
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Our Resilience, Driving Performance
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AN EVOLVING INDUST RY
continued
Go-to-Market
Industry markets have evolved into multiple, diverse regional markets
that are increasingly in competition with each other to meet global,
regional, and domestic oil and gas demand. Each of these regions has
a set of resource plays—or basins—with localized economics and
operational drivers. This presents Schlumberger with opportunities
that can be optimally addressed with a basin-specific approach.
This strategic theme includes Performance Models, Fit-for-Basin, and
Technology Access. These elements develop deeper partnerships
with our customers, expanding on their needs and challenges from a
basin-specific perspective to provide technology and business models
tailored to regional or individual customer requirements. These elements
help us share in the performance improvement we deliver for customers
and partners.
PERFORMED BY SCHLUMBERGER PROGRAM
The Performed by Schlumberger (PbS) program recognizes team
members throughout the company who have demonstrated
exceptional levels of teamwork, innovation, and business
impact for Schlumberger and its customers. The PbS program
not only encourages excellence in Schlumberger, but also
recognizes and promotes cross-departmental teamwork
throughout the company.
2020 WINNERS
Customer Performance Category:
The Ascent of Subsea Gas Compression
See page 7 for project overview.
Operations Excellence Category:
The Big Shift
See page 17 for project overview.
Innovation Category:
Ora—The Dawn of a New Era
See page 21 for project overview.
The highest honor is the CEO Award, which is presented
in three categories: Customer Performance, Operations
Excellence, and Innovation. These winning projects have
created substantial business impact and strengthen our
culture of excellence.
“
There were a record
880 PbS submissions
this year, a 48%
increase over 2019."
From our state-of-the-art OneSubsea
facility in Horsøy, Norway, we provide
maintenance services for processing
systems worldwide.
Performed by Schlumberger:
The Ascent of Subsea Gas Compression
This year, the Performed by Schlumberger CEO Award in the Customer Performance category was
presented to the team from The Ascent of Subsea Gas Compression project. This category recognizes
projects that have driven our customers’ performance to new levels. By focusing on the customer,
the project has enabled high performance while supporting a better, cleaner, and safer industry.
The success of the project also helped solidify subsea multiphase compression as an attractive and
robust technology to improve the value of subsea gas fields, generating interest from other operators
that were considering the technology.
Team members include Arill Smaaland Hagland
Multiphase boosting subsea layout.
(project team leader), Bernt Helge Torkildsen,
Simon Kalgraff, John Olav Fløisand, and
Fredrik Wadel-Andersen.
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Our Resilience, Driving Performance
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AN EVOLVING INDUST RY
continued
84 Fit-for-basin technologies
under development
2
New local manufacturing
centers inaugurated
46
Partners globally using
technology access models
Fit-for-Basin describes the mindset we adopted toward technology
development and deployment, in-country value, and market access.
In an increasingly regionalized energy market, we believe these attributes
become more customer-specific, and we rely on our long-standing
relationships and expertise in more than 120 countries for the insight
to deliver technology where we can enhance performance.
In-Country Value: SPARK
Schlumberger opened a world-class manufacturing center in
King Salman Energy Park (SPARK) that supports Saudi Aramco’s
In-Kingdom Total Value Add (IKTVA) program to promote economic
growth. The center will manufacture various technologies,
including liner hangers and packers, in addition to isolation valve
technologies—such as GROVE* valves and ORBIT* rising stem ball
valves—to help improve the efficiency of oil and gas operations
in Saudi Arabia and neighboring countries.
The Middle East Center for Reliability and Efficiency
(CRE) is another example of our commitment to
in-country value. Local engineers service PowerDrive*
rotary steerable systems, supporting the region from
Dammam, Saudi Arabia.
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Our Resilience, Driving Performance
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ACCELERATING DIGITAL ADOPTION
During 2020, our DELFI* cognitive
E&P environment saw more intense
adoption, with more than
signed and
150 contracts
400%
user growth
since 2019.
CLOUD SOLUTIONS FOR EVERY
CUSTOMER IN EVERY BASIN
This year, we reached a unique agreement
with IBM and Red Hat® to leverage hybrid
digital infrastructure. The collaboration is
empowering our customers to overcome data
residency constraints—a major barrier to
adoption internationally. Using Red Hat
OpenShift® and a variety of cloud platforms,
including in-country solutions and hybrid
cloud architectures, we can now deploy for
every customer in every basin. This open
technology architecture makes our DELFI
environment the first-ever private and public
cloud-portable digital environment for all
domains across the E&P life cycle.
AN EVOLVING INDUST RY
continued
Horizons of Growth
The third set of strategic elements positions Schlumberger to build share
in current markets and expand into new long-term markets: Digital,
Production & Recovery, and Sustainability & New Energy. These
elements are now in sharper focus in the context of energy transition.
The importance of Production & Recovery and Digital increase with the
drive to maximize performance, while Sustainability & New Energy
address the need to provide energy with reduced environmental impacts.
Digital capabilities helped the industry navigate the challenges of 2020
and are crucial to long-term performance and resilience. Through our
industry digital platform, we are enabling digital transformation at scale,
unlocking significant value, and leading innovation across the digital
domain in our industry.
In the last five years, we designed and built a highly secure and
flexible digital industry platform around differentiated digital
technologies—enabled by key partnerships. We have worked closely
with Google Cloud™, IBM®, and Microsoft® to provide an open digital
platform that takes advantage of on-demand, high-performance
computing and makes capabilities like embeded AI or machine learning
readily accessible to customers.
In 2020, we made substantial progress on our Digital ambition,
accelerating digital adoption by removing barriers and introducing new
technologies in a year when digital capabilities became critically important
to many customers. We move technical workflows from the desktop to
the cloud, creating data structures that enable AI and machine learning
to provide insights at scale across operations. The platform provides
us with opportunities to create new revenue streams, as our customers
execute on their digital journeys to achieve a step change in
performance and efficiency.
A Global Reach Equipping Basins for Success
With the elements of the new strategy set, we needed an organization
specifically designed to execute and maximize the effectiveness of that
strategy. To fully capitalize on a strategy focused on delivering a step
change in industry performance, we accelerated the most comprehensive
restructure in company history.
The Basin Structure
Americas Land
Offshore Atlantic
Middle East & North Africa
Russia & Central Asia
Asia
This new structure is aligned with our customers’ workflows and
directly linked to the performance strategy. It consists of four Divisions
that combine and integrate Schlumberger’s technologies. The Divisions
are positioned to capitalize on the recovery cycle and growth drivers in
the new industry landscape: digital transformation, sustainable and
lower carbon operations, the mandate for production and recovery,
maximizing reservoir performance, and well construction
integration and efficiency.
The Divisions are deployed around a geographical structure within five
highly focused Basin organizations that bring agility, responsiveness, and
competitiveness. The Basins were configured around common regional
characteristics to deploy fit-for-purpose technologies, operating models,
and skills. With a strong focus on regional customers, the Basins
identify opportunities for local growth.
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Our Resilience, Driving Performance
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“
We significantly improved both safety and
service quality—two strong foundations
of our performance strategy—despite
COVID-19 adversity."
PERFO RMANCE I N PRAC TICE
The strategy and structure were designed to empower the people of
Schlumberger to perform. Our success has always been built on the
spirit of ingenuity and perseverance of our people. In 2020, we
witnessed the best embodiment of this spirit.
Our Safety and Service Quality Commitment
Our people rose to the challenge of the coronavirus pandemic,
integrating COVID-19 safety into our daily operations, maintaining
business continuity, and protecting not only each other, but customers,
our families, and our communities. Schlumberger quickly developed
standards and practices for COVID-19 safety—which we continue to
evolve—and shared them with customers and contractors to contribute
to a resilient response across the industry.
We significantly improved both safety and service quality—two strong
foundations of our performance strategy. The team achieved record
bests in both despite COVID-19 adversity. In fact, this performance
proved to be a critical differentiator for our customers, enabling us to
strengthen our market position.
Technology helped our people adapt to changing risks across the year,
improving safety and results for customers. In a year of restricted travel
and logistics, our leadership in digital and remote operations was a
differentiating factor.
In the early stages of the COVID-19 pandemic, we developed our
COVID-19 Schlumberger SAFE app to enable our people to stay
connected and informed with the tools and resources they
needed. The app became one of the fastest-adopted PowerApps®
ever released on the Microsoft platform.
12 Schlumberger Limited | 2020 Annual Report
Operators practice social distancing on
site in Colombia.
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PERFORM ANCE IN PRA CTICE
continued
Remote Operations
Connecting people, technology, and expertise has been central to the
adaptability of Schlumberger and the collaborative mindset that ignites
solutions and delivers performance for our customers. This evolved
throughout the years from physical remote operational support centers
to live operational support and control from wherever you are—on any
device. Remote operations can reduce onsite personnel while improving
access to experts, maintaining operation continuity, and reducing
environmental impacts—factors which greatly accelerated adoption
during the COVID-19 pandemic. Remote operations expanded by 25% in
a matter of months across a range of services.
By providing better data access to customers and continuing to engage
with them, we were able to help them not just maintain business
continuity, but in many cases, increase efficiency and reduce
environmental impact in a variety of field operations.
REAL-TIME OPERATIONS CONTROL—
FROM ANYWHERE AT ANY TIME
Performance Live* digitally connected service is
an operating model that evolved over years of
expertise, resulting in a safer work environment,
higher efficiency operations, and improved
customer performance.
Today, more than 60% of our operations
are supported by Performance Live service,
enabled from 21 Performance Live service
centers worldwide covering 84 countries
and all environments.
>23
million
Feet drilled
and logged
Zero
HSE incidents in
Performance Live
service supported jobs
>850,000
Hours below
rotary table
Global jobs use
Performance
Live service
84
Countries with
Performance Live
service
Drilling and intervention Performance Live service job statistics for 2020.
For example, in the Gulf of Mexico, secure
remote capabilities delivered by OneSubsea®
helped BP keep the Mad Dog 2 project on
schedule. Using a suite of remote solutions,
including remote customer-witness factory
integration testing (FIT), a remote master control
station, and integrated control and safety
systems, OneSubsea was able to provide
overviews of system functionality without
requiring onsite witnessing. BP is now considering
conducting all future FITs remotely, which would
result in significant cost savings related to travel
and further reduce operational risk.
During 2020, use of remote
operations averted travel for
>9,000
personnel to hundreds of
rigs across 84 countries.
Schlumberger completed
103,000
drilling and measurement
remote shifts.
Schlumberger completed
>5,600
remote wireline runs.
An engineer stands alongside
a truck equipped to provide
autonomous wireline logging
and the Performance Live
digitally connected service.
Focus on People
People are the pulse and spirit of Schlumberger. They bring our culture
to life every day through their actions, and their achievement and
growth are the cornerstone of our success. The adoption of the new
structure and expanded remote capabilities accelerated several
long-term people priorities. We piloted new flexible working models,
advanced our goals on gender balance, and focused on developing the
skills our people need to realize new strategic elements.
OUR PEOPLE VALUE
Exceptional people join us from around the
world because of who we are—and then
they make us what we are. Committed to
customers, constantly learning and growing,
we thrive on the world’s biggest technical
challenges, wherever they are found. This is
the pulse and spirit of Schlumberger.
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PERFORM ANCE IN PRA CTICE
continued
Responding to COVID-19 with Speed and Scale
“
Our current gender
balance goal is to have
women comprise 25%
of our exempt workforce
by 2025."
Flexible Work Models
Almost half the company worked remotely in 2020, and we took
that opportunity to explore flexible working at scale. We initiated the
BlueFLEX program to examine flexibility around how, when, and where
we will work in the future, with the goal of enhancing employee
experience and productivity, which will lead to improved business
performance. At year end, ten pilot programs were ongoing in a mix
of operations bases and technology centers to understand how flexible
working will become a standard in the new normal.
Diversity & Inclusion
As we restructured, there was a systematic consideration for
Diversity & Inclusion. Among thousands of position changes during
the restructure—from executives to operations management—27%
were filled by women. This helped improve our gender balance by
8% in 2020. Women now represent 22.6% of Schlumberger salaried
employees worldwide.
People Development
This year did not halt the growth of our employees. Using technology
and evolving our capabilities has enabled our employees to continue
their career growth, advance their skills, and
continuously learn. Trainees who joined us during
the pandemic were enrolled in the COVID-19
Protection Plan that enabled them to progress
their training virtually while working from home.
This is strategically important to our talent
pipeline in the context of a dynamic business
environment. Those assigned to new positions
were also able to access virtual instructor-led
training, online modules, and facilitated networking,
accelerating their time to performance.
Moving Our
Work Home
6x 60,000 Users
96 countries in 10 days
Expanding VPN
at Scale
3x Load Increase
Over 2 weeks
Delivering Global
IT Support
1.5x 4,500 per day
Service requests increase in March
Accelerating
Collaboration
75x Users
Migrating to Microsoft Teams® in May and June
Performed by Schlumberger:
The Big Shift
T
This year, the Performed by Schlumberger CEO Award in the
Operations Excellence category went to the team from The Big Shift
project. The Operations Excellence category recognizes projects that
exemplify our agility and resilience in our operations while maintaining
e
our responsibility to all our stakeholders, the environment, and the
o
c
communities where we live and work. This team rapidly enabled a
peak of 60,000 people—six times the normal number of people who
worked remotely in Schlumberger—to have fully enabled remote
capabilities by the end of March. This achievement enabled business
continuity through the initial stages of the pandemic and is now the
“new normal” for thousands of Schlumberger employees worldwide.
Keeping Our
Employees Safe
Minimizing exposure and reducing
carbon emissions
Aligning to Customer Needs
Increasing remote operations and
tele-witnessing capabilities
Enabling Tele-working and
the New Normal
Keeping people working and collaborating
from anywhere at any time
Team members include Astride Blanchard
(project team leader), Maged Elmenshawy,
Anton Vydrin, Brett Walton, Terrell Tumis,
and Jean-Loup Bevierre.
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OPPO RTU N ITIES I N THE EN ERGY TR A N SI T I ON
Social Sustainability
Schlumberger has always recruited where we work, committing to a
sustainable presence in each country. Our people actively support and
engage with their communities, while we ensure our local social and
environmental priorities are aligned with specific United Nations
Sustainable Development Goals.
We continued to advance our social priorities as a participating member
of the United Nations Global Compact and are committed to implementing
its Ten Principles in the areas of human rights, labor, environment,
and anticorruption.
Environmental Performance
Our vision is to define and drive high performance, sustainably. We are
committed to being at the forefront of our industry’s shift toward more
sustainable energy production—challenging not only ourselves, but also
our customers, suppliers, and peers to partner on delivering measurable
social and environmental progress. We are working to reduce our own
environmental footprint and believe we are uniquely positioned to help
our customers reach their own sustainability goals.
Decarbonizing Oil and Gas Operations
Following our commitment to set a science-based emissions footprint
reduction target, the first such commitment among service companies
in exploration and production (E&P), work began with the Science Based
Targets initiative (SBTi) to define our targets for both our direct emissions
and those of key suppliers—including end products and services. This
target will be set in 2021 and validated externally by the SBTi.
Meanwhile, we set initial targets to reduce our total GHG emissions
from Scope 1 and 2 sources 30% by 2025. In 2020, we delivered a
14% reduction of our Scope 1 and 2 emissions intensity within one year.
Emissions intensity accounts for activity fluctuations, providing a more
comparable measure of progress. This puts us well on our path to our
stated 2025 total emissions reduction goal.
“
Our people represent
more than 160 nationalities
with expertise in over
120 countries."
SCOPE 1 & 2 GHG EMISSIONS
Our Scope 1 emissions
largely include fuel used
by our light and heavy
vehicles, while Scope 2
emissions include electricity
used by our facilities.
Installing solar power generation at
our Egypt Center of Efficiency saved
400 metric tons of CO2e.
This year, we reduced
our Scope 2 emissions
by approximately 13%,
which is equivalent to
78,000 metric tons of CO2.
Delivering Performance Sustainably
ALIGNING WITH UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
Social Focus
Environmental Focus
PRIORITIZING SUSTAINABILITY
IN OUR COMMUNITIES
To support the delivery of our integrated projects
with Cairn Oil & Gas, Vedanta Limited, in the
Barmer District in Rajasthan, India, Schlumberger
established a dedicated community relations team
to enhance our social performance capability
and integrate sustainable development into
project execution. Based on customer and
community engagement, Schlumberger is
implementing several social performance
programs in the district focused on United
Nations Sustainable Development Goals (SDGs)
that matter locally. In 2020, Schlumberger
supported Quality Education (SDG 4) by
partnering with the customer and local
administration to establish science and
technology centers and SMART classrooms
in 35 public schools across the Barmer District
to increase youth participation in STEM
activities. The program has directly impacted
over 7,000 students with the long-term objective
of improving talent and increasing diversity in
our local hiring pool.
IMPACT-REDUCING TECHNOLOGY
To support our customers in addressing their
environmental priorities, Schlumberger currently
offers a broad technology portfolio of more than
100 solutions with attributes that tie to the
six environmental SDGs. Our technologies
include a range of environmental impact-reducing
options aimed at:
• consuming fewer resources, including energy,
water, raw materials, and physical footprint
• generating fewer harmful by-products, including
emissions and waste
• leveraging digital
• enabling renewable energy use.
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OPPO RTUNITIES IN TH E ENERGY T RANS ITIO N
continued
We progressed on the adoption of both Task Force on Climate-Related
Financial Disclosures (TCFD) and Sustainability Accounting Standards
Board (SASB) frameworks to increase the transparency of our
environmental disclosures, resulting in a high-grading of our rating
in the CDP Climate Change assessment, to a peer-leading A minus.
Schlumberger is committed to developing innovative technologies
for our customers that enhance oilfield efficiency, reduce E&P costs,
improve productivity, maximize reserve recovery, and increase asset
value—all in a safe and environmentally sound manner.
Our global network of technology centers positions Schlumberger
to accelerate a diverse range of innovative technological approaches
to support oil and gas across the energy transition. Our broad portfolio
includes more than 100 impact-reducing technologies to help our
customers decrease their environmental footprint, use cleaner
chemistry, reduce waste, and decarbonize elements of the E&P process.
We are also at the forefront of the rapid transition to digital hardware,
artificial intelligence, and the detailed characterization and control of
all operations though the proliferation of sensing and actuation devices
on edge networks. Through targeted R&D investment, we use advanced
cloud and edge computing to rapidly develop and implement technologies
for operational efficiency. Significant reductions in operational footprint
are being achieved through remote operations and automation and control
systems. These systems are also reducing environmental impact and
enhancing safety by dramatically lowering the number of field crew
visits needed to keep assets at optimal performance.
USING AI AND EDGE SOLUTIONS TO
OPTIMIZE PERFORMANCE
In Ecuador, Schlumberger accelerated adoption
of digital solutions through its integrated
business model by implementing Agora*
edge AI and IoT solutions on its own Asset
Performance Solutions (APS) project.
By combining digital technologies within
an integrated environment, production
performance was increased while operational
and environmental footprint were reduced.
To solve production challenges with high
gas/oil ratio wells, Agora solutions were used
to deliver an automated electric submersible
pump (ESP) gas-handling process. Using a
securely connected, solar-powered skid running
predictive AI at the edge to optimize well and
ESP performance, production was increased
30% in wells connected by the Agora solution,
while reducing field crew visits to these wells
by 97%—an example of the performance made
possible by combining digital and integration.
A domain champion works with
the customer during the job,
using contextual insights from the
Ora platform in real time to update
the reservoir model.
Performed by Schlumberger:
Ora—The Dawn of a New Era
This year, the Performed by Schlumberger CEO Award in the Innovation category was awarded to
the team submitting the Ora—The Dawn of a New Era project. The Innovation category recognizes
projects that combine our unique team and technology performance to deliver market outperformance
and drive efficiency sustainably while capturing new growth opportunities. Ora* intelligent wireline
formation testing platform technology helps characterize reservoirs in much less time than other
methods and can confirm reserves offshore without the need to flare or produce hydrocarbons that
require disposal.
Team members include Ashers Partouche
Ora intelligent wireline formation testing platform.
(project team leader), Simon Edmundson,
Keith Nelson, Stephany Siswanto Handoyo,
and Chen Tao.
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OPPORTUNITIES IN THE ENE RGY TRANS ITION
continued
Schlumberger New Energy
We recognize that our future will expand beyond oil and gas with the
energy transition and are positioning ourselves for significant long-term
growth opportunities. We launched Schlumberger New Energy this
year to explore new businesses in low-carbon or carbon-neutral energy
technologies. Our approach is to apply our domain expertise in areas
adjacent to our existing activities and use our global footprint and
execution platform to deliver at scale.
We are using partnership models and our experience in technology
industrialization to expand into energy verticals beyond oil and gas.
Our diverse New Energy portfolio includes ventures in geothermal
and carbon capture and sequestration (CCS)—where we bring decades
of project experience to a growing market—and geoenergy, clean
hydrogen, and lithium, where we work on breakthrough technologies
for new markets.
As examples, this year we made significant progress in the
following ventures:
Celsius Energy
Celsius Energy combines in-house technology, proprietary design
optimization, and modern digital control systems to offer a
fit-for-purpose solution for heating and cooling buildings. Our solution
can reduce the associated CO2 emissions from buildings by as much
as 90%. Celsius completed its first project, heating 3,000-square-
meters of facilities on the Schlumberger Clamart campus with clean
geothermal power.
“
The first Celsius installation has already resulted
in a 90% reduction of CO2 emissions and a
40% reduction of operational costs."
Through a proprietary small-footprint
network of shallow wells, combined with a
heat exchange system, the Celsius solution
heats and cools buildings.
Genvia
Genvia is a clean hydrogen production technology venture
with the French Alternative Energies and Atomic Energy
Commission (CEA) and partners. In a unique private-public
partnership model, Genvia combines the expertise and experience
of Schlumberger with CEA and partners. The new venture will
accelerate the development and the first industrial deployment of the
CEA high-temperature reversible solid-oxide electrolyzer technology.
The aim of the venture is to deliver the most efficient and cost-effective
technology for producing clean hydrogen, a versatile energy carrier and
key component of the energy transition.
GeoFrame Energy
We launched GeoFrame Energy with Thermal Energy
Partners (TEP). This venture combines Schlumberger
subsurface and drilling expertise with TEP’s experience
in project development and risk mitigation to develop
geothermal power projects. The company’s first project
is the 10-MW Nevis Geothermal Power Project, which
will enable the island of Nevis to transition to
zero-emission renewable energy. GeoFrame Energy
has additional opportunities to expand production in the
Eastern Caribbean and in North and South America.
Genvia technology design aims to reach a
30% higher electricity conversion efficiency
per kilogram of hydrogen produced.
The launch of New Energy opens an exciting chapter for the company, a
chapter with diversified growth in new market verticals, building on the
Schlumberger intellectual capital and unique international franchise.
In the Caribbean, the Federation of Saint Kitts
and Nevis is committed to reduce the cost
of electricity to its citizens. GeoFrame
Energy, in partnership with the Nevis Island
Administration, is accompanying the state
every step of the way.
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2020 Form 10-K
Schlumberger Limited
We entered 2020 with a well-defined strategy that proved resilient
as the pandemic unfolded, leading to the acceleration of our strategy
execution—and the reinvention of Schlumberger. Our people
delivered exceptional performance, enabled by our technology and
new, agile organization, creating a sustainable platform to capitalize
on growth drivers in the new energy landscape.
Schlumberger is on a new performance journey with attractive,
yet resilient returns and exciting growth prospects—in and
beyond our core industry.
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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, 2020
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
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
SLB
New York Stock 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 every Interactive Data File required to be submitted 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 such files.) YES Í NO ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging
growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘ Emerging growth company ‘
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ‘
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. È
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, 2020, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $25.50 billion.
As of December 31, 2020, the number of shares of common stock outstanding was 1,392,325,960.
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 incorporated by reference from, Schlumberger’s definitive
proxy statement for its 2021 Annual General Meeting of Stockholders, to be filed by Schlumberger with the Securities and Exchange Commission (“SEC”)
pursuant to Regulation 14A within 120 days after December 31, 2020 (the “2021 Proxy Statement”).
26
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SCHLUMBERGER LIMITED
Table of Contents
Form 10-K
PART I
Item 1. Business.
PART I
Page
All references in this report to “Registrant,” “Company,” “Schlumberger,” “we” or “our” are to Schlumberger
Limited (Schlumberger N.V.) and its consolidated subsidiaries.
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Item 1A.
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 1B.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Schlumberger is a technology company that partners with customers to access energy by providing leading
digital solutions and deploying innovative technologies to enable performance and sustainability for the global
energy industry. Schlumberger collaborates to create technology that unlocks access to energy for the benefit of
all.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Market for Schlumberger’s Common Stock, Related Stockholder Matters and Issuer Purchases
of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . 21
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Item 8.
Item 9.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . 90
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Item 9B.
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
PART III
Item 10.
Directors, Executive Officers and Corporate Governance of Schlumberger
. . . . . . . . . . . . . . . . . 92
Item 11.
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Item 13.
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . 92
Item 14.
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
PART IV
Item 15.
Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Item 16.
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Certifications
Organizational Structure
During 2020, Schlumberger restructured its organization in order to prepare for a changing industry future. This
new structure is aligned with customer workflows and is directly linked to Schlumberger’s corporate strategy, a
key element of which is customer collaboration.
The new organization consists of four Divisions that combine and integrate Schlumberger’s technologies,
enhancing the portfolio of capabilities that support the emerging long-term growth opportunities in each of these
market segments.
The four Divisions are:
•
•
Digital & Integration
Reservoir Performance
• Well Construction
•
Production Systems
The role of the Divisions is to support Schlumberger in executing its customer-centric performance strategy and
maintaining its industry leadership role in technology development and services integration. The Divisions are
collectively responsible for driving performance throughout
respective business lines; overseeing
operational processes, resource allocation and personnel; and delivering superior financial results.
their
Digital & Integration – Combines Schlumberger’s software and seismic businesses with its integrated offering
of Asset Performance Solutions (“APS”). APS helps develop or redevelop fields while increasing production,
improving cash flow, and extending recovery for customers by providing fit-for-purpose solutions. Through
digital solutions and technologies, supported by the future of software, digital, infrastructure, connected assets,
and data, this Division enhances efficiency to improve asset and enterprise-wide performance for customers.
The primary offerings comprising this Division are:
• Multiclient seismic surveys and data processing: WesternGeco® is a leading geophysical services
supplier, providing comprehensive worldwide reservoir interpretation and data processing services. It
provides a highly efficient and scientifically advanced imaging platform to its customers. Through
access to the industry’s global marine fleet, it provides innovative and accurate subsurface imagery for
multiclient surveys. WesternGeco offers one of the industry’s most extensive multiclient libraries.
•
Digital solutions: Includes proprietary software, an expanding digital ecosystem, consulting services,
information management and IT infrastructure services to customers in the energy industry. Offers
expert consulting services for reservoir characterization, field development planning and production
enhancement, as well as industry-leading petrotechnical data services and training solutions.
2
3
•
Asset Performance Solutions: APS offers an integrated business model for field production projects.
This model combines Schlumberger’s services and products with drilling rig management and
specialized engineering and project management expertise, to provide a complete solution to well
construction and production improvement.
APS creates alignment between Schlumberger and the asset holder and/or the operator by Schlumberger
receiving remuneration in line with its value creation. These projects are generally focused on developing
and co-managing production of customer assets under long-term agreements. Schlumberger invests its own
services and products and, in certain historical 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 on cash flow generated or on a
fee-per-barrel basis. This includes certain arrangements whereby Schlumberger is only compensated based
on incremental production that it helps deliver above a mutually agreed baseline.
Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to optimizing
reservoir productivity and performance. Reservoir Performance develops and deploys innovative technologies
and services to evaluate, intervene, and stimulate reservoirs that help customers understand subsurface assets and
maximize their value.
The primary offerings comprising this Division are:
• Wireline: Provides the information necessary to evaluate subsurface geology and fluids to plan and
monitor well construction and to monitor and evaluate well production. Offers both openhole and cased-
hole services, including wireline logging and perforating.
•
•
Testing: Provides exploration and production pressure and flow-rate measurement services both at the
surface and downhole. Testing has a network of laboratories that conduct formation and fluid
characterization.
Stimulation and Intervention: Provides services used during well completions, as well as those used to
maintain optimal production throughout the life of a well. Includes pressure pumping, well stimulation,
and coiled tubing equipment for downhole mechanical well intervention, reservoir monitoring, and
downhole data acquisition.
On December 31, 2020, Schlumberger contributed its onshore hydraulic fracturing business in the United States
and Canada (“OneStim®”), including its pressure pumping, pumpdown perforating, and Permian frac sand
businesses, to Liberty Oilfield Services Inc. (“Liberty”), in exchange for a 37% equity interest in Liberty.
OneStim’s historical results were reported as part of the Reservoir Performance Division through the closing of
the transaction.
Well Construction – Combines the full portfolio of products and services to optimize well placement and
performance, maximize drilling efficiency, and improve wellbore assurance. Well Construction provides
operators and drilling rig manufacturers with services and products related to designing and constructing a well.
The primary offerings comprising this Division are:
•
•
•
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.
Drilling Fluids: Supplies individually engineered drilling fluid systems that
performance and maintain well control and wellbore stability throughout the drilling operation.
improve drilling
Drill Bits: Designs, manufactures and markets roller cone and fixed cutter drill bits for all environments.
•
Drilling Tools: Includes a wide variety of bottom-hole-assembly and borehole-enlargement technologies
for drilling operations.
• Well Cementing: Supports and protects well casings while isolating fluid zones and maximizing
wellbore activity.
•
•
Integrated Well Construction: Provides integrated solutions to construct or change the architecture
(re-entry) of wells,
logistics,
procurement and contracting of third parties, and drilling rig management.
including well planning, well drilling, engineering, supervision,
Rigs and Equipment: Provides drilling equipment and services for shipyards, drilling contractors, energy
companies and rental tool companies, as well as land drilling rigs and related services. Drilling
equipment falls into two broad categories: pressure control equipment and rotary drilling equipment.
These products are designed for either onshore or offshore applications and include drilling equipment
packages, blowout preventers (“BOPs”), BOP control systems, connectors, riser systems, valves and
choke manifold systems, top drives, mud pumps, pipe handling equipment, rig designs and rig kits.
Production Systems – Develops technologies and provides expertise that enhance production and recovery from
subsurface reservoirs to the surface,
into pipelines, and to refineries. Production Systems provides a
comprehensive portfolio of equipment and services including subsurface production systems, subsea and surface
equipment and services, and midstream production systems.
The primary offerings comprising this Division are:
•
•
•
•
•
•
Artificial Lift: Provides production equipment and optimization services using electrical submersible
pumps, gas lift equipment, progressing cavity pumps and surface horizontal pumping systems.
Completions Equipment: Supplies well completion services and equipment that include packers, safety
valves and sand control technology, as well as a range of intelligent well completions technology and
equipment.
OneSubsea®: Provides integrated solutions, products, systems and services for the subsea market,
including integrated subsea production systems involving wellheads, subsea trees, manifolds and
flowline connectors, control systems, connectors and services designed to maximize reservoir recovery
and extend the life of each field.
Surface: Designs and manufactures onshore and offshore platform wellhead systems and processing
solutions, including valves, chokes, actuators and Christmas trees, and provides services to operators.
Valves: Serves portions of the upstream, midstream and downstream markets and provides valve
products that are primarily used to control and direct the flow of hydrocarbons as they are moved from
wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical
plants and industrial centers for processing.
Processing: Enables efficient monetization of subsurface assets using standard and custom-designed
onshore, offshore and downstream processing and treatment systems, as well as unique, reservoir-
driven, fit for purpose integrated production systems for accelerating first production and maximizing
project economics.
Supporting the Divisions is a global network of research and engineering centers, through which Schlumberger
advances its technology programs to enhance industry efficiency and sustainability, lower finding and producing
costs, improve productivity, maximize reserve recovery and increase asset value, while accomplishing these
goals safely.
The Divisions are deployed around a geographical structure of five Basins: Americas Land, Offshore Atlantic,
Middle East and North Africa, Asia, and Russia and Central Asia. The Basins are a collection of GeoUnits,
4
5
which consist of a single country to several countries, that each have common themes in terms of strategy,
economic and operational drivers, and technology needs. With a strong focus on the customer and growth, the
Basins are responsible for defining a Basin strategy in line with Schlumberger’s corporate strategy and
identifying opportunities for future growth.
Corporate Strategy
Schlumberger’s ambition is to be its customers’ “performance partner” of choice, by putting the customer at the
center of everything it does and by being the company that defines performance in the energy services industry.
Schlumberger’s strategy is structured around three major themes: (i) strengthen the core; (ii) expand the
go-to-market; and (iii) next horizons of growth.
Strengthen the Core
Strengthening the core is focused on developing our people, collaborating with our customers and enhancing our
technology performance to enable Schlumberger’s vision of customer performance. Maintaining capital
discipline is also a key element of strengthening the core—such as evaluating all investment decisions through
the lens of return on capital rather than growth and evolving certain businesses into innovative models that are
less capital intensive.
Expand the Go-to-Market
Schlumberger believes that a key shift in the industry is the greater prominence and interplay of regional, or
basin-specific, supply and demand. The industry is witnessing a decoupling of the activity characteristics of each
major region, resulting in a unique set of dynamics for each oil and gas basin across the world.
There are four main regions increasingly competing against each other for market access to meet global, regional
and domestic energy demand: North America Land; Middle East; Russia and Central Asia; and offshore. These
regions correspond to a different set of resource plays or basins, each facing different economic and operational
drivers, which translates into different activity levels and cycles. Current geopolitical uncertainties and trade
conflicts will only amplify this trend, resulting in the transition from a global market toward a more localized
supply and demand dynamic.
As basins around the world decouple, a key differentiator for Schlumberger will be its “fit-for-basin” approach
and ability. Basins have significantly different dynamics, including technological needs, in-country value, and
market or technology access. Schlumberger is developing and deploying basin-specific technology that helps its
customers overcome the challenges of their respective regions. In-country value enables regional efficiency and
performance, while increasing local content and aligning with the strategic priorities of our clients.
Additionally, by employing different business models, Schlumberger will evolve the way it goes to market in
certain regions. Schlumberger will seek to monetize its technology advantage by deploying alternative operating
models such as selling or leasing selected technologies to regional service providers with a license to operate in
these specific markets. Schlumberger expects this approach to expand its total addressable market.
Next Horizons of Growth
Schlumberger’s history and culture have been based on leadership, science and innovation since its founders
invented wireline logging as a technique for obtaining downhole data in oil and gas wells. Continuing this
tradition, Schlumberger will focus its future growth in two areas: digital innovation and new energy.
elevate performance. To take the next step in performance that our customers need to deliver energy in today’s
competitive environment, Schlumberger is developing and using digital solutions, focused on generating richer
data and better insights, that will achieve performance not previously possible across the energy industry.
Schlumberger is leveraging its portfolio of proprietary digital technologies as well as technologies that have
transformed other industries to enable our customers to make better and faster decisions. Integrating digital
technology into exploration and production (“E&P”) workflows requires extensive domain expertise in upstream
hardware and software technologies and in the management and interpretation of vast amounts of subsurface and
production data. Schlumberger will continue to lead the digital transformation of the energy industry by applying
its unique data and digital expertise to every facet of the E&P life cycle.
Through its New Energy portfolio, Schlumberger is investing in low carbon and carbon-neutral energy
technologies that will provide a platform for future sustainable growth. Schlumberger recognizes that its future
will expand beyond oil and gas with the energy transition, and consequently the Company is positioning for
significant growth opportunities for the long term. Schlumberger New Energy is taking a business venture
approach that will focus on energy efficiency and energy storage as a priority, aimed at developing unique
positions in adjacent markets and introducing breakthrough technologies in energy verticals beyond oil and gas.
Schlumberger will utilize its domain expertise in areas adjacent to its existing activities where it can deliver at
scale with its global footprint and execution platform.
Human Capital
At December 31, 2020, Schlumberger employed approximately 86,000 people representing more than 160
nationalities.
Schlumberger believes that the diversity of its workforce is one of its greatest strengths and aims to maintain its
employee population diversity in proportion to the revenue derived from the countries in which it works.
2020 Revenue Contribution
2020 Nationality Mix
Others
1%
North
America
23%
Middle
East
and
Asia
36%
Latin
America
15%
Europe,
CIS and
Africa
25%
North
America
23%
Latin
America
9%
Middle
East and
Asia 36%
Europe,
CIS,
Africa 32%
Schlumberger recognizes that its ability to attract, develop, motivate and retain a highly competent and diverse
workforce has been key to its success for many decades. As a service company, Schlumberger believes it is
critical for its people to communicate with its customers in their native languages and to share the values of the
people in the countries where it works. Furthermore, Schlumberger’s diverse workforce is better able to respond
to, and deliver services and products that meet the unique expectations and requirements of, its stakeholders,
including customers, suppliers and stockholders. Schlumberger’s long-standing commitment to national and
cultural diversity fosters a culture that is global in outlook, yet local in practice, which permeates every layer of
the Company.
Schlumberger seeks to define the future of digital technology in the energy industry. The application of digital
technology in field operations has the potential to deliver a step-change in operational workflows to significantly
In addition to national and cultural diversity, achieving improved gender balance has been a focus of policy and
action in Schlumberger since the late 1970s, when it began recruiting women for field operations roles. Since
6
7
then, Schlumberger has continued to expand opportunities for women across its field operations, technology,
business and management roles. Schlumberger believes that these gender diversity initiatives help it maintain its
competitive advantage.
Schlumberger set its first gender balance target in 1994, with the goal of having women comprise 15% of its
salaried workforce by 2015. This goal was achieved ahead of schedule in 2011. Schlumberger’s current gender
balance goal is to have women comprise 25% of the Company’s salaried workforce by 2025. In 2020, women
made up approximately 23% of the Company’s salaried employee population. Additionally, approximately 21%
of management roles were held by women in 2020.
Schlumberger is proud of its meritocratic culture, its commitment to early responsibility and internal promotion,
and its “borderless career” philosophy. Schlumberger strives to identify top talent within the Company, and to
provide opportunities for employees who demonstrate exceptional competency and performance to progress to
higher levels within the organization. Schlumberger seeks to nurture its talent pool to maximize each employee’s
developmental potential through a combination of training and experience. Schlumberger’s “borderless career”
philosophy means it supports flexible career paths, helping employees develop their skills across different
functions, businesses and geographies. These opportunities accelerate career development while fostering an
agile workforce and the next generation of business leaders.
Competition
The principal methods of competition within the energy services industry are technological innovation, quality of
service and price differentiation. These vary geographically with respect to the different services and products
that Schlumberger offers. Schlumberger has numerous competitors, both large and small.
Intellectual Property
Schlumberger owns and controls a variety of intellectual property,
limited to patents,
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 material to Schlumberger’s business.
including but not
Seasonality
Seasonal changes in weather and significant weather events can temporarily affect
the delivery of
Schlumberger’s products and 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 can temporarily reduce 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 may result in higher activity in the fourth quarter of each year as clients
seek to fully utilize their annual budgets. Conversely, customer budget constraints may lead to lower demand for
our services and products in the fourth quarter of each year.
Customers
Schlumberger’s primary customers are national oil companies, large integrated oil companies and independent
operators. No single customer exceeded 10% of Schlumberger’s consolidated revenue during each of 2020, 2019
and 2018.
Governmental Regulations
Schlumberger is subject to numerous environmental, legal and other governmental and regulatory requirements
related to its operations worldwide. For additional details, see “Item 1(a). Risk Factors—Legal and Regulatory
Risks”, which is incorporated by reference in this Item 1.
Corporate Information
Schlumberger was founded in 1926 and is incorporated under the laws of Curaçao. Schlumberger has executive
offices in Paris, Houston, London and The Hague.
Available Information
The Schlumberger 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 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, 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 SEC. Alternatively, you may access these reports at the SEC’s 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 its 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.
Information About Our Executive Officers
The following table sets forth, as of January 27, 2021, the names and ages of the executive officers of
Schlumberger, including all offices and positions held by each for the past five years.
Name
Age Current Position and Five-Year Business Experience
Olivier Le Peuch
57
Stephane Biguet
52
Khaled Al Mogharbel
50
Chief Executive Officer and Director, since August 2019; Chief Operating
Officer, February 2019 to July 2019; Executive Vice President, Reservoir and
Infrastructure, May 2018 to February 2019; President, Cameron Group, February
2017 to May 2018; and President, Completions, October 2014 to January 2017.
Executive Vice President and Chief Financial Officer, since January 2020; Vice
President, Finance, December 2017 to January 2020; Vice President, Treasurer,
December 2016 to November 2017; Vice President, Controller, November 2013
to December 2016.
Executive Vice President, Geographies, since July 2020; Executive Vice
President, Operations, April 2019 to June 2020; Executive Vice President,
Eastern Hemisphere, February 2019 to March 2019; President, Eastern
Hemisphere, May 2017 to January 2019; and President, Drilling Group, July
2013 to April 2017.
Ashok Belani
62
Executive Vice President, Schlumberger New Energy, since February 2020; and
Executive Vice President, Technology, January 2011 to January 2020.
8
9
Name
Age Current Position and Five-Year Business Experience
Item 1A. Risk Factors.
Hinda Gharbi
50
Abdellah Merad
47
Executive Vice President, Services and Equipment, since July 2020; Executive
Vice President, Reservoir and Infrastructure, February 2019 to June 2020; Vice
President, Human Resources, May 2018 to January 2019; President, Reservoir
Characterization Group, June 2017 to May 2018; and President, Wireline, July
2013 to May 2017.
Executive Vice President, Performance Management, since May 2019; President
NAL Production Group, May 2018 to April 2019; President, Production Group,
October 2017 to May 2018; Vice President, Controller, Operations, December
2016 to September 2017; and Vice President, Global Shared Services
Organization, November 2013 to December 2016.
Pierre Chereque
66 Vice President and Director of Taxes, since June 2017; and Director of Taxes,
Operations, July 2004 to May 2017.
Kevin Fyfe
47 Vice President and Controller, since October 2017; Controller, Cameron Group,
April 2016 to October 2017; and Vice President, Finance, OneSubsea, July 2013
to March 2016.
Howard Guild
49
Chief Accounting Officer, since July 2005.
Claudia Jaramillo
48 Vice President and Treasurer, since December 2017; ERM and Treasury Projects
Manager, July 2017 to November 2017; and Controller, North America Area,
July 2014 to July 2017.
Alexander C. Juden
60
Secretary, since April 2009; and General Counsel, April 2009 to November 2020.
Vijay Kasibhatla
57 Director, Mergers and Acquisitions, since January 2013.
Saul R. Laureles
55 Director, Corporate Legal Affairs, since July 2014; and Assistant Secretary, since
April 2007.
Demosthenis Pafitis
53
Dianne Ralston
54
Chief Technology Officer,
since February 2020; Senior Vice President,
Schlumberger 4.0 Platforms, from December 2017 to January 2020; and Vice
President, Engineering, Manufacturing and Sustaining, September 2014 to
December 2017.
Chief Legal Officer, since December 2020; Executive Vice President, Chief
Legal Officer and Secretary, TechnipFMC plc, January 2017 to October 2020;
and Senior Vice President, General Counsel and Secretary, FMC Technologies,
Inc., January 2015 to January 2017.
Gavin Rennick
46 Vice President, Human Resources, since February 2019; President, Software
Integrated Solutions, January 2017 to February 2019; and M&A/Integration
Manager, Cameron International, September 2015 to January 2017.
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, which discuss the material factors that make an
investment in our securities speculative or risky, 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. Additional risks and
uncertainties not currently known to us or that we currently deem immaterial may also materially adversely
affect our business, reputation, financial condition, results of operations, cash flows and prospects.
Business and Operational Risks
Demand for our products and services is substantially dependent on the levels of expenditures by our
customers. The current significant oil and gas industry downturn has resulted in reduced demand for
oilfield services and lower expenditures by our customers, which has had, and may continue to have, a
material adverse effect on our financial condition, results of operations and cash flows.
Demand for our products and services depends substantially on expenditures by our customers for the
exploration, development and production of oil and natural gas reserves. These expenditures are generally
dependent on our customers’ views of future oil and natural gas prices, as well as their ability to access capital.
These expenditures are also sensitive to our customers’ views of future economic growth and the resulting impact
on demand for oil and natural gas.
The continued low oil and gas prices have also caused a reduction in cash flows for our customers, which has had
a significant adverse effect on the financial condition of some of our customers. This has resulted in, and may
continue to result in, lower capital expenditures, project modifications, delays or cancellations, general business
disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us. These effects have had,
and may continue to have, a material adverse effect on our financial condition, results of operations and cash
flows.
Historically, oil and natural gas prices have experienced significant volatility and can be affected by a variety of
factors, including:
•
•
•
•
•
•
•
•
changes in the supply of and demand for hydrocarbons, which are affected by general economic and
business conditions, as well as increased demand for (and availability of) alternative energy sources and
electric vehicles;
the ability or willingness of the Organization of Petroleum Exporting Countries and 10 other oil
producing countries,
to set and maintain
including Russia, Mexico and Kazakhstan (“OPEC+”),
production levels for oil;
oil and gas production levels in the United States and by other non-OPEC+ countries;
changes in the level of demand resulting from actual or threatened public health emergencies, such as
the COVID-19 pandemic, or from other events affecting the level of economic activity;
political and economic uncertainty and geopolitical unrest;
the level of excess production capacity;
the level of global oil and gas exploration and production activity;
the level of global oil and natural gas inventories;
10
11
•
•
•
•
•
•
•
access to potential resources;
governmental policies and subsidies;
the costs of exploring for, producing and delivering oil and gas;
speculation as to the future price of oil and the speculative trading of oil and natural gas futures
contracts;
government initiatives to promote the use of renewable energy sources and public sentiment regarding
alternatives to oil and gas;
technological advances affecting energy consumption; and
weather conditions.
The oil and gas industry has historically been extremely cyclical. However, there can be no assurance that the
demand or pricing for oil and natural gas or for our products and services will follow historic patterns or recover
meaningfully in the near or medium term. Continued or worsening conditions in the oil and gas industry
generally may have a further material adverse effect on our business, financial condition, results of operations,
cash flows and prospects.
The COVID-19 pandemic has significantly reduced demand for our services, and has had, and is likely to
continue to have, a material adverse effect on our financial condition, results of operations and cash flows.
The effects of the COVID-19 pandemic, including actions taken by businesses and governments to contain the
spread of the virus, have resulted in a significant and swift reduction in international and US economic activity.
In our industry, geopolitical events that increased the supply of low-priced oil to the global market occurred at
the same time that demand weakened due to the worldwide effects of the pandemic, leading to a collapse in oil
prices in March 2020. These events together adversely affected the demand for oil and natural gas, as well as for
our services and products, and caused significant volatility and disruption of the global financial markets. Other
effects of the pandemic have included, and may continue to include, adverse revenue and net income effects;
disruptions to our operations, including suspension or deferral of drilling activities; customer shutdowns of oil
and gas exploration and production; downward revisions to customer budgets; limitations on access to sources of
liquidity; employee impacts from illness, school closures and other community response measures; workforce
reductions in response to activity declines; and temporary closures of our facilities or the facilities of our
customers and suppliers. This period of extreme economic disruption, low oil prices and reduced demand for our
products and services has had, and is likely to continue to have, a material adverse effect on our financial
condition, results of operations and cash flows.
The extent to which our operating and financial results will continue to be affected by the COVID-19 pandemic
will depend on various factors and consequences beyond our control, such as the duration and scope of the
pandemic; additional actions by businesses and governments in response to the pandemic; and the speed and
effectiveness of responses to combat the virus, including vaccine development and distribution. COVID-19, and
the volatile regional and global economic conditions stemming from the pandemic, could also aggravate our
other risk factors described in this Form 10-K.
A significant portion of our revenue is derived from our non-US operations, which exposes us to risks
inherent in doing business in the more than 120 countries in which we generate revenue.
Our non-US operations accounted for approximately 81% of our consolidated revenue in 2020, 72% in 2019 and
68% in 2018. In addition to the risks addressed elsewhere in this section, our operations in countries other than
the United States are subject to various risks, including:
•
•
uncertain or volatile political, social and economic conditions;
exposure to expropriation, nationalization, deprivation or confiscation of our assets or the assets of our
customers, or other governmental actions;
•
•
•
•
•
•
•
•
•
•
•
•
social unrest, acts of terrorism, war or other armed conflict;
public health crises and other catastrophic events, such as the COVID-19 pandemic;
confiscatory taxation or other adverse tax policies;
theft of, or lack of sufficient legal protection for, proprietary technology and other intellectual property;
deprivation of contract rights;
trade and economic sanctions or other restrictions imposed by the European Union, the United States or
other regions or countries;
exposure under the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act or similar anti-
bribery and anti-corruption legislation;
unexpected changes in legal and regulatory requirements,
enforcement of existing laws;
including changes in interpretation or
restrictions on the repatriation of income or capital;
currency exchange controls;
inflation; and
currency exchange rate fluctuations and devaluations.
Severe weather, including extreme weather conditions associated with climate change, has in the past and
may in the future adversely affect our operations and financial results.
Our business has been, and in the future will be, affected by severe weather in areas where we operate, which
could materially affect our operations and financial results. Extreme weather conditions such as hurricanes,
flooding and landslides have in the past resulted in, and may in the future result in, the evacuation of personnel,
stoppage of services and activity disruptions at our facilities, in our supply chain, or at well-sites. Particularly
severe weather events affecting platforms or structures may result in a suspension of activities. In addition,
impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall and
hurricane-strength winds may damage our facilities. Any such extreme weather-related events may result in
increased operating costs or decreases in revenue which could adversely affect our financial condition, results of
operations and cash flows.
Legal and Regulatory Risks
Our operations require us to comply with numerous laws and regulations, violations of which could have a
material adverse effect on our operations, financial condition or cash flows.
Our operations are subject to international, regional, national, and local laws and regulations in every place
where we operate, relating to matters such as environmental protection, health and safety, labor and employment,
import/export controls, currency exchange, bribery and corruption, data privacy and cybersecurity, intellectual
property, immigration, and taxation. These laws and regulations are complex, frequently change, and have tended
to become more stringent over time. In the event the scope of these laws and regulations expands in the future,
the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash
flows.
Our international operations are subject to anti-corruption and anti-bribery laws and regulations, such as the
FCPA, the U.K. Bribery Act and other similar laws. We are also subject to trade control regulations and trade
sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with
certain persons. Our ability to transfer people, products and data among certain countries is subject
to
maintaining required licenses and complying with these laws and regulations.
12
13
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 or from material violations of applicable laws and
regulations. Any determination that we have violated or are responsible for violations of anti-bribery, trade
control, trade sanctions or anti-corruption laws could have a material adverse effect on our financial condition.
Violations of international and US laws and regulations or the loss of any required licenses may result in fines
and penalties, criminal sanctions, administrative remedies or restrictions on business conduct, and could have a
material adverse effect on our business, operations and financial condition. In addition, any major violations
could have a significant effect on our reputation and consequently on our ability to win future business and
maintain existing customer and supplier relationships.
Demand for our products and services could be reduced by existing and future legislation, regulations and
public sentiment.
Regulatory agencies and environmental advocacy groups in the European Union, the United States and other
regions or countries have been focusing considerable attention on the emissions of carbon dioxide, methane and
other greenhouse gases and their role in climate change. There is also increased focus, including by governments
and our customers, investors and other stakeholders, on these and other sustainability and energy transition
matters. Existing or future legislation and regulations related to greenhouse gas emissions and climate change, as
well as initiatives by governments, non-governmental organizations, and companies to conserve energy or
promote the use of alternative energy sources, and negative attitudes toward or perceptions of fossil fuel products
and their relationship to the environment, may significantly curtail demand for and production of oil and gas in
areas of the world where our customers operate, and thus reduce future demand for our products and services.
This may, in turn, adversely affect our financial condition, results of operations and cash flows. Our business,
reputation and demand for our stock could be negatively affected if we do not (or are perceived to not) act
responsibly with respect to sustainability matters.
Environmental compliance costs and liabilities arising as a result of environmental laws and regulations
could have a material adverse effect on our business, financial condition and results of operations.
We are subject to numerous laws and regulations relating to environmental protection, including those governing
air emissions, water discharges and waste management, as well as the importation and use of hazardous
materials, radioactive materials, chemicals and explosives. We incur, and expect to continue to incur, significant
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
sometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public
health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault.
Some environmental laws provide for joint and several strict liability for remediation of spills and releases of
hazardous substances, and, as a result, we could be liable for the actions of others.
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 or changing interpretations of existing laws and regulations, the enactment of 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 for new or increased liabilities that could have a
material adverse effect on our business, operations and financial condition.
We could be subject to substantial liability claims, including well incidents, which could adversely affect
our reputation, 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 operations involve production-related activities, radioactive materials, chemicals,
explosives and other equipment and services that are deployed in challenging exploration, development and
production environments. Accidents or acts of malfeasance involving these services or equipment, or a failure of
a product (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or
destruction of property, equipment or the environment, or suspension of operations, which could materially
adversely affect us. Any well incidents, including blowouts at a well site, may expose us to additional liabilities,
which could be material. Generally, we rely on contractual indemnities, releases, and limitations on liability with
our customers and insurance to protect us from potential liability related to such events. However, our insurance
may not protect us against liability for certain 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 subject to substantial deductibles, could adversely affect
our financial condition, results of operations and cash flows.
Intellectual Property and Technology Risks
If we are unable to maintain technology leadership, this could adversely affect any competitive advantage
we hold.
The oilfield services industry is highly competitive. Our business may be adversely affected if we fail to continue
to develop and produce competitive technologies in response to changes in the market, customer requirements
and technology trends (including trends in favor of emissions-reducing technologies), or if we fail to deliver such
technologies to our customers in a timely and cost-competitive manner in the various markets we serve. If we are
unable to maintain technology leadership in our industry, our ability to maintain market share, defend, maintain
or increase prices for our products and services, and negotiate acceptable contract terms with our customers
could be adversely affected. Furthermore, if our equipment or proprietary technologies become obsolete, the
value of our intellectual property may be reduced, which could adversely affect our financial condition, results of
operations and cash flows.
Limitations on our ability to obtain, maintain, protect or enforce our intellectual property rights, including
our trade secrets, could cause a loss in revenue and any competitive advantage we hold.
There can be no assurance that the steps we take to obtain, maintain, protect and enforce our intellectual property
rights will be adequate. 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 when 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.
Patent protection on some types of technology, such as software or machine learning processes, may not be
available in certain countries in which we operate. Our competitors may also 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.
Third parties may claim that we have infringed upon, misappropriated or otherwise violated their
intellectual property rights.
The tools, techniques, methodologies, programs and components we use to provide our services and products
may infringe upon, misappropriate or otherwise violate the intellectual property rights of others or be challenged
on that basis. Regardless of the merits, any such claims generally result in significant legal and other costs,
including reputational harm, and may distract management from running our business. Resolving such claims
could increase our costs, including through royalty payments to acquire licenses, if available, from third parties
and through the development of replacement technologies. If a license to resolve a claim 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.
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15
Failure to obtain and retain skilled technical personnel could impede our operations.
Item 4. Mine Safety Disclosures.
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.
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 and technology
evolves. In periods of high utilization, it is often more difficult to find and retain qualified individuals. This could
increase our costs or have other material adverse effects on our operations.
Our operations are subject to cyber incidents that could have a material adverse effect on our business,
financial condition and results of operations.
We are increasingly dependent on digital technologies and services to conduct our business. We use these
technologies for internal purposes, including data storage, processing and transmissions, as well as in our
interactions with our business associates, such as customers and suppliers. In addition, we develop software and
other digital products and services that store, retrieve, manipulate and manage our customers’ information and
data, external data, and our own data. Our digital technologies and services, and those of our business associates,
are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected
for a period of time despite efforts to detect and respond to them in a timely manner. 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 material consequences arising from such incidents or attacks, or to avoid a material adverse
impact on our systems after such incidents or attacks do occur. We have experienced and will continue to
experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting
from phishing emails and ransomware infections. Even if we successfully defend our own digital technologies
and services, we also rely on third-party business associates, with whom we may share data and services, to
defend their digital technologies and services against attack.
We could suffer significant damage to our reputation if a cyber incident or attack were to allow unauthorized
access to or modification of our customers’ data, other external data, or our own data, or if the services we
provide to our customers were disrupted, or if our digital products or services were reported to have or were
perceived as having security vulnerabilities. This could lead to fewer customers using our digital products and
services, which could have a material adverse impact on our financial condition and results of operations. In
addition, if our systems, or our third-party business associates’ systems, for protecting against cybersecurity risks
prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to intellectual
property, proprietary or confidential information, or customer, supplier, or employee data; interruption of our
business operations; increased legal and regulatory exposure and costs; and increased costs required to prevent,
respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with
our employees, business associates and other third parties, and may result in claims against us. The occurrence of
any of these risks could have a material adverse effect on our business, financial condition and results of
operations.
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, and other facilities throughout the world, none of which are individually
material.
Item 3. Legal Proceedings.
The information with respect to this Item 3. Legal Proceedings is set forth in Note 15—Contingencies, in the
accompanying Consolidated Financial Statements.
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17
PART II
Item 5. Market for Schlumberger’s Common Stock, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
As of December 31, 2020,
for
Schlumberger’s common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol
“SLB.”
there were 24,592 stockholders of
record. The principal US market
program as of December 31, 2020 but did not repurchase any of its common stock during the three months ended
December 31, 2020.
Unregistered Sales of Equity Securities
None.
The following graph compares the cumulative total stockholder return on Schlumberger common stock 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. It assumes $100 was invested on December 31, 2015 in Schlumberger
common stock, in the S&P 500 Index and in the Philadelphia Oil Service Index, as well as the reinvestment of
dividends on the last day of the month of payment. 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
$250
$200
$150
$100
$50
$0
Dec 15
Dec 16
Dec 17
Dec 18
Dec 19
Dec 20
Schlumberger Ltd
S&P 500 Index
Philadelphia Oil Service Index (OSX)
Share Repurchases
On January 21, 2016, the Schlumberger Board of Directors approved a $10 billion share repurchase program for
Schlumberger common stock. Schlumberger had repurchased $1.0 billion of its common stock under this
18
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Item 6. Selected Financial Data.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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.
(Stated in millions, except per share amounts)
Year Ended December 31,
2020
2019
2018
2017
2016
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to
$
23,601
$
32,917
$
32,815
Schlumberger . . . . . . . . . . . . . . . . . . . . . . . . .
$ (10,518) $ (10,137) $
2,138
Diluted earnings (loss) per share of
Schlumberger . . . . . . . . . . . . . . . . . . . . . . . . .
$
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Short-term investments . . . . . . . . . . . . . . . . . . .
$
Working capital . . . . . . . . . . . . . . . . . . . . . . . . .
$
Fixed income investments, held to maturity . . . $
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . .
$
Total debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Schlumberger stockholders’ equity . . . . . . . . . .
$
Cash dividends declared per share . . . . . . . . . .
$
(7.57) $
$
844
$
2,162
$
2,428
$
-
$
42,434
$
16,036
$
16,886
$
12,071
$
0.88
(7.32) $
$
1,137
$
1,030
$
2,432
$
-
$
56,312
$
14,770
$
15,294
$
23,760
$
2.00
1.53
1,433
1,344
2,245
-
70,507
14,644
16,051
36,162
2.00
$
$
$
$
$
$
$
$
$
$
$
$
30,440
$
27,810
(1,505) $
(1,687)
(1.08) $
$
1,799
$
3,290
$
3,215
$
-
$
71,987
$
14,875
$
18,199
$
36,842
$
2.00
(1.24)
2,929
6,328
8,868
238
77,956
16,463
19,616
41,078
2.00
During 2018, Schlumberger adopted ASU No. 2016-02, Leases, which requires lessees to recognize an operating
lease asset and a lease liability on the balance sheet, with the exception of short-term leases. Prior year amounts
reflected in the table above have not been adjusted and continue to be reflected in accordance with
Schlumberger’s historical accounting.
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
2020 Executive Overview
Global demand for oil dropped precipitously from January through April of 2020, in parallel with the expansion
of the COVID-19 coronavirus outbreak, as governments around the world responded with lockdowns and travel
decreased significantly. Global stocks of crude and refined products increased as oil supply could not respond
quickly enough to balance the market.
As a result, Brent crude oil experienced its highest price of the year—$70 per barrel—in January, with a low of
$9 per barrel in mid-April. Collaboration between OPEC and non-OPEC suppliers, including Russia, led to
extraordinary supply intervention, resulting in the removal of more than eight million barrels per day (“bbl/d”) of
oil supply from the markets between April and June. This eased pressure on oil storage capacity and allowed the
Brent price to stabilize in the $40 range until gaining strength in December, where it closed at $52 per barrel.
The OPEC-led supply alliance maintained production within an agreed quota and helped to maintain a relatively
stable oil price, despite oil demand in the second half of 2020 being more than five million bbl/d lower than same
period of 2019. Demand for refined products, other than jet fuel, returned to within two million bbl/d of pre-crisis
levels by end of 2020.
Oil price volatility in the first half of the year, compounded by uncertainty over the pace of COVID-19 recovery,
caused producers to lay down more than 40% of the world’s drilling rigs in just six months. This suggests that
$40 oil is insufficient to stimulate meaningful drilling activity growth. However, even with massive demand
reduction, the drilling activity necessary to maintain supply is still significant.
In the US, operators laid down nearly 70% of active rigs between the first and third quarters of 2020, before
adding a modest number of rigs in the fourth quarter. As a result, US crude production fell by nearly two million
bbl/d by the end of 2020. However, the remaining rigs continued to drill in the highest quality reservoirs, which
resulted in supply remaining flat over the second half of the year.
Though global gas demand also suffered in response to the pandemic’s effect on economic activity, its use for
power generation, heating, and as a chemical feedstock made it more resilient than oil demand as the pandemic
spread. Gas demand for 2020 was down only approximately 5% as compared to 2019.
US Henry Hub natural gas price averaged $2.03 per million British thermal units (“mmbtu”) for the year, having
also fallen in the first half of 2020. Prices recovered in the second half on decreased tight-oil associated
production in line with the reduction of active rigs. International gas hub prices were more volatile.
Against this backdrop, Schlumberger’s full-year 2020 revenue of $23.6 billion declined 28% year-on-year. North
American revenue fell sharply by 48% to $5.5 billion. This decrease was largely driven by weakness in the land
market as operators reacted to oversupplied markets by making deep cuts to activity. North America operators
dropped drilling and pressure pumping activity quickly in the first quarter due to the effects of the pandemic on
demand, adding a modest volume of completion activity toward the end of the year. International revenue was
more resilient, declining only 19% year-on-year. This decline was most prominent in Latin America, Europe, and
Africa due to downward revisions to customer budgets and COVID-19 disruptions.
Additionally, during the fourth quarter of 2020, Schlumberger completed two transactions: the contribution of its
OneStim business in North America to Liberty Oilfield Services (“Liberty”) in exchange for a 37% stake in
20
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Liberty, and the divestiture of the North America low-flow rod-lift business in a cash transaction. These
businesses accounted for approximately 25% of Schlumberger’s North America revenue in 2020. Consequently,
the percentage of Schlumberger’s revenue that it generates in the international markets will increase significantly
going forward. The combination of Schlumberger’s fit-for-basin strategy, digital technology innovation, and
scale puts the company in the best position to leverage the anticipated shift of spending growth toward the
international markets.
From a macro perspective, oil prices have risen, buoyed by recent supply-led OPEC+ policy, the ongoing
COVID-19 vaccine rollout, and multinational economic stimulus actions—driving optimism for a meaningful oil
demand recovery throughout 2021. We believe that this sets the stage for oil demand to recover to 2019 levels no
later than 2023, or earlier as per recent industry analysts’ reports, reinforcing a multiyear cycle recovery as the
global economy strengthens. Absent a change to these macro assumptions, this will translate into meaningful
activity increases both in North America and internationally.
In North America, spending and activity momentum is expected to continue in the first half of 2021 towards
maintenance levels, albeit moderated by capital discipline and industry consolidation. Internationally, following
the seasonal effects of the first quarter of 2021, and as OPEC+ responds to strengthening oil demand, higher
spending is expected from the second quarter onwards. Accelerated activity is not expected to extend beyond the
short-cycle markets and will be broad, including offshore, as witnessed during the fourth quarter.
The quality of Schlumberger’s results in the fourth quarter of 2020 validates the progress of our performance
strategy and the reinvention of Schlumberger in this new chapter for the industry. Building from the swift
execution and scale of our cost-out program, we exited the year with quarterly margins reset to 2019 levels as the
upcycle begins. Leveraging our high-graded and restructured business portfolio, we see a clear path to achieve
double-digit margins in North America and visible international margin improvement in 2021. Given the depth,
diversity, and executional capability of our international business, we believe we are uniquely positioned to
benefit as international spending accelerates in the near- and mid-term.
By leveraging our new structure, Schlumberger is fully prepared to capitalize on the growth drivers of the future
of our industry, particularly as we accelerate our digital growth ambition and lead in the production and recovery
market. Finally, to meet our long-term ambition to bring lower carbon and carbon-neutral energy sources and
technology to market, we are visibly expanding our New Energy portfolio, to contribute to the transformation of
a more resilient, sustainable, and investable energy services industry.
Fourth Quarter 2020 Results
(Stated in millions)
Fourth Quarter 2020
Third Quarter 2020
Income
Before
Taxes
Revenue
Digital & Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reservoir Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Well Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other
$
$
833
1,247
1,866
1,649
(63)
Corporate & other (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges & credits (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
270
95
183
155
(49)
654
(132)
5
(137)
81
Revenue
$
$
740
1,215
1,835
1,532
(64)
Income
(Loss)
Before
Taxes
202
103
172
132
(34)
575
(151)
3
(131)
(350)
$
5,532
$
471
$
5,258
$
(54)
(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.
(2)
(3)
Excludes interest income included in the segments’ income (fourth quarter 2020: $- million; third quarter
2020: $- million).
Excludes interest expense included in the segments’ income (fourth quarter 2020: $7 million; third quarter
2020: $7 million).
(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.
Fourth-quarter revenue grew 5% sequentially, driven by strong activity and solid execution both in North
America and in the international markets. International revenue of $4.3 billion grew 3% while North America
revenue of $1.2 billion increased 13%. Despite seasonality, revenue grew sequentially in all four Divisions for
the first time since the third quarter of 2019.
Sequentially, international revenue growth outpaced rig count and was led by Latin America and by a global
rebound of activity in most offshore deepwater markets. In the Middle East & Asia, growth was mostly in China,
India, and Oman while Saudi Arabia remained resilient. In Europe/CIS/Africa, activity increased significantly in
the offshore markets of Africa and several countries in Europe, offset by the seasonal winter slowdown in Russia.
In North America, offshore activity in the US Gulf of Mexico grew, and on land, increased horizontal drilling
and pressure pumping activity contributed to the higher revenue.
Digital & Integration
Fourth-quarter revenue of $833 million, 83% of which came from the international markets, increased 13%
sequentially. International revenue increased by 14% and North America revenue increased by 6% sequentially.
The Digital & Integration revenue increase was primarily driven by APS projects.
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23
Digital & Integration pretax operating margin of 32% expanded by 507 basis points (“bps”) sequentially. The
margin expansion was primarily in the international markets and was largely driven by improved profitability
across APS projects.
Reservoir Performance
Fourth-quarter revenue of $1.2 billion, 73% of which came from the international markets, increased 3%
sequentially. International revenue declined 3% while North America revenue increased 23% sequentially. The
revenue increase was primarily driven by higher OneStim activity in North America. OneStim fourth-quarter
revenue of $274 million increased 25% sequentially. This increase, however, was partially offset by seasonality
in Russia and reduced activity in the Middle East & Asia.
Reservoir Performance pretax operating margin of 8% decreased 84 bps sequentially driven by seasonality in
Russia, despite improved North American activity.
Well Construction
Fourth-quarter revenue of $1.9 billion, 84% of which came from the international markets, increased 2%
sequentially. International and North America revenue increased 1% and 7%, respectively. The revenue increase
was due to higher activity in North America, Latin America, and the Middle East & Asia, partially offset by
seasonality in Russia.
Well Construction pretax operating margin of 10% improved by 42 bps sequentially. North America margin
improved due to higher drilling activity on land while international margin was essentially flat.
Production Systems
Fourth-quarter revenue of $1.6 billion, 74% of which came from the international markets, increased 8%
sequentially. International and North America revenue increased 7% and 11%, respectively, due to higher
activity across all areas.
Production Systems pretax operating margin of 9% increased by 82 bps sequentially due to a higher contribution
from the long-cycle business of subsea, and improved profitability in surface production systems due to cost
reduction measures and higher activity.
Full-Year 2020 Results
(Stated in millions)
2020
2019
Income
(Loss)
Before
Taxes
Revenue
Income
(Loss)
Before
Taxes
Revenue
Digital & Integration . . . . . . . . . . . . . . . . . . . . .
Reservoir Performance . . . . . . . . . . . . . . . . . . . .
Well Construction . . . . . . . . . . . . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Eliminations & other
$
$
3,076
5,602
8,605
6,650
(332)
$
731
353
866
623
(172)
$
4,145
9,299
11,880
8,167
(574)
Corporate & other (1) . . . . . . . . . . . . . . . . . . . . . .
Interest income (2) . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . . . . . . . . . . . . . . .
Charges & credits (4) . . . . . . . . . . . . . . . . . . . . . .
2,401
(681)
31
(534)
(12,515)
882
992
1,429
847
(172)
3,978
(957)
33
(571)
(12,901)
$
23,601
$
(11,298) $
32,917
$
(10,418)
(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.
(2)
(3)
Excludes interest income included in the segments’ income (2020: $2 million; 2019: $8 million).
Excludes interest expense included in the segments’ income (2020: $28 million; 2019: $38 million).
(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.
Full-year 2020 revenue of $23.6 billion decreased 28% year-on-year. North America revenue declined 48%
year-on-year reflecting the continued capital discipline of North America operators, who reduced drilling and
hydraulic fracturing activity due to the pandemic. International revenue decreased 19% year-on-year, due to
COVID-19-related disruptions, the drop in offshore activity, and reduced customer discretionary spending.
Digital & Integration
Full-year 2020 revenue of $3.1 billion decreased 26% year-on-year primarily due to lower multiclient and
software sales as customers reduced activity due to COVID-19 and cut discretionary spending.
Year-on-year pretax operating margin increased 249 bps to 24% largely due to improved APS margins as a result
of reduced amortization expense following the asset impairment charges that were recorded in the second quarter
of 2020 and the effects of cost cutting efforts.
Reservoir Performance
Full-year 2020 revenue of $5.6 billion decreased 40% year-on-year. A little more than half of this revenue
decrease was attributable to the sharp drop in OneStim pressure pumping activity in North America land. The
remaining portion of the revenue decline resulted from COVID-19 disruptions that caused international activity
to be cancelled or suspended.
Year-on-year pretax operating margin decreased 435 bps to 6% due to the steep revenue decline.
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25
Well Construction
Digital & Integration
Full-year 2020 revenue of $8.6 billion decreased 28% year-on-year primarily due to the activity decline in US
land as the rig count decreased significantly, while COVID-19 disruptions caused drilling activities to be
cancelled or suspended in several international markets.
Year-on-year pretax operating margin only decreased 196 bps to 10% as the effects of the revenue decline were
partially mitigated by prompt cost cutting measures.
Production Systems
Full-year 2020 revenue of $6.7 billion decreased 19% year-on-year primarily driven by lower sales of valves and
surface systems in North America.
Year-on-year pretax operating margin decreased 101 bps to 9% due to the revenue decline.
Full-year 2019 revenue of $4.1 billion increased 9% year-on-year primarily driven by increased APS activity.
Year-on-year pretax operating margin decreased 181 bps to 21% primarily as a result of a less favorable revenue
mix.
Reservoir Performance
Full-year 2019 revenue of $9.3 billion decreased 7% year-on-year primarily driven by lower OneStim activity in
North America as customers reduced spending due to higher cost of capital, lower borrowing capacity and
expectations of better return from their shareholders.
Year-on-year pretax operating margin decreased 97 bps to 11% primarily due to reduced profitability in OneStim
in North America.
Full-Year 2019 Results
Well Construction
(Stated in millions)
Full-year 2019 revenue of $11.9 billion increased 5% year-on-year primarily due to higher demand for drilling
services, largely in the international markets.
2019
2018
Income
(Loss)
Before
Taxes
Income
Before
Taxes
Revenue
Revenue
Digital & Integration . . . . . . . . . . . . . . . . . . . . . . .
Reservoir Performance . . . . . . . . . . . . . . . . . . . . .
Well Construction . . . . . . . . . . . . . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . .
$
$
4,145
9,299
11,880
8,167
(574)
$
882
992
1,429
847
(172)
$
3,820
10,050
11,310
8,168
(533)
. . . . . . . . . . . . . . . . . . . . . . .
Corporate & other (1)
Interest income (2)
. . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (3) . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Charges & credits (4)
3,978
(957)
33
(571)
(12,901)
882
1,169
1,465
843
(172)
4,187
(937)
52
(537)
(141)
$
32,917
$
(10,418)
$
32,815
$
2,624
(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.
(2)
(3)
Excludes interest income included in the segments’ income (2019: $8 million; 2018: $8 million).
Excludes interest expense included in the segments’ income (2019: $38 million; 2018: $38 million).
(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements.
Full-year 2019 revenue of $32.9 billion was essentially flat year-on-year with North America revenue decreasing
11% and international revenue increasing 7%. The international results were underpinned by increased
investment levels. In contrast, the North America result reflected a slowing production growth rate on land as
operators maintained capital discipline and reduced drilling and hydraulic fracturing activity.
Year-on-year pretax operating margin decreased 93 bps to 12% despite higher revenue as margins were affected
by competitive pricing and higher costs associated with a number of integrated drilling contracts internationally.
Production Systems
Full-year 2019 revenue of $8.2 billion was essentially flat year-on-year as lower revenue for OneSubsea and
valves and process systems was offset by higher surface system and completion sales.
Year-on-year pretax operating margin was essentially unchanged at 10.4%.
Interest and Other Income
Interest & other income consisted of the following:
Earnings of equity method investments . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain on marketable securities . . . . . . . . . . . . . . .
(Stated in millions)
2020
2019
2018
$
$
$
91
33
39
163
$
45
41
-
86
$
$
89
60
-
149
The increase in earnings of equity method investments in 2020 as compared to 2019 is primarily related to higher
income associated with Schlumberger’s equity investments in rig- and seismic-related businesses, while the
decrease in 2019 as compared to 2018 was primarily related to lower income from those same businesses.
The decrease in interest income in 2019 compared to 2018 is primarily attributable to lower cash and short-term
investment balances.
The unrealized gain on marketable securities in 2020 relates to an investment in a start-up company that
Schlumberger previously invested in that completed an initial public offering during the fourth quarter of 2020.
26
27
As a result, Schlumberger recognized an unrealized gain of $39 million to increase the carrying value of this
investment to its fair value of $43 million as of December 31, 2020. See Note 3 to the Consolidated Financial
Statements.
Interest Expense
Interest expense of $563 million in 2020 decreased $46 million compared to 2019. This decrease was primarily
due to certain debt being refinanced with lower interest rate debt. Interest expense of $609 million in 2019
increased $34 million compared to 2018. This increase is primarily due to an increase in the weighted average
debt balance during 2019 as compared to 2018.
Other
Research & engineering and General & administrative expenses, as a percentage of Revenue, were as follows:
Research & engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General & administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5%
1.5%
2.2%
1.4%
2.1%
1.4%
2020
2019
2018
Income Taxes
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 generally
decreases. Conversely, when the percentage of pretax earnings generated outside of North America decreases, the
Schlumberger effective tax rate generally increases.
The Schlumberger effective tax rate was 7% in 2020 as compared to 3% in 2019. The charges and credits
described in Note 3 to the Consolidated Financial Statements, reduced the effective tax rate by approximately 12
and 13 points in 2020 and 2019, respectively, as a significant portion of these charges were not tax effective.
Changes in the geographic mix of pretax earnings accounted for the remaining increase in the effective tax rate in
2020 as compared to 2019.
The Schlumberger effective tax rate was 3% in 2019 as compared to 17% in 2018. The lower effective tax rate
was almost entirely due to the 2019 charges and credits described in Note 3 to the Consolidated Financial
Statements, which primarily related to non-deductible goodwill.
Charges and Credits
Schlumberger recorded significant charges and credits during 2020, 2019 and 2018. 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 2020 charges and credits.
First quarter:
$
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets impairments . . . . . . . . . . . . . . . . . . .
Asset Performance Solutions investments . . . . . . . . . .
North America pressure pumping impairment
. . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter:
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset Performance Solutions investments . . . . . . . . . .
Fixed asset impairments . . . . . . . . . . . . . . . . . . . . . . . .
Inventory write-downs . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use asset impairments . . . . . . . . . . . . . . . . . .
Costs associated with exiting certain activities . . . . . .
Multiclient seismic data impairment . . . . . . . . . . . . . .
Repurchase of bonds . . . . . . . . . . . . . . . . . . . . . . . . . .
Postretirement benefits curtailment gain . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter:
Facility exit charges . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter:
Gain on sale of OneStim . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain on marketable securities . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
Pretax
Tax
Net
3,070
3,321
1,264
587
202
79
-
1,021
730
666
603
311
205
156
40
(69)
60
254
63
33
(104)
(39)
62
$
$
-
815
(4)
133
7
9
(164)
71
15
52
49
67
(25)
2
2
(16)
4
39
-
1
(11)
(9)
4
3,070
2,506
1,268
454
195
70
164
950
715
614
554
244
230
154
38
(53)
56
215
63
32
(93)
(30)
58
$
12,515
$
1,041
$
11,474
As a result of the first quarter 2020 impairment charges, commencing with the second quarter of 2020,
depreciation and amortization expense was reduced by approximately $95 million on a quarterly basis.
Approximately $33 million of this quarterly reduction is reflected in the Digital & Integration Division and
$12 million is reflected in the Reservoir Performance Division. The remaining $50 million is reflected in the
“Corporate & other” line item.
As a result of the second quarter 2020 restructuring and impairment charges, commencing with the third quarter
of 2020, depreciation and amortization expense was reduced by approximately $80 million and lease expense
was reduced by $25 million on a quarterly basis. Approximately $51 million of this quarterly reduction is
reflected in the Digital & Integration Division and $31 million is reflected in the Reservoir Performance
Division, with the remaining $23 million reflected among the Well Construction Division and Production
Systems Division.
28
29
Schlumberger’s products and services, and caused significant volatility and disruption of the financial markets.
This period of extreme economic disruption, low oil prices and reduced demand for Schlumberger’s products and
services has had, and is likely to continue to have, a material adverse impact on Schlumberger’s business, results
of operations, financial condition and, at times, access to sources of liquidity.
In view of the uncertainty of the depth and extent of the contraction in oil demand due to the COVID-19
pandemic combined with the weaker commodity price environment, Schlumberger turned its strategic focus to
cash conservation and protecting its balance sheet. As a result, in April 2020 Schlumberger announced a 75%
reduction to its quarterly cash dividend. The revised dividend supports Schlumberger’s value proposition through
a balanced approach of shareholder distributions and organic investment, while providing flexibility to address
the uncertain environment. This decision reflects the Company’s focus on its capital stewardship program as well
as its commitment to maintain both a strong liquidity position and a strong investment grade credit rating that
provides privileged access to the financial markets.
Details of the components of liquidity as well as changes in liquidity follow:
Components of Liquidity:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings and current portion of long-term debt . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
(Stated in millions)
Dec. 31,
2020
Dec. 31,
2019
Dec. 31,
2018
$
$
844
2,162
(850)
(16,036)
$
1,137
1,030
(524)
(14,770)
1,433
1,344
(1,407)
(14,644)
Net debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(13,880) $
(13,127) $
(13,274)
As a result of the third quarter 2020 restructuring charges, commencing with the fourth quarter of 2020,
depreciation and lease expense was reduced by $15 million on a quarterly basis. This quarterly reduction is
reflected among all of the Divisions.
The following is a summary of the 2019 charges and credits.
Third quarter:
$
Goodwill impairment
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets impairment . . . . . . . . . . . . . . . . . . . . . .
North America pressure pumping . . . . . . . . . . . . . . . . . .
Other North America-related . . . . . . . . . . . . . . . . . . . . .
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-method investments . . . . . . . . . . . . . . . . . . . . . . .
Asset Performance Solutions investments . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter:
North America restructuring . . . . . . . . . . . . . . . . . . . . . .
Other restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement accounting . . . . . . . . . . . . . . . . . . . .
Repurchase of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on formation of Sensia joint venture . . . . . . . . . . .
Pretax
Tax
Net
(Stated in millions)
$
8,828
1,085
1,575
310
127
231
294
242
225
104
68
37
22
(247)
$
43
248
344
53
-
12
-
13
51
(33)
8
8
5
(42)
8,785
837
1,231
257
127
219
294
229
174
137
60
29
17
(205)
$
12,901
$
710
$
12,191
A significant portion of the third-quarter impairment charges were recorded effective August 31, 2019.
Accordingly, the 2019 results reflect a $108 million reduction in depreciation and amortization expense for the
last four months of 2019. Approximately $64 million of this amount is reflected in the Reservoir Performance
Division and $20 million is reflected in the Production Systems Division. The remaining $24 million is reflected
in the “Corporate & other” line item.
The following is a summary of the 2018 charges and credits. The $215 million gain on the sale of the marine
seismic acquisition business is classified in Gains on sale of businesses in the Consolidated Statement of Income
(Loss), while the $356 million of charges are classified in Impairments & other.
Gain on sale of marine seismic acquisition business . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
Pretax
Tax
Net
$
$
(215) $
184
172
141
$
(19) $
20
16
17
$
(196)
164
156
124
Liquidity and Capital Resources
The effects of the COVID-19 pandemic have resulted in a significant and swift reduction in international and US
economic activity. These effects have adversely affected the demand for oil and natural gas, as well as for
30
31
Changes in Liquidity:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairments and other charges and credits . . . . . . . . . . . . . . . . . .
Depreciation and amortization (2)
. . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings of equity method investments, less dividends
received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement benefits funding . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Increase in working capital and other (3)
Cash flow from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APS investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Multiclient seismic data capitalized . . . . . . . . . . . . . . . . . . . . . . .
Free cash flow (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from employee stock plans . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from divestitures . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from formation of Sensia joint venture . . . . . . . . . . . . .
Proceeds from sale of WesternGeco marine seismic business, net
of cash divested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business acquisitions and investments, net of cash acquired plus
debt assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of finance lease obligations . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in net debt before impact of changes in foreign exchange
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of changes in foreign exchange rates on net debt . . . . . . .
rates on net debt
2020
2019
2018
$
(10,486) $
12,515
2,566
(1,248)
(10,107) $
12,901
3,589
(1,011)
(28)
397
(16)
(756)
2,944
(1,116)
(303)
(101)
1,424
(1,734)
(26)
146
434
-
-
(33)
(188)
(181)
(158)
(595)
6
405
(25)
(327)
5,431
(1,724)
(781)
(231)
2,695
(2,769)
(278)
219
348
238
-
(23)
-
(204)
226
(79)
2,177
141
3,556
(245)
(48)
345
(83)
(130)
5,713
(2,160)
(981)
(100)
2,472
(2,770)
(400)
261
-
-
579
(292)
-
(93)
(243)
79
(Increase) decrease in Net Debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Debt, Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
(753)
(13,127)
147
(13,274)
(164)
(13,110)
Net Debt, End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(13,880)
$
(13,127)
$ (13,274)
(1)
(2)
(3)
(4)
“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. Net Debt is a non-GAAP financial measure that should
be considered in addition to, not as a substitute for or superior to, total debt.
Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data
costs and APS investments.
Includes severance payments of approximately $843 million, $128 million and $340 million during 2020, 2019 and
2018, respectively.
“Free cash flow” represents cash flow from operations less capital expenditures, APS investments and multiclient
seismic data costs capitalized. Management believes that free cash flow is an important liquidity measure for the
Company and that it is useful to investors and management as a measure of the ability of our business to generate cash.
Once business needs and obligations are met, this cash can be used to reinvest in the Company for future growth or to
return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual
cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be
considered in addition to, not as substitute for or superior to, cash flow from operations.
Key liquidity events during 2020, 2019 and 2018 included:
•
•
•
•
•
•
•
•
•
•
Cash flow from operations was $2.9 billion in 2020, $5.4 billion in 2019 and $5.7 billion in 2018. The
decrease in cash flow from operations in 2020 as compared to 2019 was driven by the sharp reduction in
earnings excluding non-cash charges and credits and depreciation and amortization expense as a result
of the challenging business conditions in 2020.
On January 21, 2016, the Schlumberger Board of Directors approved a $10 billion share repurchase
program for Schlumberger common stock. Schlumberger had repurchased $1.0 billion of Schlumberger
common stock under this program as of December 31, 2020.
The following table summarizes the activity under this share repurchase program during 2020, 2019 and
2018:
(Stated in thousands, except per share amounts)
Total Cost of
Shares
Purchased
Total Number
of Shares
Purchased
Average Price
Paid per
Share
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
26,244
278,162
399,786
776.2
6,968.3
6,495.1
$
$
$
33.81
39.92
61.55
Dividends paid during 2020, 2019 and 2018 were $1.7 billion, $2.8 billion and $2.8 billion, respectively.
Capital investments (consisting of capital expenditures, APS investments and multiclient seismic data
capitalized) were $1.5 billion in 2020, $2.7 billion in 2019 and $3.2 billion in 2018. Capital investments
during 2021 are expected to be between $1.5 billion and $1.7 billion.
During the fourth quarter of 2020, Schlumberger repaid certain finance lease obligations totaling
$188 million as a result of the OneStim transaction.
During the third quarter of 2020, Schlumberger issued $500 million of 1.40% Senior Notes due 2025
and $350 million of 2.65% Senior Notes due 2030.
During the second quarter of 2020, Schlumberger issued €1.0 billion of 1.375% Guaranteed Notes due
2026, $900 million of 2.650% Senior Notes due 2030 and €1.0 billion of 2.00% Guaranteed Notes due
2032.
During the second quarter of 2020, Schlumberger repurchased all $600 million of its 4.20% Senior
Notes due 2021 and $935 million of its 3.30% Senior Notes due 2021. Schlumberger paid a premium of
approximately $40 million in connection with these repurchases. This premium was classified in
Impairments & other in the Consolidated Statement of Income (Loss). See Note 3 – Charges and
Credits.
During the second quarter of 2020, Schlumberger established 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 has not issued any debt under
this program.
During the first quarter of 2020, Schlumberger issued €400 million of 0.25% Notes due 2027 and
€400 million of 0.50% Notes due 2031.
32
33
•
•
•
•
•
•
•
•
•
•
During the first quarter of 2020, Schlumberger completed the sale of its 49% interest in the Bandurria
Sur Block in Argentina. The net cash proceeds from this transaction, combined with the proceeds
received from the divestiture of a smaller APS project, amounted to $298 million.
During the fourth quarter of 2019, Schlumberger repurchased the remaining $416 million of its 3.00%
Senior Notes due 2020; $126 million of its 4.50% Senior Notes due 2021; $500 million of its 4.20%
Senior Notes due 2021; and $106 million of its 3.60% Senior Notes due 2022.
During the fourth quarter of 2019, Schlumberger completed the sale of the businesses and associated
assets of DRILCO, Thomas Tools and Fishing and Remedial Services and received net cash proceeds of
$348 million. These businesses represented less than 1% of Schlumberger’s consolidated 2019 revenue.
During the fourth quarter of 2019, Schlumberger and Rockwell Automation closed their Sensia joint
venture. Rockwell Automation owns 53% of the joint venture and Schlumberger owns 47%. At closing,
Rockwell Automation made a $238 million cash payment, net of working capital adjustments, to
Schlumberger.
During the third quarter of 2019, Schlumberger issued €500 million of 0.00% Notes due 2024,
€500 million of 0.25% Notes due 2027 and €500 million of 0.50% Notes due 2031.
During the third quarter of 2019, Schlumberger repurchased $783 million of its 3.00% Senior Notes due
2020 and $321 million of its 3.625% Senior Notes due 2022.
During the second quarter of 2019, Schlumberger completed a debt exchange offer, pursuant to which it
issued $1.5 billion in principal of 3.90% Senior Notes due 2028 in exchange for $401 million of 3.00%
Senior Notes due 2020, $234 million of 3.63% Senior Notes due 2022 and $817 million of 4.00% Senior
Notes due 2025.
During the first quarter of 2019, Schlumberger issued $750 million of 3.75% Senior Notes due 2024 and
$850 million of 4.30% Senior Notes due 2029.
During the fourth quarter of 2018, Schlumberger issued €600 million of 1.00% Guaranteed Notes due
2026.
During the fourth quarter of 2018, Schlumberger completed the divestiture of its marine seismic
acquisition business for net proceeds of $579 million (after considering $21 million of cash divested).
Schlumberger expects to receive an income tax refund of approximately $0.5 billion in 2021. This receivable is
included in Other current assets in the Consolidated Balance Sheet as of December 31, 2020.
Summary of Contractual Obligations
(Stated in millions)
Payment Period
Total
2021
2022-2023
2024-2025 After 2025
Debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
Interest on fixed rate debt obligations (2)
Operating leases . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Purchase obligations (3)
$
$
16,886
3,202
1,154
3,014
$
850
486
256
2,693
3,761 $
874
360
199
$
2,940
655
220
75
9,335
1,187
318
47
$
24,256
$
4,285
$
5,194 $
3,890
$
10,887
(1)
(2)
Excludes future payments for interest.
Excludes interest on $0.6 billion of variable rate debt, which had a weighted average interest rate of 1.0% as of
December 31, 2020.
(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.
Refer to Note 17, 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 13, Income Taxes, of the Consolidated Financial Statements, included in the Schlumberger
Consolidated Balance Sheet at December 31, 2020 is approximately $1.3 billion of liabilities associated with
uncertain tax positions in the over 100 tax 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.
Schlumberger has a provision of $0.5 billion relating to severance recorded in its Consolidated Balance Sheet as
of December 31, 2020. The majority of this balance is expected to be paid during the first half of 2021.
Critical Accounting Policies and Estimates
As of December 31, 2020, Schlumberger had $3.0 billion of cash and short-term investments on hand.
Schlumberger had committed credit facility agreements with commercial banks aggregating $6.3 billion that
support commercial paper programs, of which $5.9 billion was available and unused as of December 31, 2020.
Schlumberger also has a €1.54 billion committed revolving credit facility that expires in the second quarter of
2021 but can be extended at Schlumberger’s option for up to an additional year. At December 31, 2020, no
amounts have been drawn under this facility. Schlumberger believes these amounts are sufficient to meet future
business requirements for at least the next 12 months.
The total outstanding commercial paper borrowings were $0.4 billion as of December 31, 2020 and $2.2 billion
as of December 31, 2019.
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 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.
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.
34
35
Allowance for Doubtful Accounts
Income Taxes
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. Adjustments to the allowance may be required in future
periods depending on how such potential issues are resolved, or if the financial condition of Schlumberger’s
customers were to deteriorate resulting in an impairment of their ability to make payments.
As a large multinational company with a long history of operating in a cyclical industry, Schlumberger has
extensive experience in working with its customers during difficult times to manage its accounts receivable.
During weak economic environments or when there is an extended period of weakness in oil and gas prices,
Schlumberger typically experiences delays in the payment of its receivables. However, except for a $469 million
accounts receivable write-off during the fourth quarter of 2017 as a result of the political and economic condition
in Venezuela, Schlumberger has not had material write-offs due to uncollectible accounts receivable over the
recent industry downturn. Schlumberger generates revenue in more than 120 countries. As of December 31,
2020, only five of those countries individually accounted for greater than 5% of Schlumberger’s net accounts
receivable balance, of which only one (Mexico) accounted for greater than 10% of such receivables.
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 or more 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 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 a quantitative 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 based on that
difference.
Schlumberger has the option to bypass the qualitative assessment for any reporting unit in any period and
proceed directly to performing the quantitative goodwill impairment test.
During 2020 and 2019, Schlumberger recorded goodwill impairment charges of $3.1 billion and $8.8 billion,
respectively. Refer to Note 3 to the Consolidated Financial Statements for details regarding the facts and
circumstances that led to this impairment and how the fair value of each reporting unit was estimated, including
the significant assumptions used and other details.
Long-lived assets, including fixed assets, intangible assets and investments in APS 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. 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.
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 that 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.
Revenue Recognition for Certain Long-term Construction-type Contracts
Schlumberger recognizes revenue for certain long-term construction-type contracts over time. These contracts
involve significant design and engineering efforts in order to satisfy custom designs for customer-specific
applications. Under this method, revenue is recognized as work progresses on each contract. Progress is
measured by the ratio of actual costs incurred to date on the project in relation to total estimated project costs.
Approximately 5% of Schlumberger’s revenue in each of 2020, 2019 and 2018, respectively, was recognized
under this method.
The estimate of total project costs has a significant impact on both the amount of revenue recognized as well as
the related profit on a project. Revenue and profits on contracts can also be significantly affected by change
orders and claims. Profits are recognized based on the estimated project profit multiplied by the percentage
complete. Due to the nature of these projects, adjustments to estimates of contract revenue and total contract
costs are often required as work progresses. Any expected losses on a project are recorded in full in the period in
which they become probable.
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, 2020 and 2019 was $317 million and $568 million, respectively.
Such costs are charged to Cost of services 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, an individual survey generally will
not 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
library, surveys are primarily analyzed for
impairment
impairment on a survey-by-survey basis.
test of the multiclient
Pension and Postretirement Benefits
Schlumberger’s pension and postretirement benefit obligations are described in detail
in Note 17 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.
36
37
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 payment of the related benefit obligations. The
following summarizes the discount rates utilized by Schlumberger for its various pension and postretirement
benefit plans:
•
•
•
•
The discount rate utilized to determine the liability for Schlumberger’s United States pension plans
and postretirement medical plan was 2.60% at December 31, 2020 and 3.30% at December 31, 2019.
The weighted-average discount
international pension plans was 2.38% at December 31, 2020 and 3.27% at December 31, 2019.
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 plan decreased from 4.30% in 2019 to 3.30% in 2020.
The weighted-average discount rate utilized to determine expense for Schlumberger’s international
pension plans decreased from 4.00% in 2019 to 3.27% in 2020.
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, 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 6.60% in both 2020 and 2019. The weighted average expected rate of return on plan assets for
the international pension plans was 6.71% in 2020 and 7.22% in 2019. 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 2020 postretirement medical expense and the postretirement medical liability at December 31,
2020 was 7.25%, graded to 4.5% over the next eleven years.
The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant,
for Schlumberger’s United States and international pension plans:
Change in Assumption
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 . . . . . . . . . . . . .
Effect on 2020
Pretax Expense
+$42
-$40
+$31
-$31
(Stated in millions)
Effect on
Dec. 31, 2020
Liability
+$664
-$625
-
-
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 2020
Pretax Expense
25 basis point decrease in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25 basis point increase in discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
-
(Stated in millions)
Effect on
Dec. 31, 2020
Liability
+$46
-$42
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 generates revenue in more than 120 countries. Schlumberger’s
functional currency is primarily the US dollar. Approximately 73% of Schlumberger’s revenue in 2020 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.
Schlumberger maintains a foreign-currency risk management strategy that uses derivative instruments to manage
the impact of changes in foreign exchange rates on its earnings. Schlumberger enters into foreign currency
forward contracts to provide a hedge against currency fluctuations on certain monetary assets and liabilities, and
certain expenses denominated in currencies other than the functional currency.
A 10% appreciation in the US dollar from the December 31, 2020 market rates would increase the unrealized
value of Schlumberger’s forward contracts by $2 million. Conversely, a 10% depreciation in the US dollar from
the December 31, 2020 market rates would decrease the unrealized value of Schlumberger’s forward contracts by
$5 million. In either scenario, the gain or loss on the forward contract would be offset by the gain or loss on the
underlying transaction, and therefore, would have no impact on future earnings.
At December 31, 2020, contracts were outstanding for the US dollar equivalent of $8.6 billion in various foreign
currencies, of which $6.4 billion related 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, 2020, Schlumberger had fixed rate debt aggregating approximately $16.3 billion and variable rate
debt aggregating approximately $0.6 billion.
Schlumberger’s exposure to interest rate risk associated with its debt is also partially mitigated by its investment
portfolio. Short-term investments, which totaled approximately $2.2 billion at December 31, 2020, 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 1.5% in 2020.
38
39
The following table reflects the carrying amounts of Schlumberger’s debt at December 31, 2020 by year of
maturity:
2021
2022
2023
2024
2025
2026
2027
2028 Thereafter Total
(Stated in millions)
$ 598
295
999
$1,496
80
$
55
746
611
$ 498
930
$1,221
736
$1,100
$1,450
$
Fixed rate debt
3.30% Senior Notes . . . . . . . . . . $664
2.65% Senior Notes . . . . . . . . . .
3.63% Senior Notes . . . . . . . . . .
2.40% Senior Notes . . . . . . . . . .
3.65% Senior Notes . . . . . . . . . .
4.00% Notes . . . . . . . . . . . . . . . .
3.70% Notes . . . . . . . . . . . . . . . .
3.75% Senior Notes . . . . . . . . . .
0.00% Notes . . . . . . . . . . . . . . . .
1.40% Senior Notes . . . . . . . . . .
4.00% Senior Notes . . . . . . . . . .
1.375% Guaranteed Notes . . . . .
1.00% Guaranteed Notes . . . . . .
0.25% Notes . . . . . . . . . . . . . . . .
3.90% Senior Notes . . . . . . . . . .
4.30% Senior Notes . . . . . . . . . .
2.65% Senior Notes . . . . . . . . . .
0.50% Notes . . . . . . . . . . . . . . . .
2.00% Guaranteed Notes . . . . . .
7.00% Notes . . . . . . . . . . . . . . . .
5.95% Notes . . . . . . . . . . . . . . . .
5.13% Notes . . . . . . . . . . . . . . . .
Total fixed rate debt . . . . . . . . . . $664 $1,892 $1,576 $1,412 $1,428 $1,957 $1,100 $1,450 $
Variable rate debt . . . . . . . . . . . 186
293
100
-
-
-
-
-
$
664
598
295
999
1,496
80
55
746
611
498
930
1,221
736
1,100
1,450
846
1,250
1,099
1,214
206
114
99
846
1,250
1,099
1,214
206
114
99
4,828 $16,307
579
-
capital expenditures by Schlumberger and the oil and gas industry; the business strategies of Schlumberger,
including digital and “fit for basin,” as well as the strategies of Schlumberger’s customers; Schlumberger’s
restructuring efforts and charges recorded as a result of such efforts; access to raw materials; Schlumberger’s
effective tax rate; Schlumberger’s APS projects, joint ventures, and other alliances; future global economic and
geopolitical conditions; future liquidity; and future results of operations, such as margin levels. These statements
are subject to risks and uncertainties, including, but not limited to, changing 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; the results of operations and financial condition of Schlumberger’s customers
and suppliers, particularly during extended periods of low prices for crude oil and natural gas; Schlumberger’s
inability to achieve its financial and performance targets and other forecasts and expectations; Schlumberger’s
inability to sufficiently monetize assets; the extent of future charges; general economic, geopolitical and business
conditions in key regions of the world; foreign currency risk; pricing pressure; weather and seasonal factors;
unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays
or cancellations; challenges in Schlumberger’s supply chain; production declines; Schlumberger’s inability to
recognize intended benefits from its business strategies and initiatives, such as digital or Schlumberger New
Energy, as well as its restructuring and structural cost reduction plans; changes in government regulations and
including those related to offshore oil and gas exploration, radioactive sources,
regulatory requirements,
explosives, chemicals, hydraulic fracturing services and climate-related initiatives; the inability of technology to
meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes; and
other risks and uncertainties detailed in this Form 10-K and other filings that we make with the SEC. If one or
more of these or other risks or uncertainties materialize (or the consequences of any such development changes),
or should our underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected
in our forward-looking statements. Statements in this Form 10-K are made as of January 27, 2021, and
Schlumberger disclaims any intention or obligation to update publicly or revise such statements, whether as a
result of new information, future events or otherwise.
Total . . . . . . . . . . . . . . . . . . . . . . $850 $1,892 $1,869 $1,412 $1,528 $1,957 $1,100 $1,450 $
4,828 $16,886
The fair value of the outstanding fixed rate debt was approximately $17.6 billion as of December 31, 2020. The
weighted average interest rate on the variable rate debt as of December 31, 2020 was 1.0%.
Schlumberger does not enter into derivatives for speculative purposes.
Forward-looking Statements
This Form 10-K, as well as other statements we make, contains “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 Divisions (and
for specified business lines or geographic areas within each Division); oil and natural gas demand and production
growth; oil and natural gas prices; pricing; Schlumberger’s response to, and preparedness for, the COVID-19
pandemic and other widespread health emergencies; improvements in operating procedures and technology;
40
41
Item 8. Financial Statements and Supplementary Data.
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (LOSS)
Year Ended December 31,
Revenue
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest & other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research & engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General & administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairments & other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . .
Net income (loss) attributable to Schlumberger . . . . . . . . . . . . . . . . . . .
Basic earnings (loss) per share of Schlumberger . . . . . . . . . . . . . . . .
Diluted earnings (loss) per share of Schlumberger . . . . . . . . . . . . . . .
Average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assuming dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
See the Notes to Consolidated Financial Statements
(Stated in millions, except per share amounts)
2020
2019
2018
$
$
$
$
16,533
7,068
23,601
163
104
14,675
6,325
580
365
12,658
563
(11,298)
(812)
(10,486)
32
(10,518)
(7.57)
(7.57)
1,390
1,390
$
$
$
$
24,358
8,559
32,917
86
247
20,828
7,892
717
474
13,148
609
(10,418)
(311)
(10,107)
30
(10,137)
(7.32)
(7.32)
1,385
1,385
24,296
8,519
32,815
149
215
20,618
7,860
702
444
356
575
2,624
447
2,177
39
2,138
1.54
1.53
1,385
1,393
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Stated in millions)
Year Ended December 31,
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments
2020
2019
2018
$
(10,486)
$
(10,107)
$
2,177
Net change arising during the period . . . . . . . . . . . . . . . . . . .
(239)
Marketable securities
Unrealized loss arising during the period . . . . . . . . . . . . . . .
Cash flow hedges
Net loss on cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to net income (loss) of net realized loss . . .
Pension and other postretirement benefit plans
Actuarial gain (loss) arising during the period . . . . . . . . . . . .
Amortization to net income (loss) of net actuarial loss . . . . .
Amortization to net income (loss) of net prior service
(credit) cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of curtailment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes on pension and other postretirement benefit
plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
(90)
54
(247)
200
(17)
(69)
(38)
67
-
(32)
10
127
94
(11)
-
(71)
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10,932)
(9,923)
Comprehensive income attributable to noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
30
(191)
(11)
(16)
1
(186)
187
(5)
-
(18)
1,938
39
Comprehensive income (loss) attributable to Schlumberger . . .
$
(10,964) $
(9,953) $
1,899
See the Notes to Consolidated Financial Statements
42
43
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
December 31,
ASSETS
Current Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables less allowance for doubtful accounts (2020—$301;
2019—$255) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
Short-term borrowings and current portion of long-term debt
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,442
1,015
850
184
10,491
16,036
1,049
19
2,350
29,945
12,970
(3,033)
7,018
(4,884)
12,071
418
12,489
10,663
1,209
524
702
13,098
14,770
967
491
2,810
32,136
13,078
(3,631)
18,751
(4,438)
23,760
416
24,176
$
42,434
$
56,312
(Stated in millions)
2020
2019
$
$
844
2,162
5,247
3,354
1,312
12,919
2,061
6,826
317
12,980
3,455
3,876
1,137
1,030
7,747
4,130
1,486
15,530
1,565
9,270
568
16,042
7,089
6,248
Year Ended December 31,
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income (loss) to cash provided by
operating activities:
Impairments and other charges and credits . . . . . . . . . . . . . . . .
Depreciation and amortization (1) . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in inventories
Decrease (increase) in other current assets . . . . . . . . . . . . . . . . .
(Increase) decrease in other assets . . . . . . . . . . . . . . . . . . . . . . .
Decrease 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 . . .
$
42,434
$
56,312
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APS investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Multiclient seismic data capitalized . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from divestitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from formation of Sensia joint venture . . . . . . . . . . . . . . .
Proceeds from sale of WesternGeco marine seismic business, net
of cash divested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business acquisitions and investments, net of cash acquired . . . . . .
(Purchase) sale of investments, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . .
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 increase (decrease) in short-term borrowings . . . . . . . . . . . . . .
Repayment of finance lease-related obligations . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . . . . . . . .
Net decrease in cash before translation effect
. . . . . . . . . . . . . . . . . . . . . .
Translation effect on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020
2019
2018
(Stated in millions)
$
(10,486)
$
(10,107)
$
2,177
12,515
2,566
(1,248)
397
(16)
(28)
2,345
86
267
(25)
(3,330)
(201)
19
83
2,944
(1,116)
(303)
(101)
434
-
-
(33)
(1,141)
(93)
(2,353)
(1,734)
146
-
(26)
5,837
(4,975)
156
(188)
(89)
(873)
(282)
(11)
1,137
12,901
3,589
(1,011)
405
(25)
6
142
(314)
(68)
22
(161)
6
(52)
98
5,431
(1,724)
(781)
(231)
348
238
-
(23)
317
(155)
(2,011)
(2,769)
196
23
(278)
4,004
(4,799)
(44)
-
(51)
(3,718)
(298)
2
1,433
141
3,556
(245)
345
(83)
(48)
430
(10)
121
(58)
(824)
(103)
69
245
5,713
(2,160)
(981)
(100)
-
-
579
(292)
1,943
(29)
(1,040)
(2,770)
227
34
(400)
898
(2,861)
(85)
-
(63)
(5,020)
(347)
(19)
1,799
1,433
See the Notes to Consolidated Financial Statements
See the Notes to Consolidated Financial Statements
44
45
Cash, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
844
$
1,137
$
(1)
(2)
Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs and APS
investments.
Net of the effect of business acquisitions and divestitures.
SCHLUMBERGER LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
SCHLUMBERGER LIMITED AND SUBSIDIARIES
SHARES OF COMMON STOCK
Balance, January 1, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase plan . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares sold to optionees, less shares exchanged . . . . . . . . . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See the Notes to Consolidated Financial Statements
Issued
In Treasury
(Stated in millions)
Shares
Outstanding
1,434
-
-
-
-
1,434
-
-
-
-
1,434
-
-
-
1,434
(50)
1
1
3
(6)
(51)
1
2
6
(7)
(49)
6
2
(1)
(42)
1,384
1
1
3
(6)
1,383
1
2
6
(7)
1,385
6
2
(1)
1,392
(Stated in millions)
Common Stock
Issued
In Treasury
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Noncontrolling
Interests
Total
Balance, January 1, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments . . . . . . . . . . . . . . . .
Changes in unrealized gain on 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) . . . . . . . . . . . . .
Stranded tax related to US pension . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustments . . . . . . . . . . . . . . . .
Changes in fair value of cash flow hedges . . . . . . . . .
Pension and other postretirement benefit plans . . . . .
Vesting of restricted stock . . . . . . . . . . . . . . . . . . . . .
Shares issued under employee stock purchase
plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock repurchase program . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . .
Dividends declared ($0.875 per share) . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,975 $
(4,049) $ 32,190 $
(4,274) $
2,138
(191)
(11)
(15)
(22)
(109)
(4,622)
67
(22)
139
(4,438)
(239)
(36)
(171)
(41)
(72)
(67)
345
75
72
294
(400)
(8)
2
13,132
(4,006)
(26)
(155)
(249)
405
(29)
49
155
445
(278)
4
13,078
(3,631)
(2,770)
109
(9)
31,658
(10,137)
(2,770)
18,751
(10,518)
(173)
(298)
397
(34)
173
444
(26)
7
(1,215)
419 $
39
(5)
37,261
2,177
(196)
(11)
(15)
(22)
34
-
227
(400)
345
(2,770)
-
(44)
36,586
(10,107)
66
(22)
139
23
-
196
(278)
405
(2,770)
(62)
24,176
(10,486)
(232)
(36)
(171)
-
146
(26)
397
(1,215)
(64)
(29)
424
30
(1)
(37)
416
32
7
(37)
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . $
12,970 $
(3,033) $
7,018 $
(4,884) $
418 $
12,489
See the Notes to Consolidated Financial Statements
46
47
Notes to Consolidated Financial Statements
1. Business Description
incorporated in Curaçao) and its consolidated subsidiaries
Schlumberger Limited (Schlumberger N.V.,
(collectively, “Schlumberger”) form a technology company that partners with customers to access energy.
Schlumberger provides leading digital solutions and deploys innovative technologies to enable performance and
sustainability for the global energy industry. Schlumberger collaborates to create technology that unlocks access
to energy for the benefit of all.
2. Summary of Accounting Policies
Revenue is recognized as work progresses on each contract. Progress is measured by the ratio of actual costs
incurred to date on the project in relation to total estimated project costs. The estimate of total project costs has a
significant impact on both the amount of revenue recognized as well as the related profit on a project. Revenue
and profits on contracts can also be significantly affected by change orders and claims. Due to the nature of these
projects, adjustments to estimates of contract revenue and total contract costs may be required as work
progresses. Progress billings are generally issued upon completion of certain phases of work as stipulated in the
contract. Any expected losses on a project are recorded in full in the period in which they become probable.
Due to the nature of its businesses, Schlumberger does not have significant backlog. Total backlog was
$2.6 billion at December 31, 2020, of which approximately 60% is expected to be recognized as revenue during
2021.
The Consolidated Financial Statements of Schlumberger have been prepared in accordance with accounting
principles generally accepted in the United States of America.
Short-term Investments
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the 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,
Schlumberger evaluates its estimates, including those related to collectibility of accounts receivable; revenue
recognized for certain long-term construction-type contracts over time; recoverability of fixed assets, goodwill,
intangible assets, Asset Performance Solutions 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 adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers
on January 1, 2018. This ASU amended the existing accounting standards for revenue recognition and requires
companies to recognize revenue when control of the promised goods or services is transferred to a customer at an
amount that reflects the consideration a company expects to receive in exchange for those goods or services.
Under the transition method selected by Schlumberger, this ASU was applied only to those contracts which were
not completed as of January 1, 2018. Prior period amounts were not adjusted and were reflected in accordance
with Schlumberger’s historical accounting. The adoption of this ASU did not have a material impact on
Schlumberger’s Consolidated Financial Statements.
Schlumberger recognizes revenue upon the transfer of control of promised products or services to customers at
an amount that reflects the consideration it expects to receive in exchange for these products or services. The vast
majority of Schlumberger’s services and product offerings are short-term in nature. The time between invoicing
and when payment is due under these arrangements is generally between 30 to 60 days.
Revenue is occasionally generated from contractual arrangements that include multiple performance obligations.
Revenue from these arrangements is allocated to each performance obligation based on its relative standalone
selling price. Standalone selling prices are generally determined based on the prices charged to customers or
using expected costs plus margin.
Revenue is recognized for certain long-term construction-type contracts over time. These contracts involve
significant design and engineering efforts in order to satisfy custom designs for customer-specific applications.
Short-term investments 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 and are stated at
cost plus accrued interest, which approximates fair value.
For purposes of the Consolidated Statement of Cash Flows, Schlumberger does not consider Short-term
investments to be cash equivalents.
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 the
ability to exercise significant influence are reported at fair value, with unrealized gains and losses reported as a
component of Interest and other income.
Multiclient Seismic Data
Schlumberger’s 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 services 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, an individual survey
generally will not 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
recorded when it is determined that estimated future cash flows, 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.
Asset Performance Solutions
Asset Performance Solutions (“APS”) projects are focused on developing and co-managing production of
customers’ assets under long-term agreements. Schlumberger invests its own services and products, and in
certain historical 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
48
49
generally compensated based on cash flow generated or on a fee-per-barrel basis. This includes certain
arrangements whereby Schlumberger is only compensated based on 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. These
capitalized investments are amortized to the Consolidated Statement of Income (Loss) as the related 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. Amortization expense relating to these capitalized investments was $396 million, $731 million and
$568 million in 2020, 2019 and 2018, respectively.
The unamortized portion of Schlumberger’s investments in APS projects was $1.713 billion and $3.724 billion at
December 31, 2020 and 2019, 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, receivables from clients and derivative financial instruments. Schlumberger places its cash and
short-term investments 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 generates revenue in more than 120 countries and as such, its accounts receivable are spread over
many countries and customers. Mexico represented approximately 14% of Schlumberger’s net accounts
receivable balance at December 31, 2020. No other country accounted for greater than 10% of Schlumberger’s
accounts receivable balance. Schlumberger maintains an allowance for uncollectible accounts receivable based
on expected collectability and performs ongoing credit evaluations of its customers’ financial condition. If the
financial condition of Schlumberger’s customers were to deteriorate resulting in an impairment of their ability to
make payments, adjustments to the allowance may be required.
Earnings per Share
The following is a reconciliation from basic to diluted earnings (loss) per share of Schlumberger for each of the
last three years:
(Stated in millions, except per share amounts)
Net Income (Loss)
Attributable to
Schlumberger
Average
Shares
Outstanding
Earnings (Loss)
per Share
2020:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(10,518)
1,390
$
(7.57)
Assumed exercise of stock options . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . .
-
-
-
-
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(10,518)
1,390
$
(7.57)
2019:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(10,137)
1,385
$
(7.32)
Assumed exercise of stock options . . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . .
-
-
-
-
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(10,137)
1,385
$
(7.32)
2018:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,138
1,385
$
1.54
Assumed exercise of stock options . . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . .
-
-
-
8
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,138
1,393
$
1.53
The number of outstanding employee stock options to purchase shares of Schlumberger common stock and
unvested restricted stock units that were not included in the computation of diluted earnings/loss per share,
because to do so would have had an anti-dilutive effect, were as follows:
(Stated in millions)
2020
2019
2018
Employee stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
19
46
12
40
-
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
50
51
3. Charges and Credits
2020
Schlumberger recorded the following charges and credits during 2020, all of which, unless otherwise noted, are
classified in Impairments & other in the Consolidated Statement of Income (Loss):
(Stated in millions)
Pretax
Tax
Net
First quarter:
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Intangible assets impairments . . . . . . . . . . . . . . . . . . . . . . . . .
Asset Performance Solutions investments . . . . . . . . . . . . . . . .
North America pressure pumping impairment
. . . . . . . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter:
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset Performance Solutions investments . . . . . . . . . . . . . . . .
Fixed asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use asset impairments . . . . . . . . . . . . . . . . . . . . . . . .
Costs associated with exiting certain activities . . . . . . . . . . . .
Multiclient seismic data impairment . . . . . . . . . . . . . . . . . . . .
Repurchase of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Postretirement benefits curtailment gain . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter:
Facility exit charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter:
Gain on sale of OneStim . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain on marketable securities . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,070
3,321
1,264
587
202
79
-
1,021
730
666
603
311
205
156
40
(69)
60
254
63
33
(104)
(39)
62
$
$
-
815
(4)
133
7
9
(164)
71
15
52
49
67
(25)
2
2
(16)
4
39
-
1
(11)
(9)
4
3,070
2,506
1,268
454
195
70
164
950
715
614
554
244
230
154
38
(53)
56
215
63
32
(93)
(30)
58
$
12,515
$
1,041
$
11,474
First quarter 2020:
•
Geopolitical events that increased the supply of low-priced oil to the global market occurred at the same
time that demand weakened due to the worldwide effects of the COVID-19 pandemic, leading to a
collapse in oil prices during March 2020. As a result, Schlumberger’s market capitalization deteriorated
significantly compared to the end of 2019. Schlumberger’s stock price reached a low during the first
quarter of 2020 not seen since 1995. Additionally, the Philadelphia Oil Services Sector index, which is
comprised of companies involved in the oil services sector, reached an all-time low. As a result of these
facts, Schlumberger determined that it was more likely than not that the fair value of certain of its
reporting units was less than their carrying value. Therefore, Schlumberger performed an interim
goodwill impairment test.
Schlumberger had 11 reporting units with goodwill balances aggregating $16.0 billion. Schlumberger
determined that the fair value of four of its reporting units, representing $4.5 billion of goodwill, was
substantially in excess of their carrying value. Schlumberger performed a detailed quantitative
impairment assessment of the remaining seven reporting units, which represented $11.5 billion of
goodwill. As a result of this assessment, Schlumberger concluded that the goodwill associated with each
of these seven reporting units was impaired, resulting in a $3.1 billion goodwill impairment charge.
Following the $3.1 billion goodwill impairment charge relating to these seven reporting units, six of
these reporting units had a remaining goodwill balance. These goodwill balances ranged between
$0.2 billion and $5.0 billion and aggregated to $8.4 billion as of March 31, 2020.
Schlumberger used the income approach to estimate the fair value of its reporting units, but also
considered the market approach to validate the results. The income approach estimates the fair value by
discounting each reporting unit’s estimated future cash flows using Schlumberger’s estimate of the
discount rate, or expected return, that a marketplace participant would have required as of the valuation
date. The market approach includes the use of comparative multiples to corroborate the discounted cash
flow results. The market approach involves significant judgement involved in the selection of the
appropriate peer group companies and valuation multiples.
Some of the more significant assumptions inherent in the income approach include the estimated future
net annual cash flows for each reporting unit and the discount rate. Schlumberger selected the
assumptions used in the discounted cash flow projections using historical data supplemented by current
and anticipated market conditions and estimated growth rates. Schlumberger’s estimates are based upon
assumptions believed to be reasonable. However, given the inherent uncertainty in determining the
assumptions underlying a discounted cash flow analysis, particularly in a volatile market, actual results
may differ from those used in Schlumberger’s valuations which could result in additional impairment
charges in the future.
The discount rates utilized to value Schlumberger’s reporting units were between 12.0% and 13.5%,
depending on the risks and uncertainty inherent in the respective reporting unit as well as the size of the
reporting unit. Assuming all other assumptions and inputs used in each of the respective discounted cash
flow analysis were held constant, a 50-basis point increase or decrease in the discount rate assumptions
would have changed the fair value of the seven reporting units, on average, by less than 5%.
The negative market indicators described above were triggering events that indicated that certain of
Schlumberger’s long-lived intangible and tangible assets may have been impaired. Recoverability
testing indicated that certain long-lived assets were impaired. The estimated fair value of these assets
was determined to be below their carrying value. As a result, Schlumberger recorded the following
impairment charges:
-
-
-
$3.3 billion relating to intangible assets, of which $2.2 billion relates to Schlumberger’s 2016
acquisition of Cameron International Corporation and $1.1 billion relates to Schlumberger’s 2010
acquisition of Smith International, Inc. Following this impairment charge, the carrying value of the
impaired intangible assets was approximately $0.9 billion.
$1.3 billion relating to the carrying value of certain APS projects in North America.
$0.6 billion of fixed assets associated with the pressure pumping business in North America.
$202 million of severance.
$79 million of other restructuring charges, primarily consisting of the impairment of an equity method
investment that was determined to be other-than-temporarily impaired.
$164 million relating to a valuation allowance against certain deferred tax assets.
•
•
•
•
52
53
Second quarter 2020:
•
•
•
As previously noted, late in the first quarter of 2020 geopolitical events that increased the supply of
low-priced oil to the global market occurred at the same time as demand weakened due to the worldwide
effects of the COVID-19 pandemic, which led to a collapse in oil prices. As a result, the second quarter
of 2020 was the most challenging quarter in decades. Schlumberger responded to these market
conditions by taking actions to restructure its business and rationalize its asset base during the second
quarter of 2020. These actions included reducing headcount, closing facilities and exiting business lines
in certain countries. Additionally, due to the resulting activity decline, Schlumberger had assets that
would no longer be utilized. As a consequence of these circumstances and decisions, Schlumberger
recorded the following restructuring and asset impairment charges:
-
-
-
-
-
-
-
-
$1.021 billion of severance associated with reducing its workforce by more than 21,000 employees.
$730 million relating to the carrying value of certain APS projects in Latin America.
$666 million of fixed asset impairments primarily relating to equipment that would no longer be
utilized and facilities it exited.
$603 million write-down of the carrying value of inventory to its net realizable value.
$311 million write-down of right-of-use assets under operating leases associated with leased
facilities Schlumberger exited and excess equipment.
$205 million of costs associated with exiting certain activities.
$156 million impairment of certain multiclient seismic data.
$60 million of other costs, including a $42 million increase in the allowance for the doubtful
accounts.
During the second quarter of 2020, Schlumberger repurchased certain Senior Notes (see Note 9 – Long-
term Debt), which resulted in a $40 million charge.
As a consequence of the workforce reductions described above, Schlumberger recorded a curtailment
gain of $69 million relating to its US postretirement medical plan. See Note 17 – Pension and Other
Postretirement Benefit Plans for further details.
The fair value of the impaired intangible assets, fixed assets, APS investments, right-of-use assets and multiclient
seismic data was estimated based on the present value of projected future cash flows that the underlying assets
are expected to generate. Such estimates included unobservable inputs that required significant judgement.
Third quarter 2020:
-
-
-
$254 million of facility exit charges as Schlumberger continued to rationalize its real estate
footprint relating to both leased and owned facilities.
$63 million of severance.
$33 million of other charges.
Fourth quarter 2020:
•
On December 31, 2020, Schlumberger contributed its onshore hydraulic fracturing business in the
United States and Canada (“OneStim”), including its pressure pumping, pumpdown perforating and
Permian frac sand business to Liberty Oilfield Services Inc. (“Liberty”) in exchange for a 37% equity
interest in Liberty. As a result of this transaction, Schlumberger recognized a gain of $104 million
during the fourth quarter of 2020. This gain is classified in Gains on sales of businesses in the
Consolidated Statement of Income (Loss).
Schlumberger will account for its investment in Liberty under the equity method of accounting and will
record its share of Liberty’s net income on a one-quarter lag. Based on the quoted market price of
Liberty’s shares as of December 31, 2020, the value of Schlumberger’s investment is approximately
$0.7 billion.
During the fourth quarter of 2020, a start-up company that Schlumberger previously invested in
completed an initial public offering. As a result, Schlumberger recognized an unrealized gain of
$39 million to increase the carrying value of this investment
to its fair value of approximately
$43 million. This unrealized gain is reflected in Interest and other income in the Consolidated Statement
of Income (Loss).
During the fourth quarter of 2020, Schlumberger entered into an agreement to purchase new software
licenses. This transaction rendered certain previously purchased licenses obsolete. As a result,
Schlumberger wrote off the remaining $62 million of net book value associated with the obsolete
software licenses.
•
•
As market conditions evolve and Schlumberger continues to develop its strategy to deal with such conditions, it
may result in further restructuring and/or impairment charges in future periods.
2019
recorded the following charges and credits during 2019, all of which are classified as
Schlumberger
Impairments & other in the Consolidated Statement of Income (Loss), except for the gain on the formation of the
Sensia joint venture:
Third quarter:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Goodwill impairment
Intangible assets impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America pressure pumping . . . . . . . . . . . . . . . . . . . . . . . . . .
Other North America-related . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset Performance Solutions investments . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on formation of Sensia joint venture . . . . . . . . . . . . . . . . . . .
(Stated in millions)
Pretax
Tax
Net
$
8,828
1,085
1,575
310
127
231
294
242
225
104
68
37
22
(247)
$
43
248
344
53
-
12
-
13
51
(33)
8
8
5
(42)
8,785
837
1,231
257
127
219
294
229
174
137
60
29
17
(205)
$
12,901
$
710
$
12,191
Third quarter of 2019:
•
During August 2019, Schlumberger’s market capitalization deteriorated significantly compared to the
end of the second quarter of 2019. Schlumberger’s stock price reached a low not seen since 2005.
•
During the third quarter of 2020, Schlumberger recorded the following restructuring charges:
Fourth quarter:
54
55
Additionally, the Philadelphia Oil Services Sector Index, which is comprised of companies in the oil
services sector, reached an 18-year low.
As a result of these facts, Schlumberger determined that it was more likely than not that the fair value of
certain of its reporting units was less than their carrying value. Therefore, Schlumberger performed an
interim goodwill impairment test as of August 31, 2019.
As of August 31, 2019, Schlumberger had 17 reporting units with goodwill balances aggregating
$25.0 billion. Schlumberger determined that the fair value of seven of its reporting units, representing
approximately $13.8 billion of the goodwill, was substantially in excess of their carrying value.
Schlumberger performed a detailed quantitative impairment assessment of the remaining 10 reporting
units, which represented $11.2 billion of goodwill. As a result of this assessment, Schlumberger
concluded that the goodwill associated with nine of the 10 reporting units was impaired, resulting in an
$8.8 billion goodwill impairment charge.
Schlumberger primarily used the income approach to estimate the fair value of its reporting units, but
also considered the market approach to validate the results. The income approach estimates the fair
value by discounting each reporting unit’s estimated future cash flows using Schlumberger’s estimate of
the discount rate, or expected return, that a marketplace participant would have required as of the
valuation date. The market approach includes the use of comparative multiples to corroborate the
discounted cash flow results. The market approach involves significant judgement involved in the
selection of the appropriate peer group companies and valuation multiples.
Some of the more significant assumptions inherent in the income approach include the estimated future
net annual cash flows for each reporting unit and the discount rate. Schlumberger selected the
assumptions used in the discounted cash flow projections using historical data supplemented by current
and anticipated market conditions and estimated growth rates. Schlumberger’s estimates are based upon
assumptions believed to be reasonable.
The discount rates utilized to value Schlumberger’s reporting units were between 12.5% and 14.0%,
depending on the risks and uncertainty inherent in the respective reporting unit. Assuming all other
assumptions and inputs used in each of the respective discounted cash flow analysis were held constant,
a 50 basis point increase in the discount rate assumption would have increased the goodwill impairment
charge by approximately $0.3 billion. Conversely, assuming all other assumptions and inputs used in
each of the respective discounted cash flow analysis were held constant, a 50 basis point decrease in the
discount rate assumption would have decreased the goodwill impairment charge by approximately
$0.4 billion.
•
The negative market indicators described above combined with deteriorating market conditions in North
America, as well as the results of the previously mentioned fair value determinations of certain of
Schlumberger’s reporting units and the appointment of a new Chief Executive Officer, were all
triggering events that indicated that certain of Schlumberger’s long-lived tangible and intangible assets
may be impaired.
Recoverability testing, which was performed as of August 31, 2019, indicated that long-lived assets
associated with certain asset groups were impaired. The estimated fair value of these asset groups was
determined to be below their carrying value. As a result, Schlumberger recorded the following
impairment and related charges:
-
-
$1.085 billion of intangible assets, of which $842 million relates to Schlumberger’s 2010
acquisition of Smith International, Inc. The remaining $243 million primarily relates to other
acquisitions in North America.
$1.575 billion of charges relating to Schlumberger’s pressure pumping business in North America.
This amount consists of $1.324 billion of pressure pumping equipment and related assets;
$98 million of right-of-use assets under operating leases; $121 million relating to a supply contract;
$19 million of inventory; and $13 million of severance.
-
$310 million of charges primarily relating to other businesses in North America, consisting of
$230 million of fixed asset impairments, $70 million of inventory write-downs and $10 million of
severance.
•
•
As a result of the economic challenges in Argentina, Schlumberger recorded $127 million of charges
during the third quarter of 2019. This consists of $72 million of asset impairments, a $26 million
devaluation charge and $29 million of severance.
Schlumberger also recorded the following impairment and restructuring charges during the third quarter
of 2019:
-
-
-
$231 million relating to certain equity method investments that were determined to be other-than-
temporarily impaired.
$294 million impairment relating to the carrying value of certain smaller APS projects.
$242 million of restructuring charges consisting of: $62 million of severance; $57 million relating
to the acceleration of stock-based compensation expense associated with certain individuals;
$49 million of business divestiture costs; $29 million relating to the repurchase of certain Senior
Notes (see Note 9 – Long-term Debt); and $45 million of other provisions.
The fair value of certain of the assets impaired during the fourth quarter of 2019 was estimated based on the
present value of projected future cash flows that the underlying assets are expected to generate. Such estimates
included unobservable inputs that required significant judgment.
Fourth quarter of 2019:
•
Schlumberger recorded the following restructuring charges during the fourth quarter of 2019:
•
•
•
-
-
-
$225 million associated with facility closures and costs to exit certain activities in North America.
These charges included $123 million relating to fixed assets; $55 million of right-of-use assets
under operating leases; and $47 million of other exit costs.
$104 million primarily relating to restructuring certain activities outside of North America, which
included $68 million associated with assets to be divested and $36 million of facility closure costs.
$68 million of severance associated with streamlining its operations and exiting certain activities.
Certain of Schlumberger’s defined benefit pension plans offered former Schlumberger employees, who
had not yet commenced receiving their pension benefits, an opportunity to receive a lump sum payout of
their vested pension benefit which resulted in Schlumberger recording a pension settlement charge of
$37 million in the fourth quarter of 2019. See Note 17 – Pension and Other Postretirement Benefit
Plans for further details.
During the fourth quarter of 2019, Schlumberger repurchased certain Senior Notes (see Note 9 – Long-
term Debt), which resulted in a $22 million charge.
On October 1, 2019, Schlumberger and Rockwell completed the formation of Sensia, a joint venture that
is the oil and gas industry’s first digitally enabled integrated automation solutions provider. Rockwell
Automation owns 53% of the joint venture and Schlumberger owns 47%. In connection with this
transaction, Schlumberger received a cash payment of $238 million. Schlumberger will account for its
investment under the equity method of accounting. During the fourth quarter of 2019, Schlumberger
recorded a $247 million gain as a result of the deconsolidation of certain of its businesses in connection
with the formation of the joint venture. This gain, which is equal to the sum of the $238 million of cash
proceeds received and the fair value of Schlumberger’s retained noncontrolling investment in the
businesses it contributed less the carrying amount of the assets and liabilities of such businesses at the
time of the closing, is classified as Gains on sale of businesses in the Consolidated Statement of Income
(Loss).
56
57
2018
During 2018, Schlumberger recorded the following charges and credits:
Gain on sale of marine seismic acquisition business . . . . . . . . . . . . . .
Workforce reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
Pretax
Tax
Net
$
$
(215) $
184
172
141
$
(19) $
20
16
17
$
(196)
164
156
124
•
•
•
During the fourth quarter of 2018, Schlumberger completed the divestiture of its marine seismic
acquisition business to Shearwater GeoServices (“Shearwater”) for $600 million of cash and a 15%
equity interest in Shearwater. As a result of this transaction, Schlumberger recognized a $215 million
gain. This gain is classified in Gain on sale of business in the Consolidated Statement of Income (Loss).
During the fourth quarter of 2018, Schlumberger recorded $172 million of charges to fully impair
certain long-lived assets. This amount
is classified in Impairments & other in the Consolidated
Statement of Income (Loss).
During the second quarter of 2018, Schlumberger recorded a $184 million charge associated with
workforce reductions, primarily to further streamline its support cost structure. This charge is classified
in Impairment & other in the Consolidated Statement of Income (Loss).
4. Inventories
Inventories, which are stated at the lower of average cost or net realizable value, consist of the following:
Raw materials & field materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1,573
464
1,317
$
3,354
$
1,857
515
1,758
4,130
(Stated in millions)
2020
2019
5. Fixed Assets
Fixed assets consist of the following:
(Stated in millions)
2020
2019
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Buildings & improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery & equipment
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
362
3,757
25,625
29,744
22,918
$
6,826
$
483
5,156
29,370
35,009
25,739
9,270
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.
Depreciation expense, which is recorded on a straight-line basis, was $1.6 billion, $2.0 billion and $2.1 billion in
2020, 2019 and 2018, respectively.
6. Multiclient Seismic Data
The change in the carrying amount of multiclient seismic data is as follows:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized in period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charged to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment charge (see Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
2020
2019
$
$
$
568
101
(174)
(156)
(22)
317
$
601
231
(264)
-
-
568
7. Goodwill
The changes in the carrying amount of goodwill by segment were as follows:
(Stated in millions)
Reservoir
Characterization
Drilling
Production
Cameron
Total
Balance, January 1, 2019 . . . . . . $
Impairment (see Note 3) . . . . . . .
Impact of changes in exchange
rates and other . . . . . . . . . . . . .
Balance, December 31, 2019 . . .
Impairment (see Note 3) . . . . . . .
Impact of changes in exchange
rates and other . . . . . . . . . . . . .
4,703 $
(97)
10,111 $
(3,025)
4,678 $
(705)
5,439 $
(5,001)
24,931
(8,828)
(46)
4,560
-
6
7,092
(1,659)
(24)
3,949
(1,228)
-
10
(17)
3
441
(183)
3
(61)
16,042
(3,070)
(4)
Balance, September 30, 2020 . . . $
4,560 $
5,443 $
2,704 $
261 $
12,968
58
59
In connection with the change in reportable segments discussed in Note 16 – Segment Information, Schlumberger
reallocated goodwill that existed as of September 30, 2020 to the new reporting units on a relative fair value basis
as follows:
9. Long-term Debt and Debt Facility Agreements
Long-term Debt consists of the following:
Balance, October 1, 2020 . . . . . . $
Impact of changes in exchange
rates and other . . . . . . . . . . . . .
Digital &
Integration
Reservoir
Performance
Well
Construction
Production
Systems
Total
2,041 $
3,806 $
6,267 $
854 $
12,968
6
(4)
11
(1)
12
Balance, December 31, 2020 . . . $
2,047 $
3,802 $
6,278 $
853 $
12,980
(Stated in millions)
8. Intangible Assets
Intangible assets consist of the following:
2020
2019
Gross
Book Value
Accumulated
Amortization
Net Book
Value
Gross
Book Value
Accumulated
Amortization
Net Book
Value
(Stated in millions)
1,744 $
485 $
1,259 $
3,779 $
868 $
2,911
Customer Relationships . . $
Technology/Technical
Know-How . . . . . . . . . .
Tradenames . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . .
1,284
767
1,488
488
166
689
796
601
799
2,498
1,885
1,514
779
264
676
$
5,283 $
1,828 $
3,455 $
9,676 $
2,587 $
1,719
1,621
838
7,089
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.
3.65% Senior Notes due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3.90% Senior Notes due 2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.65% Senior Notes due 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.375% Guaranteed Notes due 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.00% Guaranteed Notes due 2032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.25% Notes due 2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.50% Notes due 2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.40% Senior Notes due 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.00% Senior Notes due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.30% Senior Notes due 2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.75% Senior Notes due 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.00% Guaranteed Notes due 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.00% Notes due 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.65% Senior Notes due 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.40% Senior Notes due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.63% Senior Notes due 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.00% Notes due 2038 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.95% Notes due 2041 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.13% Notes due 2043 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.00% Notes due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.70% Notes due 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.30% Senior Notes due 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.20% Senior Notes due 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
2020
2019
$
1,496
1,450
1,250
1,221
1,214
1,100
1,099
999
930
846
746
736
611
598
498
295
206
114
99
80
55
-
-
393
-
1,495
1,444
-
-
-
550
544
998
929
845
746
665
551
598
-
294
208
114
99
81
55
1,597
600
2,222
135
Amortization expense was $371 million in 2020, $618 million in 2019 and $673 million in 2018.
$
16,036
$
14,770
Based on the carrying value of intangible assets at December 31, 2020, amortization expense for the subsequent
five years is estimated to be as follows: 2021: $307 million, 2022: $304 million, 2023: $293 million, 2024:
$269 million and 2025: $259 million.
During the third quarter of 2020, Schlumberger issued $500 million of 1.40% Senior Notes due 2025 and
$350 million of 2.65% Senior Notes due 2030.
During the second quarter of 2020, Schlumberger issued €1.0 billion of 1.375% Guaranteed Notes due 2026,
$900 million of 2.65% Senior Notes due 2030 and €1.0 billion of 2.00% Guaranteed Notes due 2032.
During the second quarter of 2020, Schlumberger repurchased all $600 million of its 4.20% Senior Notes due
2021 and $935 million of its 3.30% Senior Notes due 2021. Schlumberger paid a premium of approximately
$40 million in connection with these repurchases. This premium was classified in Impairments & other in the
Consolidated Statement of Income (Loss). (See Note 3 – Charges and Credits.)
During the second quarter of 2020, Schlumberger established 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
60
61
euro, US dollar or other currencies. At December 31, 2020, Schlumberger had not issued any debt under this
program.
During the first quarter of 2020, Schlumberger issued €400 million of 0.25% Notes due 2027 and €400 million of
0.50% Notes due 2031.
During the fourth quarter of 2019, Schlumberger repurchased the remaining $416 million of its 3.00% Senior
Notes due 2020; $126 million of its 4.50% Senior Notes due 2021; $500 million of its 4.20% Senior Notes due
2021; and $106 million of its 3.60% Senior Notes due 2022. Schlumberger paid a premium of $28 million in
connection with these repurchases. This premium, net of related credits, was classified as Impairments & other in
the Consolidated Statement of Income (Loss). (See Note 3 – Charges and Credits.)
During the third quarter of 2019, Schlumberger issued €500 million of 0.00% Notes due 2024, €500 million of
0.25% Notes due 2027 and €500 million of 0.50% Notes due 2031.
During the third quarter of 2019, Schlumberger repurchased $783 million of its 3.00% Senior Notes due 2020
and $321 million of its 3.625% Senior Notes due 2022. Schlumberger paid a premium of $29 million in
connection with these repurchases. This premium was classified as Impairments & other in the Consolidated
Statement of Income (Loss). (See Note 3 – Charges and Credits.)
During the second quarter of 2019, Schlumberger completed a debt exchange offer, pursuant to which it issued
$1.500 billion in principal of 3.90% Senior Notes due 2028 (the “New Notes”) in exchange for $401 million of
3.00% Senior Notes due 2020, $234 million of 3.63% Senior Notes due 2022 and $817 million of 4.00% Senior
Notes due 2025. In connection with the exchange of principal, Schlumberger paid a premium of $48 million,
substantially all of which was in the form of New Notes. This premium is being amortized as additional interest
expense over the term of the New Notes.
During the first quarter of 2019 Schlumberger issued $750 million of 3.75% Senior Notes due 2024 and
$850 million of 4.30% Senior Notes due 2029.
At December 31, 2020, Schlumberger had committed credit facility agreements with commercial banks
aggregating $6.25 billion, of which $5.86 billion was available and unused. These committed facilities support
commercial paper programs in the United States and Europe, of which $2.75 billion matures in February 2023,
$2.0 billion matures in February 2025 and $1.5 billion matures in July 2025. Schlumberger also has a
€1.54 billion committed revolving credit facility that expires in the second quarter of 2021 but can be extended at
Schlumberger’s option for up to an additional year. At December 31, 2020, no amounts had been drawn under
this facility. Interest rates and other terms of borrowing under these lines of credit vary by facility.
Commercial paper borrowings are classified as long-term debt to the extent they are backed up 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 programs at
December 31, 2020 were $0.4 billion, all of which was classified in Long-term debt in the Consolidated Balance
Sheet. At December 31, 2019, borrowings under the commercial paper programs were $2.2 billion, all of which
was classified in Long-term debt in the Consolidated Balance Sheet.
The weighted average interest rate on variable rate debt as of December 31, 2020 was 1.0%.
Long-term Debt as of December 31, 2020 is due as follows: $1.9 billion in 2022, $1.9 billion in 2023,
$1.4 billion in 2024, $1.5 billion in 2025, $2.0 billion in 2026, $1.1 billion in 2027 and $6.3 billion thereafter.
The fair value of Schlumberger’s Long-term Debt at December 31, 2020 and December 31, 2019 was
$17.3 billion and $15.3 billion, respectively, and was estimated based on quoted market prices.
Schlumberger Limited fully and unconditionally guarantees the securities issued by certain of its subsidiaries,
including securities issued by Schlumberger Investment SA and Schlumberger Finance Canada Ltd., both
wholly-owned subsidiaries of Schlumberger Limited.
10. Derivative Instruments and Hedging Activities
As a multinational company, Schlumberger conducts its business in over 120 countries. Schlumberger’s
functional currency is primarily the US dollar. Approximately 73% of Schlumberger’s revenues in 2020 were
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 uses foreign currency forward contracts to provide a hedge against a portion of these
cash flow risks. These contracts are accounted for as cash flow hedges, with the 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.
Schlumberger is also exposed to risks on future cash flows relating to certain of its fixed rate debt denominated
in currencies other than the functional currency. Schlumberger uses cross-currency swaps to provide a hedge
against these cash flow risks. Included in Other Assets was $427 million at December 31, 2020 ($41 million at
December 31, 2019) and included in Other Liabilities was $13 million at December 31, 2020 ($38 million at
December 31, 2019) relating to the fair value of outstanding cross-currency swap derivatives. The fair value was
determined using a model with inputs that are observable in the market or can be derived or collaborated by
observable data.
During 2019, a US-dollar functional currency subsidiary of Schlumberger issued €1.5 billion of Euro-
denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of
€1.5 billion in order to hedge changes in the fair value of its €0.5 billion 0.00% Notes due 2024, €0.5 billion
0.25% Notes due 2027 and €0.5 billion 0.50% Notes due 2031. These cross-currency swaps effectively convert
the Euro-denominated notes to US-dollar denominated debt with fixed annual interest rates of 2.29%, 2.51% and
2.76%, respectively.
During the first quarter of 2020, a US-dollar functional currency subsidiary of Schlumberger issued €0.8 billion
of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate notional amount of
€0.8 billion in order to hedge changes in the fair value of its €0.4 billion of 0.25% Notes due 2027 and
€0.4 billion of 0.50% Notes due 2031. These cross-currency swaps effectively convert the Euro-denominated
notes to US-dollar denominated debt with fixed annual interest rates of 1.87% and 2.20%, respectively.
During the second quarter of 2020, a US-dollar functional currency subsidiary of Schlumberger issued
€2.0 billion of Euro-denominated debt. Schlumberger entered into cross-currency swaps for an aggregate
notional amount of €2.0 billion in order to hedge changes in the fair value of its €1.0 billion of 1.375%
Guaranteed Notes due 2026 and €1.0 billion of 2.00% Guaranteed Notes due 2032. These cross-currency swaps
effectively convert the swapped portion of the Euro-denominated notes to US-dollar denominated debt with fixed
annual interest rates of 2.77% and 3.49%, respectively.
During the third quarter of 2020, a Canadian dollar functional currency subsidiary of Schlumberger issued
$0.5 billion of US dollar denominated debt. Schlumberger entered into cross-currency swaps for an aggregate
notional amount of $0.5 billion in order to hedge changes in the fair value of its $0.5 billion 1.40% Senior Notes
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63
due 2025. These cross-currency swaps effectively convert the US dollar notes to Canadian dollar denominated
debt with a fixed annual interest rate of 1.73%.
Schlumberger is exposed to changes in the fair value of assets and liabilities denominated in currencies other
than the functional currency. While Schlumberger uses foreign currency forward contracts 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 is recorded on the Consolidated Balance Sheet and changes in
the fair value are recognized in the Consolidated Statement of Income (Loss), as are changes in the fair value of
the hedged item. Transaction losses of $21 million in 2020 and transaction gains of $2 million in 2019 and
$1 million in 2018 were recognized in the Consolidated Statement of Income (Loss) net of related hedging
activities.
At December 31, 2020, contracts were outstanding for the US dollar equivalent of $8.6 billion in various foreign
currencies, of which $6.4 billion relates to hedges of debt denominated in currencies other than the functional
currency.
Other than the previously mentioned cross-currency swaps, the fair value of the other outstanding derivatives was
not material at December 31, 2020 and 2019.
The effect of derivative instruments designated as hedges and those not designated as hedges on the Consolidated
Statement of Income (Loss) was as follows:
(Stated in millions)
Gain (Loss) Recognized in Income (Loss)
2020
2019
2018
Consolidated Statement
of Income (Loss) Classification
Derivatives designated as cash
flow hedges:
Cross currency swap . . . . . . . . . . $
Foreign exchange contracts . . . .
$
Derivatives not designated as
hedges:
493 $
(5)
488 $
(35) $
(10)
(45) $
55 Cost of services/sales
(1) Cost of services/sales
54
Foreign exchange contracts . . . . $
(29) $
(5) $
40 Cost of services/sales
Schlumberger does not enter into derivative transactions for speculative purposes.
11. Stockholders’ Equity
Schlumberger is authorized to issue 4,500,000,000 shares of common stock, par value $0.01 per share, of which
1,392,325,960 and 1,384,515,345 shares were outstanding on December 31, 2020 and 2019, 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 Schlumberger Board of Directors. No shares of preferred stock have been
issued.
Accumulated Other Comprehensive Loss consists of the following:
Currency
Translation
Adjustments
Marketable
Securities
Cash Flow
Hedges
(Stated in millions)
Pension and
Other
Postretirement
Benefit Plans
Total
Balance, January 1, 2018 . . . . . . $
Reclassification to Retained
Earnings of stranded tax
effects resulting from US tax
reform . . . . . . . . . . . . . . . . . .
Other comprehensive loss
before reclassifications . . . .
Amounts reclassified from
accumulated other
comprehensive loss . . . . . . .
Income taxes . . . . . . . . . . . .
Balance, December 31,
2018 . . . . . . . . . . . . . . . . . . .
Other comprehensive loss
before reclassifications . . . .
Amounts reclassified from
accumulated other
comprehensive loss . . . . . . .
Income taxes . . . . . . . . . . . .
Balance, December 31,
2019 . . . . . . . . . . . . . . . . . . .
Other comprehensive loss
before reclassifications . . . .
Amounts reclassified from
accumulated other
comprehensive loss . . . . . . .
Income taxes . . . . . . . . . . . .
(2,139) $
13 $
3 $
(2,151) $
(4,274)
-
(191)
-
-
(2,330)
67
-
-
(2,263)
(239)
-
-
–
(11)
-
-
2
-
-
-
2
-
-
-
-
(16)
1
-
(12)
(32)
10
-
(34)
(90)
54
-
(109)
(186)
182
(18)
(109)
(404)
183
(18)
(2,282)
(4,622)
127
162
83
(71)
93
(71)
(2,143)
(4,438)
(247)
(576)
114
(38)
168
(38)
Balance, December 31, 2020 . . . $
(2,502) $
2 $
(70) $
(2,314) $
(4,884)
Other comprehensive loss was $447 million in 2020 and $239 million in 2018. Other comprehensive income was
$184 million in 2019.
12. 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 may be granted stock options under Schlumberger stock option plans. 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 10
years, and the options generally vest in increments over five years.
64
65
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:
The total intrinsic value of options exercised during the years ended December 31, 2019 and 2018 was $4 million
and $15 million, respectively. There were no stock options exercised during the year ended December 31, 2020.
2020
2019
2018
Restricted Stock
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected option life in years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average fair value per share . . . . . . . . . . . . . . . . . . . . . . . . .
$
5.2%
26%
1.7%
7.0
5.07
$
4.8%
25%
2.7%
7.0
6.21
$
2.6%
26%
2.6%
7.0
17.37
The following table summarizes information related to options outstanding and options exercisable as of
December 31, 2020:
Options Outstanding
Options Exercisable
(Shares stated in thousands)
Exercise prices range
$38.75 - $69.98 . . . . . . . . . . . . . . . .
$70.31 - $76.74 . . . . . . . . . . . . . . . .
$77.10 - $83.15 . . . . . . . . . . . . . . . .
$83.89 - $88.77 . . . . . . . . . . . . . . . .
$90.00 - $114.83 . . . . . . . . . . . . . . .
Options
Outstanding
15,562
9,462
7,303
8,549
7,396
48,272
Weighted-
Average
Remaining
Contractual Life
(in years)
Weighted-
Average
Exercise
Price
Options
Exercisable
Weighted-
Average
Exercise Price
7.7
2.1
5.4
3.0
3.4
4.8
$
$
$
$
$
$
44.48
72.10
79.29
85.96
95.79
70.37
3,846
9,399
5,425
7,097
7,396
33,163
$
$
$
$
$
$
56.69
72.06
79.52
85.66
95.79
79.70
The weighted-average remaining contractual life of stock options exercisable as of December 31, 2020 was 3.3
years.
The following table summarizes stock option activity during the years ended December 31, 2020, 2019 and 2018:
(Shares stated in thousands)
2020
Weighted-
Average
2019
Weighted-
Average
Shares
Exercise Price Shares
Exercise Price Shares
2018
Weighted-
Average
Exercise Price
Outstanding at beginning of
year . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . .
46,269 $
$
7,468
-
$
(5,465) $
75.65
38.75
-
71.86
$
43,529
$
5,604
(1,045) $
(1,819) $
79.36
41.50
38.50
74.69
$
47,210
$
2,121
(936) $
(4,866) $
Outstanding at year-end . . . . . . .
48,272 $
70.37
46,269
$
75.65
43,529
$
79.13
76.95
54.20
84.19
79.36
Stock options outstanding and stock options exercisable as of December 31, 2020 had no intrinsic value.
Schlumberger grants performance share units to its executive officers. The number of shares earned is
determined at the end of each performance period based on Schlumberger’s achievement of certain predefined
targets as defined in the underlying performance share unit agreement. In the event Schlumberger exceeds the
predefined target, shares for up to the maximum of 250% of the target award may be awarded. In the event
Schlumberger falls below the predefined target, a reduced number of shares may be awarded. If Schlumberger
falls below the threshold award performance level, no shares will be awarded. As of December 31, 2020,
3.8 million performance share units were outstanding assuming the achievement of 100% of target.
All other restricted stock awards generally vest at the end of three years or vest ratably in equal tranches over a
three-year period.
Restricted stock awards do not pay dividends or have voting rights prior to vesting. Accordingly, the fair value of
a 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 prior to vesting.
The following table summarizes information related to restricted stock transactions:
(Shares stated in thousands)
2020
2019
2018
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 . . . . . . . . . . . . . . . . . . . .
$
11,822
10,637
$
(3,059) $
(637) $
49.86
26.53
71.56
45.95
$
6,951
7,888
$
(2,722) $
(295) $
70.13
35.56
72.09
57.41
$
5,428
3,204
$
(982) $
(699) $
72.33
70.54
77.62
70.67
Unvested at year-end . . . . . . . . . .
18,763
$
35.24
11,822
$
49.86
6,951
$
70.13
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.0%
43%
0.88%
5.38
$
$
5.3%
30%
2.3%
5.81
$
2.9%
22%
1.6%
9.01
2020
2019
2018
66
67
Total Stock-based Compensation Expense
The components of net deferred tax assets (liabilities) were as follows:
The following summarizes stock-based compensation expense recognized in income:
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DSPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
2020
2019
2018
$
$
$
75
293
29
$
99
274
32
397
$
405
$
134
179
32
345
At December 31, 2020, there was $335 million of total unrecognized compensation cost related to nonvested
stock-based compensation arrangements, of which $198 million is expected to be recognized in 2021,
$102 million in 2022, $26 million in 2023, and $9 million in 2024.
As of December 31, 2020, approximately 16 million shares of Schlumberger common stock were available for
future grants under Schlumberger’s stock-based compensation programs.
13. Income Taxes
Schlumberger operates in more than 100 tax jurisdictions, where statutory tax rates generally vary from 0% to
35%.
Income (loss) before taxes subject to United States and non-United States income taxes was as follows:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
2020
2019
2018
$
$
$
(4,394)
(6,904)
$
(8,991)
(1,427)
(55)
2,679
(11,298)
$
(10,418)
$
2,624
Schlumberger recorded net pretax charges of $12.515 billion in 2020 ($3.961 billion in the US and $8.554 billion
outside the US); $12.901 billion in 2019 ($8.769 billion in the US and $4.132 billion outside the US); and
$141 million in 2018 ($102 million in the US and $39 million outside the US). These charges and credits are
included in the table above and are more fully described in Note 3 – Charges and Credits.
(Stated in millions)
2020
2019
$
(881)
421
151
59
(171)
—
402
(1,790)
144
434
155
(220)
312
474
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in non-US subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
(19)
$
(491)
The deferred tax balances at December 31, 2020 and 2019 were net of valuation allowances relating to net
operating losses in certain countries of $127 million and $82 million, respectively. Additionally, the deferred tax
balances at December 31, 2020 were net of valuation allowances relating to foreign tax credits and capital losses
of $106 million and $54 million, respectively.
Approximately $353 million of the $421 million deferred tax asset relating to net operating losses at
December 31, 2020 can be carried forward indefinitely. The vast majority of the remaining balance expires at
various dates between 2030 and 2040.
Schlumberger generally does not provide for taxes related to the undistributed earnings of its subsidiaries
because such earnings either would not be taxable when remitted or they are considered to be indefinitely
reinvested.
The components of Tax expense (benefit) 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)
2020
2019
2018
$
$
$
$
21
5
410
436
(824)
(67)
(563)
206
(1,248)
$
$
(81)
11
770
700
(660)
(93)
(257)
(1)
(1,011)
$
(812)
$
(311)
$
124
(50)
618
692
(143)
(4)
(69)
(29)
(245)
447
68
69
A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:
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:
US federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-US income taxed at different rates . . . . . . . . . . . . . . . . . . .
Charges and credits (See Note 3)
. . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020
2019
2018
21%
-
-
(14)
-
7%
21%
-
-
(19)
1
3%
21%
(2)
(2)
-
-
17%
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 that are resolved with the tax 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.
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ecuador
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 - 2020
2016 - 2020
2012 - 2020
2015 - 2020
2016 - 2020
2015 - 2020
2017 - 2020
2017 - 2020
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.
A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the
years ended December 31, 2020, 2019 and 2018 is as follows:
14. Leases and Lease Commitments
(Stated in millions)
2020
2019
2018
$
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to the current year . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1,301
76
78
(3)
(15)
(87)
(79)
$
1,433
86
65
2
(50)
(176)
(59)
$
1,271
$
1,301
$
1,393
88
145
(41)
(22)
(57)
(73)
1,433
The amounts above exclude accrued interest and penalties of $184 million, $188 million and $205 million at
December 31, 2020, 2019 and 2018, respectively. Schlumberger classifies interest and penalties relating to
uncertain tax positions within Tax expense (benefit) in the Consolidated Statement of Income (Loss).
Schlumberger’s leasing activities primarily consist of operating leases for administrative offices, manufacturing
facilities, research centers, service centers, sales offices and certain equipment. Total operating lease expense,
which approximates cash paid and includes short-term leases, was $1.4 billion in 2020 and $1.7 billion in each of
2019 and 2018.
Maturities of operating lease liabilities as of December 31, 2020 were as follows:
(Stated in millions)
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts recognized in balance sheet
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . .
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
256
200
160
128
92
318
1,154
(143)
1,011
248
763
1,011
70
71
Operating lease assets of $0.8 billion and $1.3 billion as of December 31, 2020 and 2019, respectively, were
included in Other Assets in the Consolidated Balance Sheet. Operating lease liabilities as of December 31, 2019
were $1.0 billion, of which $0.2 billion was classified in Accounts payable and accrued liabilities and
$0.8 billion was classified in Other Liabilities in the Consolidated Balance Sheet.
The weighted-average remaining lease term as of December 31, 2020 was 8 years. The weighted-average
discount rate used to determine the operating lease liability as of December 31, 2020 was 3.2%.
15. Contingencies
Schlumberger is 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 currently pending legal proceeding is remote. However, litigation is inherently uncertain, and it is
not possible to predict the ultimate disposition of any of these proceedings.
16. Segment Information
During 2020, Schlumberger restructured its organization in order to prepare for a changing industry future. This
new structure is aligned with customer workflows and is directly linked to Schlumberger’s corporate strategy, a
key element of which is customer collaboration.
The new organization consists of four Divisions that combine and integrate Schlumberger’s technologies,
enhancing the portfolio of capabilities that support the emerging long-term growth opportunities in each of these
market segments.
The four Divisions, representing Schlumberger’s segments, are:
•
•
Digital & Integration – Combines Schlumberger’s software and seismic businesses with its integrated
offering of Asset Performance Solutions.
Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to
optimizing reservoir productivity and performance.
• Well Construction – Combines the full portfolio of products and services to optimize well placement
and performance, maximize drilling efficiency, and improve wellbore assurance.
•
Production Systems – Develops technologies and provides expertise that enhance production and
recovery from subsurface reservoirs to the surface, into pipelines, and to refineries.
Financial information for the years ended December 31, 2020, 2019 and 2018, by segment, is as follows:
(Stated in millions)
2020
Assets
Depreciation
and
Amortization
Capital
Investments
Revenue
Income (Loss)
Before Taxes
$
Digital & Integration . . . . . . . .
Reservoir Performance . . . . . . .
Well Construction . . . . . . . . . .
Production Systems . . . . . . . . .
Eliminations & other . . . . . . . .
$
3,076
5,602
8,605
6,650
(332)
Goodwill and intangible assets
Cash and short-
term investments . . . . . . . . . .
All other assets . . . . . . . . . . . . .
Corporate & other (1)
. . . . . . . .
Interest income (2) . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . .
Charges & credits (4) . . . . . . . . .
$
3,595
3,489
4,768
4,665
940
16,436
3,006
5,535
731 $
353
866
623
(172)
2,401
(681)
31
(534)
(12,515)
$
615
549
580
338
276
413
384
420
240
63
208
$
23,601
$
(11,298) $
42,434
$
2,566
$
1,520
Revenue
Income (Loss)
Before Taxes
Digital & Integration . . . . . . . .
Reservoir Performance . . . . . . .
Well Construction . . . . . . . . . .
Production Systems . . . . . . . . .
Eliminations & other . . . . . . . .
$
$
4,145
9,299
11,880
8,167
(574)
Goodwill and intangible
assets . . . . . . . . . . . . . . . . . . .
Cash and short-term
investments . . . . . . . . . . . . . .
All other assets . . . . . . . . . . . . .
. . . . . . . .
Corporate & other (1)
Interest income (2) . . . . . . . . . . .
Interest expense (3)
. . . . . . . . . .
Charges & credits (4) . . . . . . . . .
$
882
992
1,429
847
(172)
3,978
(957)
33
(571)
(12,901)
(Stated in millions)
2019
Assets
Depreciation
and
Amortization
Capital
Investments
$
6,388
5,198
6,913
5,625
1,314
$
1,069
807
656
390
250
1,020
569
650
384
113
23,130
2,167
5,577
417
$
32,917
$
(10,418)
$
56,312
$
3,589
$
2,736
72
73
(Stated in millions)
Revenue by geographic area for the years ended December 31, 2020, 2019 and 2018 is as follows:
Income
Before
Taxes
Revenue
$
Digital & Integration . . . . . . . . . . .
Reservoir Performance . . . . . . . . . .
Well Construction . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . .
$
3,820
10,050
11,310
8,168
(533)
Goodwill and intangible assets . . . .
Cash and short-term
investments . . . . . . . . . . . . . . . . .
All other assets . . . . . . . . . . . . . . . .
Corporate & other (1) . . . . . . . . . . . .
Interest income (2) . . . . . . . . . . . . . .
. . . . . . . . . . . . .
Interest expense (3)
Charges & credits (4) . . . . . . . . . . . .
$
882
1,169
1,465
843
(172)
4,187
(937)
52
(537)
(141)
2018
Assets
6,784
7,396
7,112
5,632
1,448
33,658
2,777
5,700
Depreciation
and
Amortization
Capital
Investments
$
$
894
850
713
423
237
1,091
899
769
343
139
439
(Stated in millions)
2020
2019
2018
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
5,478
3,472
5,963
8,567
121
$
10,446
4,544
7,682
10,016
229
$
23,601
$
32,917
$
11,730
4,013
7,113
9,582
377
32,815
Revenue is based on the location where services are provided and products are sold.
During each of the three years ended December 31, 2020, 2019 and 2018, 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 2020, 2019 and 2018 was $4.5 billion, $9.3 billion and $10.1 billion,
respectively.
$
32,815
$
2,624
$
70,507
$
3,556
$
3,241
North America and International revenue disaggregated by segment was as follows:
(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.
(2)
(3)
Interest income excludes amounts which are included in the segments’ income (2020: $2 million; 2019: $8 million;
2018: $8 million).
Interest expense excludes amounts which are included in the segments’ income (2020: $28 million; 2019: $38 million;
2018: $38 million).
(4)
See Note 3 – Charges and Credits.
Segment assets consist of receivables, inventories, fixed assets, multiclient seismic data and APS investments.
Capital investments includes capital expenditures, APS investments and multiclient seismic data cost capitalized.
Depreciation and amortization includes depreciation of property, plant and equipment and amortization of
intangible assets, multiclient seismic data costs and APS investments.
(Stated in millions)
2020
North
America
International
Eliminations
& other
Total
Digital & Integration . . . . . . . . . . . . . . . . . . . . . . .
Reservoir Performance . . . . . . . . . . . . . . . . . . . . . .
Well Construction . . . . . . . . . . . . . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . . .
$
$
573
1,547
1,453
1,921
(16)
$
2,496
4,043
6,956
4,702
(195)
$
7
12
196
27
(121)
3,076
5,602
8,605
6,650
(332)
$
5,478
$
18,002
$
121
$
23,601
(Stated in millions)
2019
North
America
International
Eliminations
& other
Total
Digital & Integration . . . . . . . . . . . . . . . . . . . . . .
Reservoir Performance . . . . . . . . . . . . . . . . . . . . .
Well Construction . . . . . . . . . . . . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . .
$
$
865
3,779
2,814
3,053
(65)
$
3,272
5,509
8,809
5,059
(407)
$
8
11
257
55
(102)
4,145
9,299
11,880
8,167
(574)
$
10,446
$
22,242
$
229
$
32,917
74
75
(Stated in millions)
Net pension cost (credit) for 2020, 2019 and 2018 included the following components:
2018
North
America
International
Eliminations
& other
Total
Digital & Integration . . . . . . . . . . . . . . . . . . . . . .
Reservoir Performance . . . . . . . . . . . . . . . . . . . . .
Well Construction . . . . . . . . . . . . . . . . . . . . . . . .
Production Systems . . . . . . . . . . . . . . . . . . . . . . .
Eliminations & other . . . . . . . . . . . . . . . . . . . . . .
$
$
786
4,975
2,911
3,139
(81)
$
2,894
5,066
8,083
4,966
(301)
$
140
9
316
63
(151)
3,820
10,050
11,310
8,168
(533)
$
11,730
$
20,708
$
377
$
32,815
Fixed Assets less accumulated depreciation by geographic area are as follows:
(Stated in millions)
2020
2019
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe/CIS/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East & Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
1,588
841
1,840
2,353
204
$
6,826
$
3,326
912
2,309
2,502
221
9,270
17. 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 US 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 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 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:
Discount rate . . . . . . . . . . . . . . . . . . . .
Compensation increases . . . . . . . . . . .
Return on plan assets . . . . . . . . . . . . . .
International
2018
2020
2019
2018
3.70%
4.00%
7.25%
3.27%
4.82%
6.71%
4.00%
4.83%
7.22%
3.55%
4.81%
7.40%
2020
3.30%
4.00%
6.60%
US
2019
4.30%
4.00%
6.60%
76
US
2019
2020
(Stated in millions)
International
2018
2020
2019
2018
Service cost - benefits earned during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
55
$
49
$
59
$
140
$
112
$
138
Interest cost on projected benefit
obligation . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . .
Amortization of net loss . . . . . . . . . . . . . . . .
Settlement charge . . . . . . . . . . . . . . . . . . . . .
148
(233)
8
41
-
180
(232)
10
29
37
167
(248)
13
47
-
301
(591)
-
159
-
333
(592)
7
70
-
304
(584)
10
140
-
$
19
$
73
$
38
$
9
$
(70)
$
8
Certain of Schlumberger’s deferred benefit pension plans offered former Schlumberger employees, who had not
yet commenced receiving their pension benefits, an opportunity to receive a lump sum payout of their vested
pension benefit. Schlumberger’s pension plans paid $257 million from pension plan assets to those who accepted
this offer, thereby reducing its pension benefit obligations. These transactions resulted in a non-cash pension
settlement charge of $37 million, representing the immediate recognition of the related deferred actuarial losses
in Accumulated Other Comprehensive Loss, in the fourth quarter of 2019. See Note 3 – Charges and Credits.
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.60%
4.00%
3.30%
4.00%
2.38%
4.82%
3.27%
4.83%
US
International
2020
2019
2020
2019
77
Actuarial losses arising during 2020 and 2019 were primarily attributable to decreases in the discount rate used to
determine the PBO. As of December 31, 2020, the PBO and fair value of plan assets for plans with PBOs in
excess of plan assets were $9.4 billion and $8.3 billion, respectively. The related ABO for these plans was
$9.1 billion at December 31, 2020.
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
11 - 20%
70 - 83
0 - 3
5 - 10
US
2020
International
2019
Target
2020
2019
15%
76
3
6
22% 40 - 54%
70
2
6
28 - 43
0 - 5
15 - 22
43%
36
4
17
50
31
4
15
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 rate of return on assets assumptions reflect the long-term 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, 2020 and 2019, by asset category, is
presented below and was determined based on valuation techniques categorized as follows:
•
•
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.
The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:
Change in Projected Benefit Obligations
Projected benefit obligation at beginning of year . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contribution by plan participants . . . . . . . . . . . . . . . . .
Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency effect
Settlement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Projected benefit obligation at end of year . . . . . . . . . .
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 . . . . . . . . . . . . . . . .
Settlement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
$
$
$
$
(Stated in millions)
US
International
2020
2019
2020
2019
$
4,593
55
148
-
370
-
-
(226)
$
4,278
49
180
-
535
-
(240)
(209)
$
9,647
140
301
94
1,233
68
(5)
(338)
4,940
$
4,593
$
11,140
$
$
$
$
$
4,236
760
-
6
-
-
(226)
4,776
(164)
(199)
35
$
$
$
$
3,748
931
-
6
-
(240)
(209)
4,236
(357)
(357)
-
$
$
$
$
9,363
1,282
72
20
94
-
(338)
10,493
(647)
(849)
202
(164)
$
(357)
$
(647)
$
423
1
424
4,739
$
$
$
622
9
631
4,345
$
$
$
1,981
-
1,981
10,844
$
$
$
8,111
112
333
63
1,304
50
(17)
(309)
9,647
7,872
1,676
59
19
63
(17)
(309)
9,363
(284)
(602)
318
(284)
1,638
-
1,638
9,376
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
(“ABO”) represents the actuarial present value of benefits based on employee service and compensation but does
not include an assumption about future compensation levels.
78
79
•
Level Three: The use of significant unobservable inputs that typically require the use of management’s
estimates of assumptions that market participants would use in pricing.
US Plan Assets
2020
2019
(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:
$
140
$ 127
$
13
$
. . . . . . . . . . . . . . . . . . . . .
US (a)
International (b) . . . . . . . . . . . . . .
527
186
441
182
86
4
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) . . . . . . . . . . . . . . .
1,945
-
1,945
1,658
180
1,478
21
204
95
-
-
-
21
-
-
-
-
-
-
-
-
204
95
$
73
$
59
$
14
$
605
320
500
315
105
5
1,687
-
1,687
1,256
74
1,182
21
181
93
-
-
-
21
-
-
-
-
-
-
-
-
181
93
Total
. . . . . . . . . . . . . . . . . . . . . . . .
$ 4,776
$ 930
$ 3,547
$ 299
$ 4,236
$ 948
$ 3,014
$ 274
International Plan Assets
2020
2019
(Stated in millions)
Total
Level
One
Level
Two
Level
Three
Total
Level
One
Level
Two
Level
Three
Asset Category:
Cash and Cash
Equivalents . . . . . . . . . .
$
457
$
215
$
242
$
Equity Securities:
US (a)
. . . . . . . . . . . . . .
International (b) . . . . . . .
2,797
1,711
2,393
1,615
404
96
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 . . . . . . . . . . . . . .
1,260
-
1,260
2,405
213
2,192
122
851
200
690
-
-
-
-
122
-
-
-
-
-
-
-
-
-
851
200
690
$
351
$
166
$
185
$
2,834
1,871
1,105
1,602
161
623
183
633
2,347
1,723
-
5
-
-
-
-
487
148
1,105
1,597
161
-
-
-
-
-
-
-
-
-
623
183
633
Total
. . . . . . . . . . . . . . . . .
$ 10,493
$ 4,436
$ 4,316
$ 1,741
$ 9,363
$ 4,241
$ 3,683
$ 1,439
(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 funds of funds.
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 expects to contribute approximately $20 million to its
postretirement benefit plans in 2021, subject to market and business conditions.
80
81
Postretirement Benefits Other Than Pensions
The changes in the accumulated postretirement benefit obligation, plan assets and funded status were as follows:
Schlumberger provides certain healthcare benefits to certain former US employees who have retired. Effective
April 1, 2015, Schlumberger changed 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 subsidizes 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 by 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
2020
2019
2020
2019
2018
2.60%
-
7.25%
4.50%
3.30%
-
7.50%
4.50%
3.30%
7.00%
7.25%
4.50%
4.30%
7.00%
7.50%
4.50%
3.70%
7.00%
7.00%
5.00%
rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2031
2031
2031
2031
2026
The net periodic benefit credit for the US postretirement medical plan included the following components:
(Stated in millions)
2020
2019
2018
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service credit . . . . . . . . . . . . . . . . . . . . . . . . .
Curtailment gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
31
36
(70)
(25)
(69)
$
29
45
(64)
(28)
-
32
43
(63)
(28)
-
$
(97)
$
(18)
$
(16)
Due to the actions taken by Schlumberger to reduce its global workforce during 2020, Schlumberger experienced
a significant reduction in the expected aggregate years of future service of its employees in its US postretirement
medical plan. Accordingly, Schlumberger recorded a curtailment gain of $69 million during the second quarter of
2020 relating to this plan. The curtailment gain includes recognition of the decrease in the benefit obligation as
well as a portion of the previously unrecognized prior service credit, reflecting the reduction in expected years of
future service. As a result of the curtailment, Schlumberger performed a remeasurement of the plan, which had
an immaterial impact. This gain was classified in Impairments & other in the Consolidated Statement of
Loss. See Note 3 – Charges and Credits.
(Stated in millions)
2020
2019
Change in Projected Benefit Obligations
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contribution by plan participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Curtailment
$
$
1,193
31
36
8
64
(58)
(40)
Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1,234
$
Change in Plan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan assets at fair value at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions by plan participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan assets at fair value at end of year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset (Unfunded Liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts Recognized in Accumulated Other Comprehensive Loss
Actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service credit
$
$
$
$
$
$
$
$
$
1,185
221
8
(58)
1,356
122
(186)
(104)
(290)
$
1,106
29
45
8
65
(60)
-
1,193
997
240
8
(60)
1,185
(8)
(98)
(158)
(256)
The $122 million asset relating to this plan at December 31, 2020 was included in Other Assets while the
$8 million unfunded liability at December 31, 2019 was included in Postretirement Benefits in the Consolidated
Balance Sheet.
The assets of the US postretirement medical plan are invested 61% in equity securities and 39% in debt securities
at December 31, 2020. The fair value of these assets was primarily determined based on Level Two valuation
techniques.
82
83
Other Information
Accounts payable and accrued liabilities consist of the following:
The expected benefits to be paid under the US and International pension plans as well as the postretirement
medical plan are as follows:
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll, vacation and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billings and cash collections in excess of revenue . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Stated in millions)
Pension Benefits
US
International
Postretirement
Medical Plan
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
235
235
236
237
237
1,193
$
$
$
$
$
$
349
359
370
381
385
2,146
$
$
$
$
$
$
56
56
56
56
57
297
18. Supplementary Information
Cash paid for interest and income taxes was as follows:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
598
582
$
$
558
739
$
$
592
628
Interest and other income includes the following:
(Stated in millions)
2020
2019
2018
(Stated in millions)
2020
2019
$
2,937
1,524
941
3,040
4,790
1,445
910
3,518
8,442
$
10,663
$
$
Earnings of equity method investments . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain on marketable securities (see Note 3) . . . . . . . . . . . .
The change in Allowance for doubtful accounts is as follows:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts written off
$
$
$
(Stated in millions)
2020
2019
2018
$
91
33
39
$
45
41
—
163
$
86
$
89
60
—
149
(Stated in millions)
2020
2019
2018
$
255
58
(12)
$
249
5
1
241
15
(7)
249
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
301
$
255
$
Revenue in excess of billings related to contracts where revenue is recognized over time was $0.2 billion at both
December 31, 2020 and 2019. Such amounts are included within Receivables less allowance for doubtful
accounts in the Consolidated Balance Sheet.
84
85
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
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 (the
“Exchange Act”). 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.
internal control over financial reporting may not prevent or detect
Because of its inherent
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, 2020. In making this assessment, it used the criteria set forth in 2013 by the Committee of
Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on
this assessment Schlumberger’s management has concluded that, as of December 31, 2020, 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, 2020 has been
audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their
report which appears herein.
To the Board of Directors and Stockholders
of Schlumberger Limited
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheet of Schlumberger Limited and its subsidiaries (the
“Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income (loss),
comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended
December 31, 2020,
including the related notes (collectively referred to as the “consolidated financial
statements”). We also have audited the Company’s internal control over financial reporting as of December 31,
2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2020 and 2019 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2020 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, 2020, based on criteria established
in Internal Control – Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated 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 the Company’s consolidated financial statements and on
the Company’s internal control over financial reporting based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. 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.
Definition and Limitations of Internal Control over Financial Reporting
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
86
87
group. Evaluating management’s assumptions related to the cash flows to be derived from each reporting unit
and asset group involved evaluating the reasonableness of the assumptions used considering the Company’s past
and anticipated performance, external market and industry data, and evidence obtained through other areas of the
in the evaluation of the
audit. Professionals with specialized skill and knowledge were used to assist
appropriateness of the Company’s valuation approaches and reasonableness of the discount rate and valuation
multiples assumptions.
Uncertain Tax Positions
As described in Note 13 to the consolidated financial statements, the Company’s tax filings are subject to regular
audit by tax authorities, and those audits may result in assessments for additional taxes that 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.
The principal considerations for our determination that performing procedures related to uncertain tax positions
is a critical audit matter are the high degree of estimation uncertainty related to these liabilities due to the
in
uncertain and complex application of tax regulations and management applied significant
determining these liabilities, which in turn led to a high degree of auditor judgment, subjectivity, and effort in
performing procedures to evaluate management’s estimates.
judgment
Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection
with forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to the identification and recognition of uncertain tax positions. These
procedures also included, among others, (i) evaluating management’s process for developing the estimated
liabilities for uncertain tax positions, (ii) testing the completeness and reasonableness of uncertain tax positions
recorded in the consolidated financial statements, and (iii) evaluating material assessments received from the
relevant tax authorities. Professionals with specialized skill and knowledge were used to assist in evaluating the
reasonableness of assumptions used by management, including the reasonableness of management’s more-likely-
than-not determination under relevant tax laws and regulations in applicable jurisdictions.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
January 27, 2021
We have served as the Company’s auditor since 1952.
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,
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the
consolidated financial statements that were communicated or required to be communicated to the audit
committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements
and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matters below, providing separate opinions on the critical
audit matters or on the accounts or disclosures to which they relate.
Goodwill & Intangible Asset Impairment
As described in Note 3 to the consolidated financial statements, the Company recorded charges to goodwill
associated with certain reporting units and certain intangible assets during the first quarter of 2020. As described
by management, the goodwill relating to each of the Company’s reporting units is tested for impairment annually
as well as when an event, or change in circumstances, indicates an impairment may have occurred. Intangible
assets are assessed for impairment whenever events or changes in circumstances indicate their carrying values
may not be recoverable. Management determined that it was more likely than not that the fair value of certain of
its reporting units and asset groups were less than their carrying value. Therefore, management performed
interim impairment tests as of March 31, 2020. Management primarily used the income approach to estimate the
fair value of its reporting units and asset groups, but also considered the market approach to validate the results.
The market approach involves significant judgment in the selection of the appropriate peer group companies and
valuation multiples. Some of the more significant assumptions inherent in the income approach include the
estimated future net annual cash flows and the discount rate.
The principal considerations for our determination that performing procedures related to goodwill and intangible
asset impairment is a critical audit matter are the significant judgment by management in determining the fair
value of the reporting units and asset groups, which in turn led to a high degree of auditor judgment, subjectivity,
and effort in performing procedures and evaluating significant assumptions related to cash flows to be derived
from each reporting unit and asset group, the discount rate and valuation multiples.
Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection
with forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to management’s goodwill and intangible asset
tests. These
procedures also included, among others, testing management’s process for developing fair value estimates; which
included (i) evaluating the appropriateness of the income and market approaches; (ii) testing the completeness,
accuracy, and relevance of underlying data used in the approaches; and (iii) evaluating the significant
assumptions used by management to develop the cash flows to be derived from each reporting unit and asset
impairment
88
89
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 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 2020 that has materially affected, or is
reasonably likely to materially affect, Schlumberger’s internal control over financial reporting.
Item 9B. Other Information.
In 2013, Schlumberger completed the wind-down of its service operations in Iran. Prior to this, certain non-US
subsidiaries provided oilfield services to the National Iranian Oil Company and certain of its affiliates (“NIOC”).
Schlumberger’s residual transactions or dealings with the government of Iran in 2020 consisted of payments of
taxes and other typical governmental charges. Certain non-US subsidiaries of Schlumberger 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
services rendered in Iran prior to the wind-down and for the maintenance of such amounts previously received.
One non-US subsidiary also maintained an account at Tejarat for payment of local expenses such as taxes.
Schlumberger anticipates that it will discontinue dealings with Saderat and Tejarat following the receipt of all
amounts owed to Schlumberger for prior services rendered in Iran.
Quarterly Results
(Unaudited)
The following table summarizes Schlumberger’s results by quarter for the years ended December 31, 2020 and
2019.
(Stated in millions, except per share amounts)
Revenue (2)
Gross
Margin (1), (2)
Net Income
(Loss)
Attributable to
Schlumberger (2)
Earnings (Loss) per Share of
Schlumberger (2)
Basic
Diluted
Quarters 2020
First (3) . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Second (4)
. . . . . . . . . . . . . . . . . .
Third (5)
. . . . . . . . . . . . . . . . .
Fourth (6)
$
$
7,455
5,356
5,258
5,532
$
831
431
634
704
(7,376) $
(3,434)
(82)
374
(5.32) $
(2.47)
(0.06)
0.27
$
23,601
$
2,601
$
(10,518) $
(7.57) $
Quarters 2019
First . . . . . . . . . . . . . . . . . . . . . .
Second . . . . . . . . . . . . . . . . . . . .
Third (7) . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Fourth (8)
$
$
7,879
8,269
8,541
8,228
$
925
1,016
1,155
1,101
$
421
492
(11,383)
333
$
0.30
0.36
(8.22)
0.24
(5.32)
(2.47)
(0.06)
0.27
(7.57)
0.30
0.35
(8.22)
0.24
$
32,917
$
4,197
$
(10,137) $
(7.32)
$
(7.32)
(1) Gross margin equals Total Revenue less Cost of services and Cost of sales.
(2) Amounts may not add due to rounding.
(3) Net income (loss) attributable to Schlumberger in the first quarter of 2020 includes after-tax charges of $7.727 billion.
(4) Net income (loss) attributable to Schlumberger in the second quarter of 2020 includes after-tax charges of $3.502 billion.
(5) Net income (loss) attributable to Schlumberger in the third quarter of 2020 includes after-tax charges of $310 million.
(6) Net income (loss) attributable to Schlumberger in the fourth quarter of 2020 includes after-tax credits of $65 million.
(7) Net income (loss) attributable to Schlumberger in the third quarter of 2019 includes after-tax charges of $11.979 billion.
(8) Net
income (loss) attributable to Schlumberger in the fourth quarter of 2019 includes net after-tax charges of
$212 million.
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 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
90
91
PART III
Item 10. Directors, Executive Officers and Corporate Governance of Schlumberger.
See “Item 1. Business — Information About Our Executive Officers” of this Report for Item 10 information
regarding executive officers of Schlumberger. The information set forth under the captions “Election of
Directors,” “Stock Ownership Information — Delinquent Section 16(a) Reports,” “Corporate Governance —
Identifying Candidates for Director Nominations” and “Corporate Governance — Board Responsibilities,
Committees and Attendance — Committees — Audit Committee” in Schlumberger’s 2021 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
at https://www.slb.com/who-we-are/guiding-principles/
our-code-of-conduct. 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 https://
www.slb.com/who-we-are/guiding-principles/our-code-of-conduct.
is posted on its website
Item 11. Executive Compensation.
forth under
The information set
the captions “Compensation Discussion and Analysis,” “Executive
Compensation Tables and Accompanying Narrative,” “Compensation Discussion and Analysis — Compensation
Committee Report” and “Director Compensation in Fiscal Year 2020” in Schlumberger’s 2021 Proxy Statement
is incorporated herein by reference.
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 (Loss) for the three years ended
December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Comprehensive Income (Loss) for the three
years ended December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheet at December 31, 2020 and 2019 . . . . . . . .
Consolidated Statement of Cash Flows for the three years ended
December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Stockholders’ Equity for the three years
ended December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm . . . . . . . . . .
Quarterly Results (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page(s)
42
43
44
45
46 and 47
48 to 85
87
90
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: See exhibits listed under Part (b) below.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
(b) Exhibits
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 2021 Proxy Statement is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information under the captions “Corporate Governance — Director Independence” and “Corporate
Governance — Other Key Governance Policies and Practices — Policies and Procedures for Approval of Related
Person Transactions” in Schlumberger’s 2021 Proxy Statement is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information under the caption “Ratification of Appointment of Independent Auditors for 2021” in
Schlumberger’s 2021 Proxy Statement is incorporated herein by reference.
92
93
INDEX TO EXHIBITS
Articles of Incorporation of Schlumberger Limited (Schlumberger N.V.) (incorporated by reference to
Exhibit 3.1 to Schlumberger’s Current Report on Form 8-K filed on April 6, 2016)
Amended and Restated By-Laws of Schlumberger Limited (Schlumberger N.V.) (incorporated by
reference to Exhibit 3 to Schlumberger’s Current Report on Form 8-K filed on July 22, 2019)
Description of Common Stock of Schlumberger Limited (*)
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, 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, 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)
Second Supplemental Indenture dated as of June 26, 2020, by and among Schlumberger Investment
SA, as issuer, Schlumberger Limited, as guarantor, and The Bank of New York Mellon, as trustee
(including form of global notes representing 2.650% Senior Notes due 2030) (incorporated by
reference to Exhibit 4.1 to Schlumberger’s Current Report on Form 8-K filed on June 26, 2020)
Officers’ Certificate dated as of August 11, 2020, executed by Schlumberger Investment SA, as issuer,
and Schlumberger Limited, as guarantor (including form of global notes representing 2.650% Senior
Notes due 2030) (incorporated by reference to Exhibit 4.1 to Schlumberger’s Current Report on Form
8-K filed on August 11, 2020)
Indenture dated as of September 18, 2020, by and among Schlumberger Finance Canada Ltd., as
issuer, Schlumberger Limited, as guarantor, and The Bank of New York Mellon, as trustee
(incorporated by reference to Exhibit 4.1 to Schlumberger’s Current Report on Form 8-K filed on
September 18, 2020)
First Supplemental Indenture dated as of September 18, 2020, by and among Schlumberger Finance
Canada Ltd., as issuer, Schlumberger Limited, as guarantor, and The Bank of New York Mellon, as
trustee (including form of global notes representing 1.400% Senior Notes due 2025) (incorporated by
reference to Exhibit 4.2 to Schlumberger’s Current Report on Form 8-K filed on September 18, 2020)
Indenture dated as of December 21, 2015, by and between Schlumberger Holdings Corporation, as
issuer, and The Bank of New York Mellon, as trustee (*)
First Supplemental Indenture dated as of December 21, 2015, by and between Schlumberger Holdings
Corporation, as issuer, and The Bank of New York Mellon, as trustee ( including forms of global notes
representing 3.625% Senior Notes due 2022 and 4.000% Senior Notes due 2025) (*)
Second Supplemental Indenture dated as of February 4, 2019, by and between Schlumberger Holdings
Corporation, as issuer, and The Bank of New York Mellon, as trustee (including forms of global notes
representing 3.750% Senior Notes due 2024 and 4.300% Senior Notes due 2029) (*)
Third Supplemental Indenture dated as of April 11, 2019, by and between Schlumberger Holdings
Corporation, as issuer, and The Bank of New York Mellon, as trustee (including form of global notes
representing 3.750% Senior Notes due 2028) (*)
Exhibit
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
Schlumberger Limited Supplementary Benefit Plan, as established effective June 1, 1995 and
conformed to include amendments through January 1, 2019 (incorporated by reference to Exhibit 10.1
to Schlumberger’s Annual Report on Form 10-K for the year ended December 31, 2018) (+)
Schlumberger Limited Restoration Savings Plan, as established effective June 1, 1995 and conformed
to include amendments through January 1, 2019 (incorporated by reference to Exhibit 10.2 to
Schlumberger’s Annual Report on Form 10-K for the year ended December 31, 2018) (+)
Schlumberger Technology Corporation Supplementary Benefit Plan, as established effective
January 1, 1995 and conformed to include amendments through January 1, 2019 (incorporated by
reference to Exhibit 10.3 to Schlumberger’s Annual Report on Form 10-K for the year ended
December 31, 2018) (+)
Schlumberger Limited 2004 Stock and Deferral Plan for Non-Employee Directors, as amended and
restated effective January 17, 2019 (incorporated by reference to Exhibit 10.1 to Schlumberger’s
Current Report on Form 8-K filed on April 3, 2019) (+)
Schlumberger 2005 Stock Incentive Plan, as amended and restated as of July 19, 2017 (incorporated
by reference to Exhibit 10.6 to Schlumberger’s Annual Report on Form 10-K for the year ended
December 31, 2018) (+)
Schlumberger 2008 Stock Incentive Plan, as amended and restated as of July 19, 2017 (incorporated
by reference to Exhibit 10.7 to Schlumberger’s Annual Report on Form 10-K for the year ended
December 31, 2018) (+)
Schlumberger 2010 Omnibus Stock Incentive Plan, as amended and restated as of July 19, 2017
(incorporated by reference to Exhibit 10.8 to Schlumberger’s Annual Report on Form 10-K for the
year ended December 31, 2018) (+)
Cameron International Corporation Equity Incentive Plan, as amended and restated as of January 1,
2013 (incorporated by reference to Exhibit 10.16 to Schlumberger’s Annual Report on Form 10-K for
the year ended December 31, 2016) (+)
2018 Rules of the Schlumberger 2010, 2013 and 2017 Omnibus Incentive Plans for Employees in
France (incorporated by reference to Appendix B to Schlumberger’s Definitive Proxy Statement on
Schedule 14A filed with the SEC on March 2, 2018) (+)
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) (+)
Schlumberger 2013 Omnibus Stock Incentive Plan, as amended and restated as of July 19, 2017
(incorporated by reference to Exhibit 10.15 to Schlumberger’s Annual Report on Form 10-K for the
year ended December 31, 2018) (+)
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 June 30, 2015) (+)
Exhibit
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
94
95
Form of Restricted Stock Unit Award Agreement under Schlumberger 2013 Omnibus Stock Incentive
Plan (three-year vesting) (incorporated by reference to Exhibit 10.2 to Schlumberger’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2015) (+)
Exhibit
10.14
Form of Restricted Stock Unit Award Agreement under Schlumberger 2013 Omnibus Stock Incentive
Plan (ratable vesting) (*)(+)
Schlumberger Discounted Stock Purchase Plan, as amended and restated effective as of January 19,
2017 (incorporated by reference to Appendix C to Schlumberger’s Definitive Proxy Statement on
Schedule 14A filed on February 21, 2017) (+)
Schlumberger 2017 Omnibus Stock Incentive Plan, as amended and restated as of July 19, 2017
(incorporated by reference to Exhibit 10.20 to Schlumberger’s Annual Report on Form 10-K for the
year ended December 31, 2018) (+)
Form of Incentive Stock Option Agreement under 2017 Schlumberger 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, 2017) (+)
Form of Restricted Stock Unit Award Agreement under Schlumberger 2017 Omnibus Stock Incentive
Plan (incorporated by reference to Exhibit 10.4 to Schlumberger’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2017) (+)
Form of Non-Qualified Stock Option Agreement under Schlumberger 2017 Omnibus Stock Incentive
Plan (incorporated by reference to Exhibit 10.5 to Schlumberger’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2017) (+)
Form of 2017 Two-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, 2017) (+)
Form of 2017 Three-Year Performance Share Unit Award Agreement 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 March 31, 2017) (+)
Addendum to Restricted Stock Unit Award Agreements, Performance Share Unit Agreements,
Incentive Stock Option Agreements, and Non-Qualified Stock Option Agreements Issued Prior to
July 19, 2017 (incorporated by reference to Exhibit 10.27 to Schlumberger’s Annual Report on Form
10-K for the year ended December 31, 2018) (+)
Form of 2019 Two-Year Performance Share Unit Award Agreement (with relative TSR modifier)
under Schlumberger 2017 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, 2019) (+)
Form of 2019 Three-Year Performance Share Unit Award Agreement (with relative TSR modifier)
under Schlumberger 2017 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to
Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019) (+)
Form of 2020 Two-Year Performance Share Unit Award Agreement (with relative TSR modifier)
under Schlumberger 2017 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to
Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020) (+)
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
10.26
Form of 2020 Three-Year Performance Share Unit Award Agreement (with relative TSR modifier)
under Schlumberger 2017 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, 2020) (+)
Employment, Non-Competition and Non-Solicitation Agreement effective as of August 1, 2019, by
and between Schlumberger Limited and Paal Kibsgaard (incorporated by reference to Exhibit 10.1 to
Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019) (+)
Employment, Non-Competition and Non-Solicitation Agreement effective as of January 22, 2020, by
and between Schlumberger Limited and Simon Ayat (incorporated by reference to Exhibit 10.30 to
Schlumberger’s Annual Report on Form 10-K for the year ended December 31, 2019) (+)
Employment, Non-Competition and Non-Solicitation Agreement effective as of September 1, 2020,
by and between Schlumberger Limited and Patrick Schorn (incorporated by reference to Exhibit 10.3
to Schlumberger’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020) (+)
Exhibit
10.27
10.28
10.29
10.30
Form of Indemnification Agreement (incorporated by reference to Exhibit 10 to Schlumberger’s
Current Report on Form 8-K filed on October 21, 2013)
10.31
Significant Subsidiaries (*)
Issuers of Registered Guaranteed Debt Securities (*)
Consent of Independent Registered Public Accounting Firm (*)
Powers of Attorney (*)
21
22
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 (*)
Inline XBRL Instance Document (*)
Inline XBRL Taxonomy Extension Schema Document (*)
Inline XBRL Taxonomy Extension Calculation Linkbase Document (*)
Inline XBRL Taxonomy Extension Definition Linkbase Document (*)
Inline XBRL Taxonomy Extension Label Linkbase Document (*)
32.1
32.2
95
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
96
97
Inline XBRL Taxonomy Extension Presentation Linkbase Document (*)
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
Exhibit
101.PRE
104
(*) Filed with this Form 10-K.
(**) Furnished with this Form 10-K
(+) Management contracts or compensatory plans or arrangements.
The Exhibits filed herewith do not include certain instruments with respect to long-term debt of Schlumberger
Limited and its subsidiaries, inasmuch as the total amount of debt authorized under any such instrument does not
exceed 10 percent of the total assets of Schlumberger Limited and its subsidiaries on a consolidated basis.
Schlumberger agrees, pursuant to Item 601(b)(4)(iii) of Regulation S-K, that it will furnish a copy of any such
instrument to the SEC upon request.
Item 16. Form 10-K Summary.
None.
98
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, 2021
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
*
Olivier Le Peuch
/s/ STEPHANE BIGUET
Stephane Biguet
/s/ HOWARD GUILD
Howard Guild
*
Patrick de La Chevardière
*
Miguel M. Galuccio
*
Tatiana A. Mitrova
*
Maria Moræus Hanssen
*
Lubna S. Olayan
*
Mark G. Papa
*
Leo Rafael Reif
*
Henri Seydoux
Title
Chief Executive Officer and Director
(Principal Executive Officer)
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Chief Accounting Officer
(Principal Accounting Officer)
Director
Director
Director
Director
Director
Chairman of the Board
Director
Director
99
Name
*
Jeff W. Sheets
Director
Title
/s/ DIANNE B. RALSTON
January 27, 2021
*By Dianne B. Ralston, Attorney-in-Fact
Significant Subsidiaries
Listed below are the significant subsidiaries of the Registrant as of December 31, 2020, 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, 2020.
Exhibit 21
Schlumberger B.V., Netherlands
Schlumberger Canada Limited, Canada
Schlumberger Holdings Corporation, Delaware
Cameron International Corporation, Delaware
Cameron Lux Global Finance S.à r.l., Luxembourg
Schlumberger Technology Corporation, Texas
Smith International Inc., Delaware
Schlumberger Norge AS, Norway
Schlumberger SA, France
Services Petroliers Schlumberger, France
Schlumberger UK Limited, UK
Schlumberger Plc, UK
Schlumberger Oilfield UK Plc, UK
Schlumberger Oilfield Holdings Limited, BVI
Schlumberger Holdings II Limited, BVI
Dowell Schlumberger Corporation, BVI
Schlumberger Logelco, Inc., Panama
Schlumberger Middle East SA., Panama
Schlumberger Offshore Services Limited, BVI
Schlumberger Oilfield Eastern Ltd., BVI
Schlumberger Overseas, SA, Panama
Schlumberger Seaco, Inc., Panama
100
Issuers of Registered Guaranteed Debt Securities
Consent of Independent Registered Public Accounting Firm
Exhibit 22
Exhibit 23
Schlumberger Investment SA, a société anonyme incorporated under the laws of the Grand Duchy of
Luxembourg (“SISA”), and Schlumberger Finance Canada Ltd., a corporation incorporated under the laws of the
Province of Alberta, Canada (“SFCL”), are both indirect wholly-owned subsidiaries of Schlumberger Limited
(the “Guarantor”).
As of December 31, 2020, (i) SISA was the issuer of its 3.650% Senior Notes due 2023 and 2.650% Senior Notes
due 2030 (together, the “SISA Notes”), and (ii) SFCL was the issuer of its 1.400% Senior Notes due 2025 (the
“SFCL Notes”). The Guarantor fully and unconditionally guarantees the SISA Notes and the SFCL Notes on a
senior unsecured basis.
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos.
333-104225; 333-115277; 333-124534; 333-151920; 333-173055, as amended by post-effective amendment on
Form S-8; 333-188589; 333-188590; 333-218181; 333-218182; and 333-231025); on Form S-3 (Nos.
333-231029; 333-248675; and 333-249669); on Form S-4 (No. 333-97899); and on Form S-4 as amended by
post-effective amendment on Form S-8 (Nos. 333-207260 and 333-166326) of Schlumberger Limited of our
report dated January 27, 2021 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
Houston, Texas
January 27, 2021
Powers of Attorney
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Exhibit 24
Exhibit 31.1
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 company, hereby appoints 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, 2020, and any amendment or amendments to
any such Annual Report on Form 10-K, and any agreements, consents or waivers related 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/ Patrick de La Chevardière
Patrick de La Chevardière Director
/s/ Lubna S. Olayan
Lubna S. Olayan Director
/s/ Miguel M. Galuccio
Miguel M. Galuccio
Director
/s/ Mark G. Papa
Mark G. Papa
Chairman of the Board
/s/ Olivier Le Peuch
Olivier Le Peuch
Chief Executive Officer and Director
/s/ Tatiana A. Mitrova
Tatiana A. Mitrova
Director
/s/ Maria Moræus Hanssen
Maria Moræus Hanssen
Director
Date: January 21, 2021
/s/ Leo Rafael Reif
Leo Rafael Reif
Director
/s/ Henri Seydoux
Henri Seydoux
Director
/s/ Jeff W. Sheets
Jeff W. Sheets
Director
I, Olivier Le Peuch, certify that:
1. I have reviewed this Annual Report on Form 10-K of Schlumberger N.V. (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, 2021
/s/ Olivier Le Peuch
Olivier Le Peuch
Chief Executive Officer
Exhibit 31.2
Exhibit 32.1
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
In connection with the Annual Report on Form 10-K of Schlumberger N.V. (Schlumberger Limited) (the
“Company”) for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the
date hereof (the “Report”), I, Olivier Le Peuch, 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, 2021
/s/ Olivier Le Peuch
Olivier Le Peuch
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.
I, Stephane Biguet, certify that:
CERTIFICATION OF CHIEF FINANCIAL OFFICER
1. I have reviewed this Annual Report on Form 10-K of Schlumberger N.V. (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, 2021
/s/ Stephane Biguet
Stephane Biguet
Executive Vice President and Chief Financial Officer
Exhibit 32.2
Exhibit 95
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
In connection with the Annual Report on Form 10-K of Schlumberger N.V. (Schlumberger Limited) (the
“Company”) for the year ended December 31, 2020 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, 2021
/s/ Stephane Biguet
Stephane Biguet
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
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 indirect subsidiaries of Schlumberger. The disclosure is with
respect to the full year ended December 31, 2020. Due to timing and other factors, the data may not agree with
the mine data retrieval system maintained by the MSHA at www.MSHA.gov.
Full Year 2020
(whole dollars)
Section
104 S&S
Citations
Section
104(b)
Orders
Section
104(d)
Citations
and
Orders
Section
110(b)(2)
Violations
Section
107(a)
Orders
Total Dollar
Value of
MSHA
Assessments
Proposed (1)
Mining
Related
Fatalities
Received
Notice
of
Potential
to
Have
Pattern
Under
Section
104(e)
(yes/no)
Received
Notice of
Pattern of
Violations
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
-
-
-
4
4
-
-
-
-
1
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$492
-
-
$2,580
$2,952
-
-
$123
-
$5,462
$9,131
-
-
-
-
-
-
-
-
-
-
-
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Mine or Operating
Name/MSHA Identification
Number
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
Mountain Springs Beneficiation Plant/
2601390
Wisconsin Proppants Hixton Mine/
4703742
Wisconsin Proppants Alma Mine/
4703823
Wisconsin Proppants Monahans Mine/
4105336
Wisconsin Proppants High Roller Sand
Mine/4105321
(1) Amounts included are the total dollar value of proposed assessments received from MSHA on or before
December 31, 2020, regardless of whether the assessment has been challenged or appealed, for citations and
orders occurring during the full year 2020. 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 vary depending on the size and type of the
operation.
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Board of Directors
Corporate Officers
Corporate Information
Patrick de La Chevardière 1, 3
Former Chief Financial Officer
Total S.A.
London, United Kingdom
Miguel M. Galuccio 3, 5
Chairman and
Chief Executive Officer
Vista Oil & Gas
Mexico City, Mexico
Olivier Le Peuch
Chief Executive Officer
Schlumberger
Tatiana A. Mitrova 1, 3
Director of the Energy Centre
Moscow School of Management
SKOLKOVO
Moscow, Russia
Lubna S. Olayan 3, 4
Deputy Chairperson and
Former Chief Executive Officer
Olayan Financing Company
Riyadh, Saudi Arabia
Maria Moræus Hanssen 2, 4
Former Deputy Chief Executive
Officer & COO
Wintershall Dea GmbH
Oslo, Norway
Mark G. Papa 2, 5
Former Chairman and
Chief Executive Officer
Centennial Resource Development, Inc.
Houston, Texas
Leo Rafael Reif 2, 4, 5
President
Massachusetts Institute of Technology
Cambridge, Massachusetts
Henri Seydoux 2, 4, 5
Chairman and Chief Executive Officer
Parrot S.A.
Paris, France
Jeffrey W. Sheets 1, 2
Former Chief Financial Officer
ConocoPhillips
Houston, Texas
Olivier Le Peuch
Chief Executive Officer
Stéphane Biguet
Executive Vice President and
Chief Financial Officer
Khaled Al Mogharbel
Executive Vice President,
Geographies
Ashok Belani
Executive Vice President,
Schlumberger New Energy
Hinda Gharbi
Executive Vice President,
Services and Equipment
Abdellah Merad
Executive Vice President,
Performance Management
Pierre Chéréque
Vice President and Director of Taxes
Kevin Fyfe
Vice President and Controller
Howard Guild
Chief Accounting Officer
Claudia Jaramillo
Vice President and Treasurer
Alexander C. Juden
Secretary
Vijay Kasibhatla
Director, Mergers and Acquisitions
Saul R. Laureles
Director, Corporate Legal Affairs,
and Assistant Secretary
Demosthenis Pafitis
Chief Technology Officer
Dianne Ralston
Chief Legal Officer
Gavin Rennick
Vice President, Human Resources
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 eliminate
duplicate mailings, contact
Computershare Trust Company,
N.A., Stock Transfer Agent and
Registrar.
Working with Communities
Schlumberger supports and
encourages a range of social
investment programs—many of
which are supported by employee
volunteers—in line with our
commitment to contributing to the
UN Sustainable Development Goals.
Among these is our global focus on
science, technology, engineering,
and mathematics (STEM) education
and community health and safety.
To learn more about these programs,
please see the latest edition of the
Schlumberger Global Stewardship
Report at slb.com/globalstewardship/
index.html.
Internet
For information on Schlumberger
technology, services, and solutions,
visit slb.com. For information on
career and job opportunities at
Schlumberger, visit careers.slb.com.
* Mark of Schlumberger or Schlumberger
companies.
Other company, product, and service names
are the properties of their respective owners.
Stockholder Information
Schlumberger’s common stock
is listed on the New York Stock
Exchange, trading symbol “SLB,”
and on the Euronext Paris.
For quarterly earnings dividend
announcements and other
informa tion, please call
+1 (713) 375-3535 or email
investor-relations@slb.com.
You may also visit
investorcenter.slb.com.
Stock Transfer Agent
and Registrar
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233
+1 (877) 745-9341
+1 (781) 575-2707
For Overnight Delivery
Computershare Trust Company, N.A.
462 South 4th Street, Suite 1600
Louisville, KY 40202
+1 (877) 745-9341
+1 (781) 575-2707
General stockholder
information is available on
the Computershare website
at computershare.com.
E-mail Alerts
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Form 10-K
The Schlumberger 2020 annual
report on Form 10-K filed with
the Securities and Exchange
Commission is available
without charge. To obtain a
copy, please call +1 (713) 375-3535,
or email investor-relations@slb.com.
You may also visit
investorcenter.slb.com.
1 Member, Audit Committee
2 Member, Compensation Committee
3 Member, Finance Committee
4 Member, Nominating and Governance Committee
5 Member, Science and Technology Committee
45507schD1R3.indd 2
2/20/21 2:15 PM
Schlumberger Limited
42 rue Saint-Dominique
75007 Paris
France
5599 San Felipe
Houston, Texas 77056
United States
62 Buckingham Gate
London SW1E 6AJ
United Kingdom
Parkstraat 83
2514 JG The Hague
The Netherlands
slb.com
45507schD1R2.indd 1
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