Patrick Schorn Executive Vice President, Wells 2018 Cowen 8th Annual Energy & Natural Resources Conference New York, December 4, 2018
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Oil Price Slide Increases Uncertainty and Decreases Visibility WTI Forward Curve ($/bbl) Upstream Capex ($B) World Liquids Demand (MMbbl/d) Oil Production (MMbbl/d) $ -39% 1.3% 1.4% +7% 66 62 current 1 week ago 1 month ago 698 427 +12% 477 97.9 99.2 100.6 94.2 100.7 US LTO US Other Russia NAM OPEC ex. Saudi Arabia 58 Russia Middle East Saudi Arabia 54 $4 Rest of World Rest of World 50 1 2 3 4 Years 5 6 2014 2018E 2019E 2017 2018E 2019E Oct-14 Oct-18 3 Sources: Data Stream, Energy Aspects, IEA, EIA, Bloomberg, IHS Markit, SLB analysis
Production Growth Driven by US Land and OPEC Middle East Change in Oil Production vs. January 2014 (MMbbl/d) US L48 Onshore Saudi, UAE, Iraq, Kuwait 500 OECD Crude and Product Stocks vs. 2010-2014 avg. (MMbbl) 2 400 Rest of World Russia 300 0 200 100-2 2014 2015 2016 2017 2018 0 2014 2015 2016 2018 4 Sources: IEA, EIA, SLB analysis
Market Changes Offer Different Opportunities for Growth North America shale oil production reacts quickly to investment Middle East OPEC offers a Strong platform for growth Rest-of-World production is highly dependent on technology 5
Integrated Drilling Track Record First LSTK in Latin America 20 years ago 14,000 wells over 25 years 500 projects managing 1000+ rigs 25 NOC, 6 IOC, and 270 Independents 80% land, 20% offshore Well-defined risk mitigation process 6
Advantages of the Integrated Drilling Approach IDS captures the value generated by operational efficiency and reliability two main transformation initiatives The choice of technology used to deliver increased performance lies with Schlumberger Crew sizing and operational manning support multiple operations with consistent service technical oversight 7
Mobilization Update on Saudi Aramco LSTK Project LSTK Rig Count LSTK Well Count 180 30 Forecast Forecast 150 120 20 90 10 60 30 0 1Q18 2Q18 3Q18 4Q18E 1 2019P 1Q18 2Q18 3Q18 4Q18E 1 2019P 0 344 wells (AFK and Ghawar), 100 wells (Khurais 2 ) over 3 years 25 rigs active, mobilization complete Planned well count to double in 2019 Over 70% of rigs operated by ADC 3 8 Source: SLB analysis Note: 1 November 2018 estimate, 2 Khurais Oil 2017 contract award, 3 Arabian Drilling Company is a joint venture between Schlumberger and TAQA
Fourth-Quarter Sequential Outlook North America revenue from offshore and land drilling trending flat sequentially, however significantly larger drop in hydraulic fracturing activity and pricing, than previously expected International revenue, excluding Cameron, is more or less in line with expectations, except signs of weakness in a few countries in Latin America Cameron slightly down due to the temporary slowdown in North America land activity Year-end sales further reduced