Schlumberger(SLB) - 2023 Q4 - Annual Report

Geopolitical and Market Risks - Demand for the company's products and services is highly dependent on oil and gas prices, with past downturns significantly impacting financial performance[45][46] - The company faces risks from geopolitical instability, including potential disruptions in markets where it operates, such as Russia and Ukraine[49][52] - Russia represented approximately 5% of the company's worldwide revenue in 2023, with net assets in Russia valued at $0.6 billion as of December 31, 2023[51] International Operations and Revenue - Non-US operations accounted for approximately 84% of the company's consolidated revenue in 2023 and 2022, and 85% in 2021[49] - Approximately 72% of the company's revenue in 2023 was denominated in US dollars, with significant expenses incurred in foreign currencies, exposing the company to foreign currency exchange rate risks[154] Energy Transition and Climate Change - The energy transition poses a significant risk, as failure to adapt to changing customer preferences and government requirements could adversely affect demand for the company's products and services[53] - Climate change regulations and initiatives, such as the Paris Agreement, could reduce demand for the company's products and services and increase operational costs[65][67] - The company's business is exposed to severe weather events, including those associated with climate change, which could result in increased operating costs or decreased revenue[74] Cybersecurity and Intellectual Property - Cybersecurity risks are a major concern, with potential impacts on the company's reputation, financial condition, and operations due to cyberattacks and data breaches[54][55][57] - Intellectual property risks, including potential infringement claims and challenges to patent protection, could impact the company's competitive advantage and revenue[59][60] Environmental and Operational Risks - Environmental compliance costs and liabilities could have a material adverse effect on the company's business, financial condition, and cash flows due to increasingly complex and stringent regulations[68] - The company uses and generates hazardous substances, which could lead to material liabilities related to contamination cleanup and personal injury claims[69] - The company faces substantial liability risks from well incidents, including blowouts and loss of containment, which could adversely affect its financial condition and cash flows[70] Sustainability and Public Health - The company's sustainability goals and emissions reduction targets are subject to operational, reputational, financial, and legal risks, and may be revised due to future innovations in measurement technologies[71] - Public health emergencies, such as COVID-19, have had and may continue to have a material adverse effect on the company's financial condition, results of operations, and cash flows[75] Competitive and Regulatory Environment - The company operates in a highly competitive environment, and failure to maintain technology leadership could adversely affect its market share and pricing power[58] - Compliance with international, regional, and local laws and regulations, including anti-corruption and trade control laws, is critical to avoid material adverse effects on the company's financial condition[61][62][63] Financial Risks and Forward-Looking Statements - A 10% appreciation in the US dollar would decrease the unrealized value of the company's forward contracts by$ 103 million, while a 10% depreciation would increase it by $113 million[155] - At December 31, 2023, the company had outstanding contracts for the US dollar equivalent of$ 10.6 billion in various foreign currencies, with $5.3 billion related to hedges of debt balances[156] - The company's forward-looking statements are subject to risks and uncertainties, including changes in global economic conditions, oil and gas prices, and regulatory requirements[157]