SLB - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Schlumberger Earnings Conference Call. At this time all participants are in a listen-only mode. Later there will be an opportunity for your questions and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to the Vice President of Investor Relations, ND Maduemezia. ahead. go Please

ND Maduemezia

meeting Good second Lea. is welcome the Limited to hosted week. Thank XXXX morning, earnings Limited Board Schlumberger the quarter Paris, call earlier conference Schlumberger this from you, following and held call. being Today's

are the Officer. Officer; Financial Le Peuch, Joining and call Chief Biguet, Stephane us Olivier on Chief Executive

cause forward-looking. of we our will could be Before we to results like uncertainties statements would our involve remind all and today you filings. filing materially the projected are These our differ begin, I participants matters risks and that I latest XX-K SEC from some these in to making to therefore that other those refer statements.

non-GAAP today also include measures. comments may financial Our

measures which found press turn Additional second quarter on can is the our Olivier. details that, reconciliation GAAP be call the and in I release, to website. most our With directly to will over financial comparable

Olivier Le Peuch

ladies us I In Thank and near-term ND, gentlemen. third you and and industry you three macro cover remainder will prepared joining for quarter my for the the our environment of topics; good results, Thank quarter the outlook second year. the call. the remarks morning, the on and today,

my outperformance will on Stephane questions. perspective Schlumberger I for results, how and sustained financial our share Finally, then give positioned the open in for floor is context. macro details this on will more we will

leverage revenue capitalize fourth execution short broad in The very vastly the operating demonstrate consecutive expansion. quality, of we our fully of both and divisions, core to our in operating recovery and margin geographies, and results North strength quarter quarter second Our solid internationally. improved long on environments cycle across combination delivered as continue America and activity portfolio

the activity America, during margins in take the a some of depth margin double-digit the North the in Let we margins recovery and performance expansion, levels, markets. Growth during targets. key ambition, Internationally, and our in double-digit to North our restoring grew does the rate offshore by participation, only enhanced more this This basins. sheet deleveraging market $X.X count Performance basis cash finally, balance In reflect division in growth U.S. of recovery financial ahead led Performance to quarter. rate strong resulted these in both all recovery, growth sequential Reservoir technology the North share milestone anticipated count internationally, points. driven the me activity second both XXX including hold sequentially, acceleration were post portfolio in and achieved XXXX which adoption, margin enabled higher from double posting pre-pandemic Construction, contribution to fully expansion which us the our was than from growth Production flow rig reached Reservoir and outpacing revenue of you America quarter. over excess and Systems, growth Construction the operation us begin quarter. with seasonal In Well of of Well quarter. accelerated sequential America. to top leveraged margin and diversity and line growth, the also quarter, All internationally divisions but and expansion highlights with significant rig margin billion, sequential enabling the new by growth improving its the land, And XX%, exploration offshore was not quality. in of

two factors In contributing impact operating to financial there addition the this were to leverage, of outperformance.

Reservoir Construction. across Middle higher Europe and activity market Well quarter Performance deep adoption. and quality single-digit mid-teens also presented by technology favorable The second, growth the and East. in was the a This high revenue water rebound in and mix, condition in activity mix both and appraisal offshore second included activity Brazil, growth, partly led exploration resulted offshore a for in the First, and

line, business deep a significant future exceeding as quarter volume commit X.X. our customers doubling book-to-bill prior resulting year-to-date the in of offshore water and a development activity, received addition, we awards ratio to versus OneSubsea In booking for the

new This technology and one-third basins. it this cycle. is our most included, benefited fit-for-basin Transition rate Technologies, which by us of towards expansion is in clear factor recognition particular, in of and confidence performance adoption quarter increased technology a our for the contributing technology other uptake. customers, digital adoption The of The increasing of and margin generation generate the our up all solutions, technologies during contribution and latest impact divisions increased gives in the

New agreements forge continue the digital of customers digital our and to platform their strategies, number continue in Panasonic transformations. Energy announced our Energy, our our advance reach process strategic production and North America key recently Valley, lithium the battery-grade New In develop including we ventures, we ahead extending as to Clayton with of with And addition, awards, to new all a in Nevada. of progress digital with collaboration

service announced quarter, achieve XXXX. commitment lead first Scope Finally, emissions we our to includes I'm company ambition that set during has X to that the second net-zero the net-zero very proud emissions. greenhouse by

out laid that to aligned achieve an target is to X.X goal interim and with our Agreement the a Celsius in with Paris is road have We built science-based, XXXX map climate milestones of and approach on XXXX. degrees change the comprehensive near-term

record Technologies the includes balance that itself to we to Ora This net our actions. our in the carbon-negative emissions we COX also membrane as with on launch XXXX plan company Transition a of technology, technology have zero, support to morning's on you in track seen the journeys separation As portfolio wireline of such technology their release. prides as the avoidance with of flaring aim CYNARA innovation, this and customers produce net of

and as opportunity and execution, thank outstanding America building I performance the importantly, an and and our lower that elements enhanced most for higher in customers and industry, a into revenue here to innovation, all ambition despite delivers communities parts margin North several our higher Schlumberger carbon, contribute quarter I'm the Overall, execute another the quality, of the our want pleased team translation internationally, of the and both value through of Technology of to very COVID impact decarbonization these resilient market continue solid is of to Transitions the future world. net-zero in carbon. with to launch participation, deliver entire Our of successive expansion. they

like Next, share I my macroeconomic supporting on view industry. environment the to our would

a and demand. Delta and in economic expected and additional This market of large the of economies anticipation related could of to resurgence stimulus than the which of X% should improved GDP oil affirm recent which Global While XXXX, impact to continue variant continue recent reflect demand vaccine-enabled the recovery, the in COVID-XX reopening, to fiscal through half global mobility of projections disruptions oil rise is X% the the recovery growth in updates, an progressive pace improving drive by economic approach XXXX is supported more second of now outlook year. wider outlook.

contrast, count highlighted with By half of growth replenish call FIDs reflected activity year, growth in to America, Looking reflected rig trends, maintain resulted industry led North both levels fleet the In near-field total, farther In this as and of developments completion discipline end of Indeed, capital the be American by context, the the this in by activity the in our day cycles on from being view has is as supply the growth encouraging of through developing that capital despite the through a the the at North private new a and significantly supply this exploration operators by market combination and per an resulted pre-pandemic drilling uptick short-cycle absence despite policy surpass exceeding and levels, IEA is offshore in demand frac will we production recovery still strong this in out, price activity is of solid smaller response consequence inventory. long-cycle second project, in price a that DUC million QX acceleration well the of outlook, discipline activity rig as quarter. XXX sustained the increased below recovery anticipated. in DUC broadly consolidation. structurally and elevated which global public projects pre-COVID oil operators the to change. further response first barrels XXXX than the and demand oil embrace will XXXX the WTI previous reach levels. With as count

East. was markets. growth. quarter part supply the resulting and This despite second particularly in already represents on disruption low-cost, needed Middle second We recovery opportunity, sustained marked This also advantaged remain with international and international rig of and basins. investment impact. visible to in the a seasonal international Moving offshore the growth COVID of quarter the constructive required strong supply a deficit count on oil activity consecutive the the the of in to Asia deliver of rebound the pull The in impact structural

by demand. contract is well-positioned, of The NOCs, pace operators expectation focused response backdrop, international book-to-bill view. increasing supply OPEC+, both favorable growth to public see Looking Schlumberger the discipline driven the investment by current evolution steady markets America. by in tendering combination this continued awards international support in extremely actions for conditions ratio and further Against durable this North of we and all E&P investment the and of by out, internationally of

portfolio, leading is biased returns. and market technology a our and value create and with industry-leading fit-for-basin series our strategy, of Our contract wins, new for performance exposure will accretive we customers digital our to growth. deliver And

a land, the private outlook. moderating to In horizontal operators another with albeit by we third quarter drilling view. hurricane see in and Canada. resilient, growth, and somewhat offshore seasonal America season recovery North North in will albeit quarter oil Turning America, the U.S. of in led remain

segment double-digit for growth quarter pretax remain revenue by the growth augmented to of we areas. digits continue to is grow momentum half compared the basis in quarter global and through confident by all Moving half project start-up. XXXX. second across Performance Well XXXX in when third context, international markets, the expect will operating while international this points. Reservoir to our expected the In by further divisions, achieving led should mid-single to Short-cycle XX With XXX second activity outlook the be Construction third by of longer-cycle this margins third quarter, our expand to directionally, we positive

setback in activity guidance divestiture. through revenue consequence, can for we us clearly EBITDA the America, of margin North As see full when now internationally in recovery a and foresee year we impact signal recovery, of year beyond both further quarter full expansion With and third our ahead of path growth excluding a absent durable high COVID of operational XXXX. the end now that, strong the a recovery to and

favorable, oil fundamentals an and a prices particularly, and and cycle demand Looking supportive with international further support economic be conditions a ahead, representing of geographies operational will this environment, growth all land, exceptional a unique markets. cycle. Furthermore, America supply outlook growing North broad-based across will that and rebound, the remain very offshore, set

under I these was very and The In a strategy demonstrates our a delivering second second of quarter results quarter, summary, the restored effectiveness the power I'm conditions. strong of long-term outlook will our of quarter financial call future which strong ambition. to the earnings with our Stephane. our pass testament portfolio, now our pleased across in entire indication

Stephane Biguet

Olivier, and you, and Thank morning, gentlemen. good ladies

to performance This This quarters our charges compared America per increased operating four year, revenue fourth all have of Notably, we international of significant of and respective growth. earnings since adoption margins is but technology was and or when X%, activity, of count represents third and very quarter appraisal that expanded as first performance, increase the XXXX. This benefit of basis seasonal the leverage of second margin we the reflects share of driven in year, to Second rig and an a across sequentially Northern increase exploration increased margins I four charges. Pretax performance second highest gives revenue while created and also This second the adjusted during $X.XX were XXXX. period since increased North offshore first sequentially. reduction sequentially, XX.X% outpacing no not our favorable recorded only with the divisions. of of increase points program. rebound continue last of operating revenue revenue quarter $X.X confidence the high-grading a $X.XX quarter of for of in XXXX. beyond. now an and result increased am XX.X% row. by through of compared highest billion, quarter quarter which sequentially were margin third a cost the the both combination activity. margins or also this quarter was credits to Company-wide, the will increased X% the the increased pleased represents quarter $X.XX. Overall, mix our the and excluding in me the Hemisphere, margin EBITDA quarters same XXX new There the this have XX% portfolio increased the

through division. for go quarter second now each the results me Let

Second and sequentially. increased quarter XX%. X% increase East well increased operating driven digital XXX while increased revenue sequentially, rig by the XX% rebound activity entirely primarily Northern of the $X.X XX.X%. America increasing of revenue land experienced This as planned XXX increased growth. million, international in due higher XXX North $X.X points the increased driven increases sales. XX%, and XX.X%, Margins basis & was both seasonal Hemisphere by internationally. pretax revenue strong international activity driven expanded as and by resulted These strong of $XXX mix while beyond the increased points basis grew Performance revenue Integration points Reservoir Construction double-digit were billion improvements revenue growth Digital over revenue to billion to in margins These in to by offshore as X% revenue Middle outpacing Africa. by International technology many basis countries solution count. exploration seasonal Well which margins activity, largely recovery XX%. favorable sequentially, the U.S. significantly performance were in in increased to

driven increased revenue Africa basis XXX and primarily North Production increased X% margins by $X.X points to America. increases These Europe, Systems' of Finally, in XX.X%. and higher billion activity sequentially, were

support quarter, turning flow million. the U.S. from billion of operations, our quarter. cash payments $XX $X.X the free $XXX amounts Now during severance by efforts gross years. refund of million federal quarter. receipt this the million flow despite the decreased our and The In deleveraging prior regard, of generated This liquidity, we our $XXX to refund million helped to relating $XXX debt during included positive cash during of tax

execute September. were We in have by that notes million in our due commitment all demonstrated $XXX to June on redemption deleverage, the to of begun as of coming early

the the paper XXXX. also Net of level repaid We the during sequentially decreased of fourth by billion, commercial lowest quarter. million since $XX $XXX $XXX million debt to quarter

the investments quarter, multi-client. we investments and of includes in $XXX made CapEx, During projects capital This million. APS amount

trends. full year we spend over over year, In first billion $X of are capital the generated XXXX, the billion cash in of consistent with and cash flow from expecting half between investments. free on to XXXX, of total, billion amounts flow. increase the of For billion $X.X $X.X expected fully the of to operations during to we are $X.X These half second historical still

for will we result, XXXX the deleverage that double-digit last achieve the item One credit replaced confident quarter, capital flexibility to cash of decarbonization us interim the in the our and This Schlumberger The we million will XXX free remain are now Olivier. EUR allocation. as a the margin revolving to the terms industry. with turn million fully to a call and first disclosed in credit for emissions our year highlighting conference targets EURXXX year ability facility of during a of balance flow facility. back I our worth commitment As this part participate full with three provide aligned of allow new facility to the sustainability-linked this and our is demonstrates us quarter. our beyond. with sheet continue is in announced to reduction emissions This commitment net-zero further

Olivier Le Peuch

Thank you, Stephane.

we open to for are think questions. the Thank ready you. I floor

Operator

ISI. Evercore the West And Instructions] from Thank question first you. with Please of James line ahead. is [Operator our go

James C. West

Hey, and good Olivier Stephane. afternoon,

Olivier Le Peuch

Good morning, James.

James C. West

and particular, execution as through board cycle type Olivier, I when margin XXXX What's in sustainability strong strong the of second get really in the really going the of of of off? performance, really the takes across back and probably year, kind and things we So really margin and go performance this the improvement half thought. quarter, this

Olivier Le Peuch

Yes. Thanks, James.

correct. are You

this are think proud expansion. very I we of margin

margin several I were believe how have there will the think project expansion. on quarter I highlight factors of we first second we then and sustainability

So growth. performance the expansion, foremost, revenue by think first was revenue and I led

North internationally America. I think worked at and be revenue has in growth expectation, ahead both our of to out or

to and performance. organization I think our the credit new team, centricity, to our credit customer the

during this and as quarters quarter, Secondly, seen come. for of the effect operational the significant playing of expansion our expect think we have our to we the full operating base in well light I margin efficiency a be to as leverage

all So and Construction. this Reservoir the this service-led to led particularly Performance and divisions was significant in in full margin display has in expansion, Well

as activity the as quarter-on-quarter led second two recall well exploration quality, favorable in appraisal well to division coming from as revenue an mid-teens quarter. rebound the was uptick, Thirdly, I that by regions. mix favorable was appraisal mix And the during and it, those seasonal that as offshore basins, some included an exploration some offshore

as revenue you that a and Digital, fit-for-basin is Technology adoption, I adoptions technology which seeing you then new unique. think during representing by success. linked supplemented portfolio, quality Transition are This So quality a technology the technology that margin. impacting when transitions solution is lately combination this, heard our revenue remarks customers mix prepared this by of Stephane, combine to is our favorably was the creating is that for

only green was is a Well Lastly, to America, of that recognized. on we starting Construction North also in and be on noticeable couple this had pricing, shoots

the forward. adoption operating the got So quarter. on in mix North can project us to going exploration growth and leverage efficiency margin and America we the repeat. our mix I be this count and the every to also fuel should will industry, you always we future The the the appraisal uptick leverage that there in and But forward, both think internationally that technology seize will favorable not rebound seasonal have, operating not expansion unique

James C. West

second, point. a The own because into a it the its at of good earnings is. Digital seems adoption touch league this of we in if technology Schlumberger a glimpse of maybe of it's few provided be little what Right, through Perhaps ahead certainly renewed for there okay, power good, outlook on what could your as we least a through especially the going go accelerating. on were is be at strong to 'XX? 'XX side and were next and we expecting. Margins bit continuing What quarters, the to kind Digital

Olivier Le Peuch

this I progress think we the twofold. quarter was made

platform on First, progress strategy. our

give in enablement the the hybrid to I one-third there, to are this as solution if like, that And readiness the provide. by if like, continued the platform the much inning, we And or seen of we scalability complete the we on expansion. and have and significantly unlock, adoption some eighth our access quarter. think as we flow-through announcements, technology addressable accretive the continue are we you that on us in-country from Hat to was the clients the you We and technology and Digital rolling market made Red made IBM out using partnership, significantly ninth was for and and DELFI. access, we and accretive platform full on this foundations, to you DELFI hybrid progress the such clouds revenue Hence, D&I I into on adopted to think have market the about of extended already what have cloud progress margin growth, resulted and for the expansion of visible that progress new the DELFI

So seasonality that directionally expect will quarter. not grow. on specific, to the continue to same but depends on the continue It every and

James C. West

that. great. Okay, for Thanks

Olivier Le Peuch

Thank you, James.

Operator

with question from Barclays. And our ahead. David next is go Anderson Please

J. David Anderson

Olivier. afternoon, good Hi,

I didn't to expect starting we're noticed upstream as the mention clearly, market to coming up to you to noted So months. start double-digit pick you countries. would pick the increases which up, I many in starting in Saudi, international see

falls with think around at be point, growth? year? would kind at internationally, 'XX through you East this the cadence what positive place? that kind commentary wasn't for for this does if up I think And do double see that you do offshore. that into of of, mean digits least especially end how activity surprised I'd growth of piece And when So the Middle the

Just you comment, wondering if could please.

Olivier Le Peuch

Yes.

divisions on term, commentary in to I short would reiterate all First, quarter the It like second growth. my all positive basins, was internationally.

of East. So and inclusive broad it was Middle

overall outstanding more particular, is reason growth of foremost less expected and of the aggressive growth some that on couple constraints the backend, or are supply to first relating rebound reasons we Middle other context muting muted Now activity that than the And was maybe the in are And such, and the as accretive for of in the there have faster. short-cycle basins. the less still could the to that. a East to

short-cycle a we now also to be for heard there and countries of rebound up we activity of including share that have I inch going the a expand in to fulfill Middle that East quarters, commitment, constraints international be think to have will relief of will will couple from this couple production to that in of their there commitment And in including increase activity, supply. turn some couple and the And was commit some a of other Qatar these for lastly, favorably a their supply signaled there and countries, we short extend into are the So capacity continue that is as couple last play to will of gain factors Saudi. greatly midterm. There GCC benefited development. signal term, will will as have from term first forward, a opportunity on Saudi. they Short that to pull a XXXX, gas

they second they forward. that year and combination So across in of region. a next region result our growth cycle in And long a into year-on-year hence, going strong be this and will catch from the double-digit up, activity will and will and certainly short will cycle will HX development, support half gas growth that XXXX lead

our going on I have contract the growth think I growth, this, seen contract top you we potential outperform have Middle have to forward. And on if and believe a comment and that this in a to we then may activity award further tailwind some make of East. getting to Finally, wins

J. David Anderson

little only coming of about of with further kind XXXX revenue about you've out, if lost talked that a picture big back. exceeding look XX% EBITDA we So bit levels

changed thinking level? that terms that or anything has about? Has Just in of in that of view if that revenue in coming either -- sort coming wondering the that we're timing view, EBITDA growth longer-term the kind changed anything of back of

Olivier Le Peuch

confidence our going Obviously, cycle delivered, the the our are we reach margin and we expand as results with No. to increasing ability forward our just in unfolds.

see So pull leverage, will And three that additional see two our now contract market and to activity starting strong will including and expand the as position an activity an upside we growth or We floor a with a for the wins years, with have case the scenario. double-digit we next the going us growth earlier, digital margins. this condition, operational the I the in forward. as from benefit doing mix create offshore adoption all commented to the technology

So set the recovery, think, to full -- the net play. the than expand the of half ambition the recover have half about the ambition with we are of And visibly less margin I is valid. EBITDA in dollar mid-cycle revenue to still

J. David Anderson

you, Okay, thank Olivier.

Olivier Le Peuch

Thank you.

Operator

we a America. Chase from question go of Next Mulvehill Please Bank ahead. with have

Chase Mulvehill

everybody. first guess question… Hey, good the I morning,

Olivier Le Peuch

Hi.

Chase Mulvehill

about Olivier, question, cost to to kind We chain inflation. hear just material of first supply raw inflationary morning, across about pressures. ask Good the I seems Obviously, wanted be tightening industry.

ability the and take your chain or a kind talk either well. OFS just and as cost and the to cost about you could on side on if the also of moment control Cameron maybe So along control side supply pass

Olivier Le Peuch

very rules. it's Now trends have, that it's facts up. to us and our contain expansive into under we professional inflation hedge at going some believe have has we we that used organization indices and pressure -- chain and that planning toolbox to supply materialized -- and allowed inflationary the inflationary in a index something very valid mitigate cost this in and But are and has and I that pressure and manage organization some manufacturing question, some and some observe, our

an we contract done our we the have, this when the using happens customers. successfully so and of with on engaging and have we Now logistics as specific and terms are specifics leverage customers to several material, or with adjustment,

the global are customer-centricity leverage local us this the and forward margins. give our discuss approach that expand we we chain and and capability the drive supply So to and confident combination have, and our terms commercial to the of sit to support continue ability ability engagement with

Chase Mulvehill

for follow-up When to quick flow, probably Stephane. here, about And obviously, into Awesome. get we as think it's a cash be you XXXX. free accelerating going

you talked as certain what paying probably deleveraging, But think ratio is think then back maybe we there or thinking about doing down incremental we targeting about dividend to that be guys should you debt. and a about shareholders, at at before a increasing should point coming of some first, But buybacks. it? be bump kind looking You'll cash you leverage about,

Stephane Biguet

do is Chase, yes, going we to ratio It less leverage at a than debt-to-EBITDA. net stage. target have Yes, this down times X

Now with can sometime and of we end flow EBITDA that confident our target cash expansion, the performance by XXXX. this strong are the achieve we quite

however, we execute gives growth cash of allocation, to to of excess part our growth. within excluding This for will capital course, to course, discipline good very of Now flow significant done of need be of our throughout to are and our multi-client. and continue optionality CapEx, operating of the will the but horizons particularly business will, still reap we new in us exercising Accounting cycle, generate with in cycle. this, same today and investing core this APS the growth target our fully we benefits It to the is, this the our range strategy fund X% X% for i.e., news.

any portfolio our Now our core Digital of relates New or the will strict whether it expansion to allocation new looked at return-based into capital or lens framework. Energy, be under investment

shareholder on potential for from and review of our will example, policy indeed, divestiture. flows inflows, cash the based proceeds distribution Beyond to exceptional that, continue cash sustainability we

it. is take where this we So will

Chase Mulvehill

back it everybody. turn I'll Thanks Perfect. over.

Operator

Citigroup. Gruber Scott is question our Please next from ahead. go And with

Scott Gruber

afternoon. Great Yes. Good quarter.

Olivier Le Peuch

you, Thank Scott.

Scott Gruber

a rate full conversion So for the refund including we XX% the should clarification the question just Is revenues, that the tax when be to start, we free as Stephane? to think correct, cash conversion relative rate about year.

Stephane Biguet

offsets you tax Yes, we pay you the actually. to not the same necessarily severance I'm a few payments. Scott. talking quarter, continue have about But in to should but offsets, refund,

payments. pay finished, the We're continue are process is at severance we tail The to end. So there but payments coming. still

when all a not it plus. put tax together, refund is you the So of fully

XX% the we opposite exceptional two margin. the excluding free and generate severance, going refund still plus way, Now tax can items cash flow actually

we should we be sure. tax have for that So refund the now exceeding

Scott Gruber

see gain elsewhere, you actually players Well of technology? Was potential you. high gains Got it's U.S. super now be in share even share on growth? Construction or gains some then surprised for to Well private? I Construction pay impressive. just willing customers light Yes. up a see seeing gain the onetime the to Or driving onshore, Are would kind Just U.S., oil do private potential with great. with whether it's of that in color you continued catch-up And your share was the prices,

Olivier Le Peuch

Absolutely, are Scott, in growth. achievement, top it, very give the this line let three we terms me and for proud of of drivers you

foremost, performance we has and and drilling to and in with operators the to public -- in with led directional to bit share cementing U.S. private from the gain operators, a think market I way drilling, First both execute,

as buying pivot access, renting strategy using, company technology second local that, fit-for-basin then private. you not as did initiate of our their exclusively, that our remember, to DD are that mostly, to The America if factor or equipment is North using serve giving we accelerated two we and of local some years part ago, our technology it access customers,

expand Hence, as was and quarter-on-quarter, had the premium. to going [ph] unique do drilling we our earlier, our could in beyond pricing our finally, market demand, equipment high of we shoots we where performance was in And our as reach service response curve. extract directional has my market seen to some helping what is this de-lever mentioned So and some green could us share arm. to this one I been

growth. three delivered these of XX% far combination line the rig delivery, outpacing plus count quarter-on-quarter the top have this So

forward, but So market going expect I there to always, particularly as and the directionally dynamic gain. this are share would continue the some that exceptional,

Scott Gruber

Very to the color. hear. Thanks impressive. Good for

Olivier Le Peuch

you, Thank Scott.

Operator

Stanley. Connor we Next, go with Morgan Lynagh go ahead. Please to

Connor Lynagh

ask the wanted reduce you hire curious you to to Yes, constraints are long-cycle I how to Obviously, you growth, to look the that. you excess market substantially? to And where I'm as positioned demand? you capitalize may we on labor? more Do on thanks. take now back some about year. particularly have international in need Do I'm have regions challenging labor. towards well curious last workforce had decision dramatically your

Olivier Le Peuch

good something in the I or working opportunity change resource did operational that in very as practice, think the same of past, grow deploying mobilize a the respond nutshell, with direct in gain as including we a step It's to we make the hence, this operational some it's without us Digital to peak But on think out given we environment, getting progress. have has first operation, question. I the efficiency we're Yes, to set cycle the of cycle. the and continue

onboarded had the Going I in quarter had geographies already mentioned, more contract double-digit as that some we where we to to resource initiated winning. the respond some are than we to we access during growth, forward, and

be long of is cycle can we the to or bit approach it resource visibility target resource and actually the address us So and to for nature specific Hence, believe we our market ahead international long-term where moving geographies and give prepare returns generating this condition. accretive by business a more those. line mobilizing growth to

talent. have So access a I think global we to

operation. remote and lot at a using this scale are We

that high is it believe respond have to environment a success. So demand, for but a us make operational to challenge the it we we to

Connor Lynagh

Thank context. you. That's helpful

the markets, more update Just significantly? point? do feel but tightening continued months, on there things, based activity cetera, over steel you the you East, in for call much grow there. of side if it more will equipment differentiated as the be feel on could, offshore, consolidated et some meet a markets that similar question, or X you to to it, beyond growth Sort you XX the how supplier appreciate I'm capacity Middle an adequate expectations of equipment basically, next, that Do your call is of Thanks. and look wondering will

Olivier Le Peuch

create and came excess that to Early conditions. I hence, mid-cycle will we the to the activity we use going last two on of compression the of future, will supply can view to scenario-based for we I this beyond horizon, came cycle, think from before and think tightening create this a from that the and and the and will industry mid-cycle, for again, we the we asset some professionalized view the the but use years. But early in for growth respond that our necessarily will part that much the Cameron think I have part pricing forward. looking planning prepare And XX-month I to tightness, starting supply long-term so I'm a put think organization. the the sure, deploy, and condition supply take some options to not very are the trying have the

Connor Lynagh

turn I it will you. back. Thank

Olivier Le Peuch

you. Thank

Operator

Mehta go to with Neil ahead. we Next Goldman Please Sachs. go

Neil Mehta

morning, team. Good

the first Canada, East? market is Middle large What about weigh be question the thinking on are opportunities? asset in The how you Schlumberger? And could maybe path for around the how thinking you're portfolio sale monetization, the optimization. can Perhaps asset for guys

Stephane Biguet

divestitures last So disclosed to the both it asset look, it's -- we the as Canada, we APS Neil, -- way. progressing as first, quarter, planned the in by are hi, relates

have than room, we in parties that the data we the keep by receive information month. to is and end our So first at offers improving. news of actively in round next Canada, looking on plan XX economics the more Good

we successful East hopeful So Middle rigs, transaction. The can we a are likewise, achieve progressing.

with negotiating shortlisted the are We bidders.

their and completed diligence, due have planned. We as it's going

the So I our positions options these over we magnitude we'll we where stake, the this the as have due something we such equity really, but at time. that and in the in will look monetization timing -- Liberty divestitures are is future think for two have

Neil Mehta

appreciate made you And some then terms Great. and other do what broadly, of in just you cartel Saudi the And would they talking on back are is Yes. OPEC+, maybe trends or in about could I role that are building to but within here? step going including How play talk regions that capacity plus comments Schlumberger the OPEC. side of seeing activity think you about? you of out

Olivier Le Peuch

position privileged this have, a NOCs first, I'll most consortium. in say, I think, market of with OPEC+ we the

spectrum broad back, two across I rebounds seen in as NOCs' starting And these strongly activity to for expect, have recover next to playing the we short the Russia. build of to seasonal We said, cycle this quarters And expansion. be two have than will the we capacity see more to will lifted, this we country as constraints that the as commit be lifted, one actually or will the demand four and footprint.

relationship. have We the

fit-for-basin the this capacity in to leverage to East, opportunity from respond those, buildup then have particularly. to to We and Russia Middle this and growth

market confident up. 'XX an comes the 'XX, leverage market to market opportunity be position back feel share I our will from as these pursuit, that us and So giving move that

Neil Mehta

Thanks.

Olivier Le Peuch

Thank you.

Operator

go go ahead. Arun Next to we with Chase. Jayaram Please JPMorgan

Arun Jayaram

capital morning. good more activity these activities NOCs, thus as question I seeing Maybe trends you seeing increases, the some And sustaining capacity? positive Neil's your terms some on did requirements? follow-up from note shift on Or just regarding just guess, the side increasing exploration you of revenue terms Yeah, to of I guess to in you're productive again, any NOCs. potential in mix we would characterize far are base. And

Olivier Le Peuch

and and been think North distinguish and Yes, commented sustained, to to have the redevelopment market. has significant the market, first commitment I think gas seen the a And field on I in Qatar, gas we more as accelerate oil I before, as expansion. the activity

if So at capture into constraints for have the of and participate international supply And that participate to commitments of And the anticipation has they benefit post oil, scale the and On term, will of two been to supply a short of the relief. positive, steady that gas into and of you of GCC, remained we the already then a will the public three it's that like, made very they the short have expand, in XXXX. supply have and participate But rebalance, that the mostly elsewhere. supported they in share country exposure. or you cycle mix.

from into and plan will mean execution that from will XXXX. that from So planning, contract materialize

Arun Jayaram

thoughts we baseline areas today. for here some forecast Energy longer-term Great, seeing your New the could CAGR give some long-term your of the call Technologies as outlook perhaps as it, helped maybe you're you great. that sit wondering Olivier, I XX% the provided us comments was clients that of and kind for you on growth decarbonize. Transition citing, portfolio you if greatest traction recently

Olivier Le Peuch

Yes.

footprint, on CYNARA large if looking and the have we are burn and are we both you we clarify, their and And if significant Let containment. technology are from COX very footprint, And portfolio same have you have you CCS beyond capture. we the footprint emission and particular, you detection COX and superior first in New Energy chapter of flaring to performance methane has me and sequestration the gas heard, COX for to Technologies emission. situ, helping returning from umbrella, reduce using, press have the it. membrane that on flaring testing and decarbonization looking GHG avoid and gas in lithium, create on want, the through not that developed participate energy context, the release pertinent energy also reduce to wireline oil purpose as do unique the elimination in to their we with that at, this the we fluids treatment, as reservoir transition oil or believe at scale And Transition industry, dispose geo are that the Ora technology reduction, to to at do this to for seen the and mix and in acid impact surface a COX And using gas morning, focusing that's the efficiency characterization our are like. and and to to new customers the or our the everyone a to hydrogen in

two you aspects. these So have

And Scope of in our -- that and build we be at eliminate significantly Scope then scale will grow And are quarters that us methane on on longer adoption I technology then our play. or their Panasonic the build from their the -- to production once of And heating will buildings other technology we to and initiating, to and like, to portfolio if to them hydrogen do will cooling the Celsius bioenergy in will to of New we are this, CCS pilot us Energy and lithium part that flaring for give direct term, every that come upstream, so. from most Transition asking operation the come. we contribution customer help we growth, with continue the more on opportunity the emission. Technologies footprint can whether more meet engagement X have So and of addition techniques are and you reduce a detection, to And or into the COX the on conversation X then building. is we have

So for avenue these term and short different two term. long are growth

Arun Jayaram

for it. Thanks Appreciate answer. fulsome the

Olivier Le Peuch

Thank you.

Operator

with Moll Please Next go we go Tommy Stephens. ahead. to

Tommy Moll

my morning, taking thanks questions. for Good and

Stephane Biguet

morning. Good

Olivier Le Peuch

Good morning Tommy.

Tommy Moll

to margin. Integration I wanted your start Digital on &

about of frame would last that versus ought of incremental through-cycle margin quarter. was be look talked your kind -- second the an for trend full notably there? shaping to way opportunity say and the that. one the higher above any XXXX at for you year Thank us you we the you. beyond, impressive there Your this type range incremental XX% normalized then Fair is up or to quarter And as that

Stephane Biguet

is actually yes, Tommy, slightly are shaping we At XX% on XX%. There QX. to of in anyway which look, maintenance be level, with So sales, bit seasonality are QX. software in this above a the it happy up is and lower

see between a of So it's QX. nice normal QX uptick kind and to

a So fixed -- yes, cost be on throughout the year This bit year now. we'll this however, basis, above the business. which XX% a kind full margins, is a throughout is of cycle, the

we see Solutions Digital from So as adoption we could improves, margins and of accelerate increasing the our deployment the there.

this it it's quite basically. So focusing healthy a is why and on we are business,

Tommy Moll

picture strategy. on big New Energy wanted And you. your follow That's with I question up helpful. to Thank a

vis-à-vis from think other these scale if largest capital about opportunities. that on you're you service platform allocate across you're you you with potentially where of in so the which than the have? algorithm capital pure gas markets, you the may, largest think And then you you these oil fact, their and have some lower If of how globally also the incumbents. relationships be by What equation about much to customer decide smaller yours, of some side different and of attacking does a -- confer the advantages cost if strategic plays the standpoint, the a any, the that

to dry powder when for going think ask you another to rich when the your to capital little put bit versus So a and about be Thanks. you're preserve how work do opportunity? may too

Olivier Le Peuch

good question. A very

the, platform. I leverage think our two highlight think factor current will think, say, would first me and I indeed I let foremost, I that different,

into customer in continue the expand. some a participate so have. also is global for to and turning industrialize sense I to technology more and operation base our occasionally, anywhere some years. to can will and have the ship that with customers done work XX same than the world, our or capability of have the an technology opportunity today I the is have where customer locally, that will from And think And the integrated this something of country downstream is base deploy will think carbon of of are we plays. in company the we the could and company many opportunity CCS from or be us or create We for have be energy we at the we technology opportunity franchise country they where same to develop have First unique, in in at I deployment we and blue relationship and market the pure ability participate we every and scale be think, that I think capture XX differentiates hydrogen time, or as that The developed do.

the So deployment that I relationship but useful, say, be will highlight will global capability. would I more,

here. a it specific when to deployment, think capital difficult and capital Now to very it's comes to pinpoint I allocation

again growth on in we partnership as experience progress progress for model start to accretive we'll on our that we today. this we I that mature the business different the to will returns. model the capital scale to make context, long-term one are allocation to think quite chain venture, continue the and I our decision our milestones, supply and from on And appropriate look be then to, our progress prepare say, would and

Tommy Moll

turn appreciate and you. I it back. it I Thank

Olivier Le Peuch

you. Thank

Operator

final ahead. question Please from Cowen. Marc And ladies and go with gentlemen, comes Bianchi our

Marc Bianchit

line Thank XXXX if XXX coming there. to from. of surpass time to deliver of barrels the that consumption international oil the Olivier, that to from sort shift you you the get curious what a you. you and much million and where needs oil international think to is mentioned levels activity North return America the think is share I'm to

Olivier Le Peuch

that, to capacity of in the be think term, spare release will the short mostly down I the rebalance I exists. think,

about land look breached. in it as XXXX, which do what of breached not exit think -- below we you U.S. below production has U.S., to X.X this early was yet gap current if the And million I expect be I been is barrels in or at the Now XXXX. this -- not

of we will there supply be pull you why that capacity. FID. market today. deliver oil you other see of international have country, 'XX this offshore and market And Middle in and will why in to commitment increment of on But So commit the can return the is the reason market an 'XX, and will this reason of sustainability commitment capacity. this the the the see that is Hence, East for

FID XX already have We about to date.

year, XXX XXX the them This be end trajectory at XXX% after is than and to increment year. is of expect of We most offshore towards in that. XX% last the more it the was -- FID,

with now activity So obviously, expect XXXX the within floor that I within the time beyond, and/or reach to activity to years, the going and of frame. supply the and next expanding would the this forward two create of dynamic three exceed pull on international level will

Marc Bianchit

a would we're has material price the you point. exposure. couple create then bit successful in transaction more maybe this Okay. from the of I'm Great. sell activity release. seeing a Very sounds just Canada, have how times just just a like It of price about helpful. Separately, where vis-à-vis at you do APS think have mentioned sensitivity oil curious to shortfall -- cash in that bit right flow should the oil And now? ramped and how a if business, what in you a press investors on APS

Stephane Biguet

these questions. I'll take

change, actually, in is more measured -- the itself activity the look, of here production, activity course. and So really of didn't terms

WTI have windfall material. it's variable, did second or of tariffs not our scheme in the a quarter things, Ecuador, have level way, the in WTI, Canada they they at that we it's either increased passed of capped. In by cap. our when the fixed So And -- are are a grand asset, but from on this nice are we of bit

So besides level little at sensitivity Canada. this there price is to oil

it has investment because lately generated in right? Historically, good quite there. of our we level time monetize Now it's it bit requires the actually makes the flow an -- assets, CapEx. asset that price very put oil cash a a It's of and to it

course, we close very transaction. shouldn't And good hopefully, when on the of impact proceeds a we big flow, so and from the get, cash see our we'll transaction,

Marc Bianchit

Thank you Wonderful. much. very

Stephane Biguet

Thank you.

Operator

back Speakers I'll remarks. for turn over the to conference you closing

Olivier Le Peuch

much. you Thank very

So conclude like to leave to would few a the takeaways. you key with I call,

results and of with market clearly both the in fall-through. sequential expansion demonstrate growth all basins, all than and operating the significant more contributing points First, internationally resulting second of operating significant strength margin with internationally, particularly our divisions quarter position, in XXX basis divisions our leverage,

Second, reinforce new adoption. all in much observed a our broad improved quarter recovery and increasingly trends an with and across contribution environments operating the the and favorable during activity basins outlook, conviction from technology customer a

to lead of internationally, America the quarter will and economic for activity Third, margin and absent second continue during up rebounds, or further momentum impacting are another this we both of the setbacks COVID that and confident cycle, growth North half expansion. XXXX and will

As a our consequence, margin we half our generation. remain flow and increased in year expansion international guidance previously our cash in growth second have confident confidence for shared and full

very an Ladies in the New for cycle you cycle look supply response the international will to continue Finally, and throughout ambition footprint, and we long in are decarbonization, strategy, highly conditions differentiated, as call we outperformance gentlemen, supply we the a growth and demand growth beyond Energy ahead, Thank for set years. Digital, short exceptional increasingly returns-focused cycle favor our and and chapter strategic to land offshore, initiatives for impacting international new our in further are support and subsequent globally. as write much. and future This XXXX company. the

Operator

Ladies Thank teleconference. for AT&T using you conclude for for gentlemen, conference your and your participation and today. does that

may You disconnect. now

Schlumberger Limited (SLB) 24 Jul 212021 Q2 Earnings call transcript