Schlumberger(SLB)2022-06-01 17:37Schlumberger Limited (NYSE:SLB) Bernstein 38th Annual Strategic Decisions Conference June 1, 2022 Industry and Company Overview * Industry: Oil and Gas * Company: Schlumberger Limited (NYSE:SLB) * Participants: Olivier Le Peuch (CEO), Bob Brackett (Bernstein Analyst) Key Points Industry Environment 1. Market Fundamentals: Constructive due to low global inventories and spare capacity, driven by past underinvestment and the need for supply diversity following Russia's supply disruption [7]. 2. Efficient Industry: Emerging with greater capital discipline, focus on returns, and the power of digital to enhance performance and productivity [8]. 3. Sustainability: Increasing focus on sustainability commitments and climate actions, with decarbonization of oil and gas operations becoming a mandate [8]. Schlumberger's Position 1. Geographic Focus: Leveraging international franchise and high-performing North America business to benefit from broad-based oil and gas investment growth [9]. 2. Technology and Digital: Adopting digital platforms, cloud-enabled workflows, AI/ML applications, and digital operations to increase operational productivity and efficiency [10]. 3. Sustainable Technology: Developing sustainable technology, including the Transition Technology portfolio and end-to-end Emissions Solutions, to help operators meet sustainability commitments [10]. Examples of Schlumberger's Impact 1. Autonomous Operations: Autonomous operations on the Peregrino platform in Brazil demonstrate the future of well construction with digital native foundation and unique equipment and service integration capabilities [11]. 2. Methane Detection: Collaboration with the University of Texas on Project Astra to advance methane detection and achieve zero methane emissions [12]. 3. Subsea Multiphase Compression: Deploying subsea multiphase compression systems in the Ormen Lange Project in Norway to increase production and reduce CO2 emissions [13]. Financial Performance 1. 2021 Results: Delivered $3 billion in free cash flow and expanded adjusted EBITDA margins by 320 basis points [13]. 2. 2022 Q1 Results: Achieved 14% year-over-year revenue growth and 62% year-over-year EPS growth excluding charges and credits [14]. 3. Dividend Increase: Recently initiated a 40% dividend increase [14]. Future Outlook 1. Compelling Environment: Schlumberger is well-positioned to create value for customers and shareholders in a compelling industry environment [15]. 2. Financial Outperformance: Early stages of unprecedented financial outperformance, with high confidence in continued value creation for shareholders [15]. Additional Points 1. Oil and Gas Cycle: Comparing current cycle to the 2006-2008 cycle, with favorable factors including demand growth, underinvestment, capital discipline, and energy security concerns [18]. 2. Russia and Ukraine: Schlumberger's approach to operations in Russia, including compliance with international sanctions and suspension of new investments and technology deployment [24]. 3. Capital Discipline: Schlumberger's focus on capital discipline and its impact on pricing and margin expansion [28-30]. 4. Inflation: Schlumberger's ability to manage inflation and offset its impact on margins [32-33]. 5. Talent Acquisition: Schlumberger's strategies for retaining and attracting high-quality talent, including brand reputation, development opportunities, and commitment to sustainability and digital [35-36]. 6. Digital Integration: Growth potential of Schlumberger's digital and integration business, including cloud-based platforms and data management solutions [44-47]. 7. New Energy: Schlumberger's focus on technology-driven new energy solutions, including CCS and direct lithium extraction, with a focus on capital efficiency and adjacency to existing capabilities [55-60]. 8. CCS: Potential for CCS to become a significant market with economic incentives and end-user demand [63-68]. 9. Value Proposition: Schlumberger's value proposition as a technology innovator, global scale, and execution [70-71].