Schlumberger Says Russia-Ukraine Conflict Will Weigh on Q1 Results

Tuesday, March 8, 2022

Schlumberger's current-quarter results are likely to be impacted by the ongoing Russia-Ukraine conflict, its chief executive officer said on Tuesday, as Moscow accounts for about 5% of the oilfield services company's global revenue.

Crude prices have surged since the beginning of March on worries over the invasion of Ukraine and as the United States and other countries brought in more sanctions designed to cripple the Russian economy. That has upended the energy markets, as Russia is the largest exporter of crude and fuel products combined in the world.

Schlumberger said the impact on the first quarter will largely be limited to the effects of the depreciation of the rouble, which lost around a third of its value last week, following the sanctions.

"(The) recent events will exacerbate an already tightly supplied oil and gas market. This will likely require increased global investment across geographies to ensure the security of the world's energy supply," said Chief Executive Officer Olivier Le Peuch.

The company expects its first-quarter global revenue growth to be in the low-to-mid-teens, Le Peuch said. Schlumberger reported international revenue of $4.21 billion last year

Schlumberger said persistent global supply and logistics constraints are resulting in lower-than-expected product deliveries, which will have an impact on the current quarter.

It's pretax segment operating margin in the quarter is expected to expand by about 150 to 200 basis points year-on-year, while its adjusted EBITDA margin is expected to increase about 50 to 100 basis points year-on-year.

(Reuters - Reporting by Rithika Krishna in Bengaluru; Editing by Amy Caren Daniel)

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