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SLB (NYSE:SLB) has no plans to leave Russia two years after invading Ukraine, CEO Olivier Le Peuch said Financial Times on Monday, despite Western pressure to curb the flow of oil funds to Vladimir Putin’s war machine.
THE the world’s largest oilfield services company – formerly called Schlumberger – has not decided whether or not to follow its largest oilfield services rival Baker Hughes (BKR) and Halliburton (HAL) by selling its Russian operations and is honoring customer contracts, the CEO said.
“The team over there [in Russia] it operates autonomously and I think to some extent it’s behind the scenes. We protect our assets, this is our priority,” Le Peuch said FT in an interview.
Since the fall of the Soviet Union, SLB (SLB) has built a significant business in Russia, which last year generated about 5% of the company’s revenue of $33.1 billion and employed about 9,000 people.
SLB (SLB) halted new investment and technology deployment in Russia in March 2022 and halted product shipments to the country in July 2023 following an escalation of sanctions, but unlike its rivals, it still maintains a presence in the village.
“Russia’s oil industry would collapse without foreign oil services companies,” said Lela Stanley, senior investigator at Global Witness FT.
Western governments have been cautious about tightening sanctions on Russia’s oil and gas industry for fear they could lead to a surge in commodity prices that would destabilize the world economy, but some experts say this fear is overblown .
“Russia has the means to maintain production without these technologies; it will just be more expensive,” according to former Bank of America Vice President Craig Kennedy, now at Harvard. “And the more they have to spend on making barrels, the less there is left for bombs.”