Schlumberger Ltd. (SLB), the biggest oilfield services provider, is withdrawing employees who are citizens of the U.S. and the European Union from Russia amid sanctions, two people with knowledge of the matter said.
About 20 mid-level and senior managers will be pulled, one of the people said. Both asked not to be identified because they aren’t authorized to discuss the matter.
The U.S. and the EU targeted Russia’s oil industry by banning exports of some equipment and technology after Russia annexed Crimea and allegedly stoked a separatist insurgency in eastern Ukraine. The sanctions have forced Exxon Mobil Corp. to suspend some projects with Russia’s OAO Rosneft, threatening a project where the state-run company announced a billion-barrel crude discovery in the Kara Sea last week.
Exploration and production companies were expected to spend $51.7 billion in Russia this year, according to estimates from Barclays Plc. A large part of the spending goes to service and equipment companies such as Schlumberger and Halliburton Co.
“Schlumberger continues to closely monitor the U.S. and EU sanctions and restrictions, and continues to take all steps necessary to ensure compliance with applicable laws,” Alexander Borisov, a Moscow-based Schlumberger spokesman, said by e-mail, without elaborating.
Schlumberger gets 5 percent to 7 percent of its global sales from Russia, according to an August report by RBC Capital Markets.
‘Colossal Funds’
Russia relies on hydraulic fracturing, or fracking, for 25 percent of its oil production and replacing technology developed by companies like Schlumberger would require “colossal funds,” Vagit Alekperov, chief executive officer of OAO Lukoil, Russia’s second-biggest oil producer, said last week in Sochi, Russia.
“The biggest engineering companies, like Schlumberger, Halliburton and others, have technology they spent billions of dollars developing,” Alekperov said.
The U.S. and EU announced the latest wave of sanctions this month, targeting the banking, energy and defense industries. They forbid providing services such as drilling, well-testing or logging for Russian deep-water, Arctic and shale oil exploration and production.
Schlumberger, based in Houston and Paris, is the biggest provider of the so-called wireline services globally in an estimated $20 billion-a-year market, according to Andrew Cosgrove, an energy analyst at Bloomberg Intelligence.
