Financial Times: Pressure mounts on US oil services group SLB to exit Russia operations, 14 January 2025

Oilfield services company SLB is facing growing pressure from US lawmakers to pull out of Russia following the imposition of sweeping new sanctions against the nation’s energy sector by the Biden administration.

Two US congressmen told the Financial Times the company, better known as Schlumberger, should get out of Russia or risk breaching US sanctions.

Lloyd Doggett and Jake Auchincloss issued the warning following an order published by the Biden administration on Friday, prohibiting the provision of US petroleum services to persons located in Russia from February 27...

A Financial Times investigation last year found that SLB had signed new contracts, advertised for more than 1,000 jobs and imported equipment into Russia since its competitors had exited the country.

SLB did not reply to a request for comment on the new restrictions. On its website, it said it takes responsibility for export controls and sanctions compliance seriously. “We have committed significant resources across the company to ensure we meet or exceed the various international laws,” SLB said.

The Treasury determination did not specifically name Houston-based SLB or its Russian-based subsidiary. But both congressmen and legal experts said the order increased the risk of legal problems facing SLB if it maintained its presence in Russia...

When asked if SLB and any other US-based oilfields services companies would have to exit Russia to comply with the order, a Treasury spokeswoman said: “The prohibition on petroleum services prohibits all US persons, wherever located, from providing petroleum services, directly or indirectly, to any person located in the Russian Federation”... 

Craig Kennedy, a Russia analyst affiliated with Harvard’s Davis Center, said the new Treasury sanctions appeared aimed at SLB and they would skirt it at their peril. If SLB was forced to pull out of Russia it would “rattle the Kremlin” due to the increased cost it would impose on the country’s oil sector, he said.

“Russia has relied heavily on state of the art western reservoir modelling technology to design efficient, low-cost development plans. It’s something they’ve struggled to replicate, and won’t find elsewhere. Now, for the first time in 30 years, they’ll be on their own,” said Kennedy.

SLB has run foul of US sanctions before. In 2015, the company pleaded guilty to a federal charge and paid $232.7mn for facilitating trade with Iran and Sudan.