US oilfield giant expands in Russia.

By Rhod Mackenzie

The American oilfield servicing giant SLB (formerly Schlumberger) is pursuing expansion in Russia this is despite the withdrawal of major competitors following the onset of the Ukraine conflict in 2022, this is according to a Financial Times report citing customs filings and employment listings.

SLB is an oil servicing company that specialises in the manufacture, repair and maintenance of equipment used in the extraction and transportation of crude oil and gas.

The Financial Times reported on  that SLB has continued to provide equipment in Russia, as well as register new trademarks, sign new contracts and seek new employees.
While Russian oil exports are subject to Ukraine-related sanctions, policymakers in the United States and the European Union have not imposed comprehensive restrictions on oilfield services in Russia. This is due to concerns that such measures would stifle the global fossil fuel supply and drive up oil prices, according to the outlet.

The Financial Times has reported that between August and December 2023, SLB imported $17.5 million worth of equipment into Russia, citing Russian customs filings.
The deliveries were made despite the company having made a pledge in July of the same year to halt shipments of products and technology to the country.
The oilfield services giant imported products from countries including China and India. The good dsupplied include cabling and chemicals, which could be subject to controls if exported from the EU as all goods that are considered 'dual use' as in could have a military purpose as well as a civilian one are banned.Of course this pretty much covers every thing from nuts and bolts,screw drivers,spark plugs to computer chips and moblle phones .
Since December, the oilfield services major has posted more than 1,000 job advertisements for positions ranging from drivers to chemists and geologists.However given the low level of unemployment in Russia which is currently 2.4% they like all companies are going to have difficulty finding staff
In 2023, Russian operations generated 5% of SLB's $33.1 billion in revenues.so the around $1.7 billion in revenues generated by the Russia subsidiary is not exactly loose change.
The company's profits in Russia increased fourfold in 2023 to over $600 million compared to 2022, according to an April report by the business daily Vedomosti. The report cited an analysis of SLB's financial results which showed that the company was benefiting from the governements push for more efficiency in the oil and gas sector..
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Schlumberger's main rivals, such as Texas-based Halliburton and Houston-based Baker Hughes, ceased operations in Russia in 2022, following a significant exodus of Western firms from the country. SLB company stated that it had ceased new investment and technology deployment in Russia. However, the company stated that it was continuing with its existing activities in compliance with international laws and sanctions.On the technology front there are a number of new technologies that have been developed in Russia under the import substitution that are superior to the west and I have no doubt that SLB is adapting and using locally produced technologies and equipement.For example Russia has new technologies in the field of hydraulic frackturing or fracking that are superior to those developed in the USA

In a March interview with the Financial Times, SLB CEO Olivier Le Peche stated that the company does not intend to leave Russia despite Western pressure as It has long term commitments to its employees and its customers.
Following the US and EU embargoes on Russian oil, Moscow started exporting fuel to countries in Asia and Africa; China and India have become its top customers.It also has become a major exporter of petrol and diesel to Brazil.
So despite all the rehetoric by politicians and column inches by the media the Russia oil and gas sector not only continues but continues to thrive,grow and prosper.
Now the attitude of SLB is different from the politicians in Washington which has said will continue to impose sanctions against the Russian energy sector and related infrastructure, according to a statement released by US Deputy Energy Secretary Geoffrey Pyatt.
“We will continue to tighten the screws and continue to impose sanctions on a wide range of companies involved in the development of key energy projects, as well as future energy projects and related infrastructure,” Pyatt said at an energy security conference at the Center for Strategic Initiatives and International Studies (CSIS) in Washington.
He further stated that sanctions will apply to enterprises involved in the procurement of materials and advanced technologies for future energy projects in Russia.
However Pyatt who was the US ambassador to Ukraine was Victoria Feck The EU Nuland's point person in the US CIA led Maidan Coup that overthrew the elected President of Ukraine and this statement like all his policieshe has got them wrong .

Russia's Rosstat has confirmed that for the second year in a row, oil production in Russia is at a record level and that is despite the cuts that it has had to make as part of the OPEC Plus agreements, which indicates the resilience of its economy to Western sanctions. At the same time, Russian oil exports are also recovering, both in quantity and in price terms.
In the opinion of Ronald Smith, an oil and gas analyst at Moscow-based BCS Global Markets, who believes that “Russia is much more independent in its oilfield services than is commonly believed.”In  2023, Russia drilled oil wells with a total depth of 28,100 kilometers, which is close to last year's record, which was set by Russian oil producers for the entire period after the collapse of the Soviet Union.

Overall, production drilling in Russia exceed 30,000 kilometers in 2023, analysts from Kpler and the Moscow consulting company Yakov & Partners predict. And this is happening despite Western sanctions, which include both technology exports and price caps. In particular, in 2022, it introduced "comprehensive restrictions on the export of equipment, technologies and services for the energy industry in Russia", and following this, the United States last year imposed sanctions against dozens of companies producing drilling equipment and developing new production technologies in order to "limit Russia's future production capabilities." 

Two of the world’s largest oilfield services companies, Halliburton Co. and Baker Hughes Co., have sold their operations in Russia and exited the country. Weatherford International Plc like SLB , said they would continue to operate in the country in compliance with sanctions. But as Victor Katona, a leading crude oil analyst at Kpler, points out, the shares of these companies (or rather, the Russian subsidiaries of international companies) were mostly sold to management, while they retained all the know-how they had accumulated over the years.

So it does not look like much is changing and yet again the US sanctions acheive very little except column inches in the Western press.