Slb Limited · NYSE:SLB
Slb — Schlumberger — Scotia Howard Weil 2016 Energy Conference
21 slides from Slb's conference presentation, Mar 21, 2016
Slide 1: Scotia Howard Weil 2016 Energy Conference
Paal Kibsgaard Chairman and Chief Executive Officer Scotia Howard Weil 2016 Energy Conference New Orleans, March 21, 2016
Slide 2: Forward-looking statements
This presentation contains “forward-looking statements” within the meaning of the federal securities laws — that is, statements about the future, not about past events. Such statements often contain words such as “expect,” “may,” “believe,” “plan,” “estimate,” “intend,” “predict,” “anticipate,” “sho
Slide 3: E&P Industry Macro
E&P Industry Macro 120 700 100 600 Spare Capacity 500 80 E&P Capex ($ billion) Production (MMbbl/d) 400 Oil price ($/bbl) 60 300 40 Oil Price Global 200 Demand 20 100 E&P Capex 0 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: 2016 data based on averages to date and latest estimates f
Slide 4: E&P Industry Macro – Managing Downturns
E&P Industry Macro – Managing Downturns Demand-Driven Events Market-Share-Driven Event 120 700 100 600 Spare Capacity 500 80 E&P Capex ($ billion) Production (MMbbl/d) 400 Oil price ($/bbl) 60 300 40 Oil Price Global 200 Demand 20 100 E&P Capex 0 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2
Slide 5: The Industry Challenge – Not Driven by Service Pricing
The Industry Challenge – Not Driven by Service Pricing Dramatic rise in capital intensity between 2000 and 2014 Oil Service Pricing(1) E&P Capex per boe Basic service pricing entered long- term decline over the same period 2016 reductions have not solved the 2000 2002 2004 2006 2008 2010 2012
Slide 6: Procurement-Driven Commercial Model
Procurement-Driven Commercial Model Technical Design Procurement Process Project Execution Operator Operator Operator Procurement Procurement Technical Scope Procurement Scope Project Delivery Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier SupplierSupplier Supplier Supplier
Slide 7: Consequences of Procurement-Driven Model
Consequences of Procurement-Driven Model Project Execution Sub-optimal project performance due to: Operator Failure to drive sufficient improvements in reliability and efficiency Procurement Project Delivery Inability to leverage technology system Supplier Supplier Supplier innovation and integr
Slide 8: Schlumberger Performance – The Case for Transformation
Schlumberger Performance – The Case for Transformation Free Cash Flow Margin(1) Operating Margin(2) 15% 35% 10% 30% 5% 25% 0 20% -5% 15% -10% 10% -15% 5% -20% 0 -25% -5% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Schlumberger Main Services Peers Main IOCs Main NAM Independents (1) F
Slide 9: Our Transformation Program – Delivering Results
Our Transformation Program – Delivering Results 12 1.4 HSE Reliability 1.2 10 1.0 0.8 8 0.6 Lost Time Injury Frequency 6 Non-Productive Time / Operating Time 0.4 0.2 4 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 12% Capital Efficiency 7 Free Cash Flow 6 10% 5 4 8% Capex / Revenue 3 Cash flow (
Slide 10: Transformation – Technology System Innovation
Transformation – Technology System Innovation From single components to total systems From subsurface to surface Digitally enabled, software controlled 10
Slide 11: Reservoir Characterization – Continued Leadership
Reservoir Characterization – Continued Leadership Wireline #1 Market leadership in measurement, Seismic Well Testing instrumentation, modelling, and software #1 #1 Petrophysical data and computing power represent the backbone of Schlumberger Largest community of petro-technical Software* #1 Co
Slide 12: Drilling – Fully Integrated Downhole Systems
Drilling – Fully Integrated Downhole Systems Directional Drilling #1 Logging Industry-leading portfolio built on our Drill Bits While Drilling #1 #1 reservoir characterization strengths Complete range of leading technologies across the drilling workflow Rental Drilling Fully integrated drillin
Slide 13: Production – Life-of-Well Solutions
Production – Life-of-Well Solutions Completion Equipment #4 Pressure Use of scientific platforms to extend Pumping #2 Artificial completion and stimulation capabilities Lift #1 Evolved from basic completions hardware into instrumented and intelligent systems Specialty Slickline* Developed the
Slide 14: Cameron – Subsurface to Surface Integration
Cameron – Subsurface to Surface Integration Subsea Processing #1 Drilling Pressure Components integrated into systems with Control Subsea #1 Production software control and automation #2 Setting new levels of performance in fully integrated drilling and production systems Cameron technology po
Slide 15: Fully Integrated Land Drilling System
Fully Integrated Land Drilling System Fully integrated and digital control system with guided workflows and functional monitoring Design includes Cameron equipment and uses manufacturing capabilities of Bauer JV Engineering prototype rigs ready for field test in 2016 in Ecuador and the US 15
Slide 16: Fully Integrated Hydraulic Fracturing System
Fully Integrated Hydraulic Fracturing System Digitally enabled with process re-engineering Includes Cameron, leverages CamSHALE Uses advanced fracturing fluids and completions 16
Slide 17: Transformation – Collaborative Business Models
Transformation – Collaborative Business Models Schlumberger Production Management (SPM) Collaboration & Commercial Alignment Integrated Drilling Services (IDS) Integrated Production Services (IPS) Integrated Services Management (ISM) Standard Services 17
Slide 18: SPM Portfolio of Projects
SPM Portfolio of Projects Exploration Development Production Minimize Operating Expenditure Maximize Production Maximize Recovery Accelerate Production Defer Abandonment Minimize Capital Cash Flow Expenditure Time Land Land Oil Heavy Land Land Oil Heavy Oil Oil Land Land Oil Oil Land Offshore Tight
Slide 19: Business Update – Another Step Down
Business Update – Another Step Down Months after peak 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 0 Current downturn 17 months long with -10% 3 distinct phases Change in US Drilling Rig Count After Peak (%) -20% Phase 3 decline causing -30% unprecedented impact and disruption -40% 1999 Q1 revenu
Slide 20: Oil Market Continues to Tighten
Oil Market Continues to Tighten Annual Oil Production Deferral(1) OPEC Spare Capacity(2) Non-OPEC Oil Production Global Oil Demand (MMb/d) (MMb/d) (MMb/d) (MMb/d) 2016 2017 2018 2019 2020 +1.2 95.8 7 0.0 94.6 6 0.6 -1.2 MMb/d 5 92.8 4 1.6 53.2 -0.8 3 52.3 2 51.8 2.4 1 0 3.2 Jan- Jan- Jan- Jan- 2014
Slide 21: Conclusions
Conclusions E&P investment cuts now so severe they can only accelerate production decline Our solid cash flow and balance sheet mean we can operate longer than most We have used this downturn to further strengthen our relative position in the industry Temporary international pricing cuts sho
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