\n| n\/m = not meaningful<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n<\/table>\nStrong Growth and Broad-Based Attributes<\/b><\/p>\n
\nSLB CEO Olivier Le Peuch commented, \u201cI am very pleased with our start to 2023. We delivered strong year-over-year revenue growth and margin expansion at a scale that instills further confidence in our full-year financial ambition. The quarter was defined by strong activity dynamics offshore and in the broader international basins, most notably in Well Construction and Production Systems.<\/p>\n
\n\u201cCompared to the same period last year, revenue grew 30%; adjusted EBITDA increased 43%; EPS\u2014excluding charges and credits\u2014increased 85%; and pretax segment operating margin expanded 298 basis points (bps). All Divisions grew, both in North America and in the international markets, reflecting the strength of our portfolio across geographies and business lines. Revenue growth surpassed rig count growth both in North America and internationally\u2014representing the highest year-on-year quarterly growth in more than a decade.<\/p>\n
\n\u201cSequentially, revenue grew 4% in North America, our eighth consecutive quarter of growth, benefiting from our exposure to the most resilient basins and market segments. Internationally, the sequential revenue decline was less pronounced than historical trends as seasonal effects were partially offset by robust activity gains.<\/p>\n
\n\u201cWe continue to see positive pricing as our performance differentiates, technology adoption increases, contract terms are adjusted to offset inflation, and service capacity continues to tighten in key international markets. In this environment, our customers are more actively collaborating with us to improve their operational performance, attain decarbonization objectives, and lower overall costs through the increased use of our differentiated technologies.<\/p>\n
\n\u201cFirst-quarter cash flow from operations was $330 million, reflecting the seasonal first-quarter buildup of working capital that will support our anticipated growth for the year and the payment of our annual incentives. Free cash flow generation is expected to accelerate throughout the year, consistent with historical trends.<\/p>\n
Great Start to the Year Anchored on a Very Solid Core<\/b><\/p>\n
\n\u201cYear over year, our Core Divisions collectively grew by 34% and expanded operating margins by more than 300 bps. Each of the three Core Divisions delivered very strong growth and expanded margins\u2014driven by increased activity, pricing, and technology adoption.<\/p>\n
\n\u201cIn our Core, we continue to leverage the industry\u2019s most comprehensive technology portfolio with disruptive fit-for-basin technologies, advanced digital solutions, and an unmatched ability to integrate across the entire value chain\u2014from subsurface to midstream.<\/p>\n
\n\u201cIn our Digital & Integration Division, digital sales posted strong year-on-year growth that is on track with our strategic ambition as we continue to secure new contracts and accelerate cloud and edge solutions. However, the increase in digital sales during the quarter was largely offset by a decline in Asset Performance Solutions (APS) revenue, arising from production interruptions in Ecuador and lower revenue from our Palliser asset in Canada.<\/p>\n
A Resilient Cycle\u2014Powered by the International and Offshore Markets<\/b><\/p>\n
\n\u201cLooking at the macro, we maintain our very constructive multiyear outlook as the upcycle attributes and key activity drivers continue to evolve very positively. The international and offshore markets continue to experience a strong resurgence of activity driven by resilient long-cycle development and capacity expansion projects. In contrast, the North American land market, which has led this upcycle in the early innings, could potentially result in an activity plateau in 2023 due to lower gas prices and capital restraint by private E&P operators.<\/p>\n
\n\u201cOn balance, the global activity outlook for the full year remains very solid. Through the first quarter, the resilience, breadth, and durability of this upcycle have become more evident, particularly in the international markets. These attributes are highlighted by the following factors.<\/p>\n
\n\u201cFirst, there is broader recognition of the positive long-term demand outlook for oil and gas and the potential for a stronger demand rebound in the second half of the year. In addition, recent OPEC+ decisions continue to keep commodity prices at supportive levels\u2014providing operators increased confidence to execute their projects.<\/p>\n
\n\u201cSecond, broad-based investments to expand oil capacity and diversify gas supply have been reinforced by the capex plans recently announced by major IOCs and NOCs. Most of the announced budgets highlight a significant increase in spending that supports multiyear activity growth in key resource basins all over the world. In fact, we expect investments will become even more extensive internationally as the pursuit of supply diversity remains a global priority and gathers greater urgency.<\/p>\n
\n\u201cAnd third, the durability of the current cycle is underscored by the nature of the ongoing investments with the emergence of gas as a long-term energy transition fuel and enabler of energy security, the prominence of long-cycle projects, and the pivot to the Middle East and offshore basins as the anchors of supply growth. Finally, the return of global exploration and appraisal will likely extend this cycle of investment for a number of years.<\/p>\n
\n\u201cTaken together, these market dynamics play to our strengths and create an advantaged position for SLB. Our strategy, global footprint, unique integration capabilities, and portfolio actions have strengthened our ability to support our customers.<\/p>\n
Sequential Revenue Growth and Margin Expansion Ahead<\/b><\/p>\n
\n\u201cLooking ahead to the second quarter, we expect strong growth with seasonal recovery in the Northern Hemisphere, capacity expansion projects in the Middle East that are in various stages of ramp-up, and robust activity in Asia and Sub-Sahara Africa. This growth scenario provides support for broad sequential margin expansion across the Divisions and geographies.<\/p>\n
\n\u201cI am excited about our start to the year, which gives us even further confidence in our full-year 2023 and through-cycle targets. We are laser-focused on execution, supporting our customers, and delivering on our goals for the year.<\/p>\n
\n\u201cI would like to thank our team for delivering these strong results and performing for our customers and stakeholders.\u201d<\/p>\n
Other Events<\/b><\/p>\n
\nDuring the quarter, SLB repurchased approximately 4.4 million shares of its common stock at an average price of $52.65 per share for a total purchase price of $230 million.<\/p>\n
\nOn February 3, 2023, SLB completed the acquisition of Gyrodata Incorporated, a global company specializing in gyroscopic wellbore positioning and survey technology. The transaction incorporates Gyrodata\u2019s wellbore placement and surveying technologies within SLB\u2019s Well Construction business, further enhancing its ability to deliver innovative drilling solutions to customers.<\/p>\n
\nOn April 20, 2023, SLB\u2019s Board of Directors approved a quarterly cash dividend of $0.25 per share of outstanding common stock, payable on July 13, 2023, to stockholders of record on June 7, 2023.<\/p>\n
First-Quarter Revenue by Geographical Area<\/b><\/p>\n\n\n | \n(Stated in millions)<\/td>\n<\/tr>\n |
\n | \nThree Months Ended<\/b><\/td>\n | | \nChange<\/b><\/td>\n<\/tr>\n\n | \nMar. 31,
2023<\/b><\/td>\n | | \nDec. 31,
2022<\/td>\n | | \nMar. 31, 2022<\/td>\n | | \nSequential<\/b><\/td>\n | | \nYear-on-year<\/td>\n<\/tr>\n | \n| North America<\/td>\n | \n $1,698<\/b><\/p>\n<\/td>\n | | \n\n \n$1,633<\/p>\n<\/td>\n | | \n\n \n$1,282<\/p>\n<\/td>\n | | \n\n 4%<\/b><\/p>\n<\/td>\n | | \n\n \n32%<\/p>\n<\/td>\n<\/tr>\n | \n| Latin America<\/td>\n | \n 1,617<\/b><\/p>\n<\/td>\n | | \n\n \n1,619<\/p>\n<\/td>\n | | \n\n \n1,204<\/p>\n<\/td>\n | | \n\n –<\/b><\/p>\n<\/td>\n | | \n\n \n34%<\/p>\n<\/td>\n<\/tr>\n | \n| Europe & Africa<\/td>\n | \n 1,974<\/b><\/p>\n<\/td>\n | | \n\n \n2,067<\/p>\n<\/td>\n | | \n\n \n1,404<\/p>\n<\/td>\n | | \n\n -5%<\/b><\/p>\n<\/td>\n | | \n\n \n41%<\/p>\n<\/td>\n<\/tr>\n | \n| Middle East & Asia<\/td>\n | \n 2,394<\/b><\/p>\n<\/td>\n | | \n\n \n2,508<\/p>\n<\/td>\n | | \n\n \n2,024<\/p>\n<\/td>\n | | \n\n -5%<\/b><\/p>\n<\/td>\n | | \n\n \n18%<\/p>\n<\/td>\n<\/tr>\n | \n| Eliminations & other<\/td>\n | \n 53<\/b><\/p>\n<\/td>\n | | \n\n \n52<\/p>\n<\/td>\n | | \n\n \n48<\/p>\n<\/td>\n | | \n\n n\/m<\/b><\/p>\n<\/td>\n | | \n\n \nn\/m<\/p>\n<\/td>\n<\/tr>\n | \n | \n\n $7,736<\/b><\/p>\n<\/td>\n | | \n\n \n$7,879<\/p>\n<\/td>\n | | \n\n \n$5,962<\/p>\n<\/td>\n | | \n\n -2%<\/b><\/p>\n<\/td>\n | | \n\n \n30%<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| International<\/td>\n | \n $5,985<\/b><\/p>\n<\/td>\n | | \n\n \n$6,194<\/p>\n<\/td>\n | | \n\n \n$4,632<\/p>\n<\/td>\n | | \n\n -3%<\/b><\/p>\n<\/td>\n | | \n\n \n29%<\/p>\n<\/td>\n<\/tr>\n | \n| North America<\/td>\n | \n $1,698<\/b><\/p>\n<\/td>\n | | \n\n \n$1,633<\/p>\n<\/td>\n | | \n\n \n$1,282<\/p>\n<\/td>\n | | \n\n 4%<\/b><\/p>\n<\/td>\n | | \n\n \n32%<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| n\/m = not meaningful<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n<\/table>\nInternational<\/b><\/p>\n \nRevenue in Latin America<\/b> of $1.6 billion increased 34% year on year due to robust drilling activity and improved pricing, higher sales of offshore production systems in Brazil and Guyana, and increased stimulation work in Argentina. Sequentially, revenue was essentially flat as higher drilling activity was offset by reduced APS revenue in Ecuador due to production interruptions.<\/p>\n Europe & Africa<\/b> revenue of $2.0 billion grew 41% year on year primarily from higher sales of production systems in Europe and Scandinavia and increased exploration and production activity offshore Africa. Sequentially, revenue decreased 5% primarily driven by Russia. Excluding Russia, revenue grew 2% sequentially due to higher drilling activity from new projects in Angola, Gabon, and Namibia and increased sales of production systems in Europe.<\/p>\n \nRevenue in the Middle East & Asia<\/b> of $2.4 billion increased 18% year on year due to higher drilling, intervention, and evaluation activity in Saudi Arabia, United Arab Emirates, Qatar, and Oman and across Southeast Asia and Australia. Sequentially, revenue decreased 5% due to seasonally lower activity in Asia, weather-impacted stimulation activity in Saudi Arabia, and reduced sales of production systems across the area following the strong year-end sales in the previous quarter.<\/p>\n North America<\/b><\/p>\n North America<\/b> revenue of $1.7 billion grew 32% year on year due to strong land and offshore drilling and higher sales of production systems. US land revenue increased, driven by Well Construction revenue growth that outperformed the rig count growth, in addition to higher Production Systems revenue. North America offshore revenue grew due to increases in drilling activity, exploration data licensing sales, and sales of subsea production systems in the US Gulf of Mexico. Sequentially, North America revenue increased 4% due to higher land and offshore drilling and increased sales of subsea production systems, which were partially offset by lower APS revenue in Canada. Revenue from both Well Construction and Production Systems grew 9% sequentially.<\/p>\n First-Quarter Results by Division<\/b><\/p>\n Digital & Integration<\/b><\/p>\n\n\n | \n(Stated in millions)<\/td>\n<\/tr>\n | \n | \nThree Months Ended<\/b><\/td>\n | | \nChange<\/b><\/td>\n<\/tr>\n\n | \nMar. 31,
2023<\/b><\/td>\n | | \nDec. 31,
2022<\/td>\n | | \nMar. 31,
2022<\/td>\n | | \nSequential<\/b><\/td>\n | | \nYear-on-year<\/td>\n<\/tr>\n | \n| Revenue<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n \n| International<\/td>\n | \n $642<\/b><\/p>\n<\/td>\n | | \n\n \n$723<\/p>\n<\/td>\n | | \n\n \n$631<\/p>\n<\/td>\n | | \n\n -11%<\/b><\/p>\n<\/td>\n | | \n\n \n2%<\/p>\n<\/td>\n<\/tr>\n | \n| North America<\/td>\n | \n 251<\/b><\/p>\n<\/td>\n | | \n\n \n288<\/p>\n<\/td>\n | | \n\n \n225<\/p>\n<\/td>\n | | \n\n -13%<\/b><\/p>\n<\/td>\n | | \n\n \n11%<\/p>\n<\/td>\n<\/tr>\n | \n| Other<\/td>\n | \n 1<\/b><\/p>\n<\/td>\n | | \n\n \n1<\/p>\n<\/td>\n | | \n\n \n1<\/p>\n<\/td>\n | | \n\n n\/m<\/b><\/p>\n<\/td>\n | | \n\n \nn\/m<\/p>\n<\/td>\n<\/tr>\n | \n | \n\n $894<\/b><\/p>\n<\/td>\n | | \n\n \n$1,012<\/p>\n<\/td>\n | | \n\n \n$857<\/p>\n<\/td>\n | | \n\n -12%<\/b><\/p>\n<\/td>\n | | \n\n \n4%<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n | <\/tr>\n \n| Pretax operating income<\/td>\n | \n $265<\/b><\/p>\n<\/td>\n | | \n\n \n$382<\/p>\n<\/td>\n | | \n\n \n$292<\/p>\n<\/td>\n | | \n\n -31%<\/b><\/p>\n<\/td>\n | | \n\n \n-9%<\/p>\n<\/td>\n<\/tr>\n | \n| Pretax operating margin<\/td>\n | \n 29.6%<\/b><\/p>\n<\/td>\n | | \n\n \n37.7%<\/p>\n<\/td>\n | | \n\n \n34.0%<\/p>\n<\/td>\n | | \n-810 bps<\/b><\/td>\n | | \n-440 bps<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| n\/m = not meaningful<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n<\/table>\n\nDigital & Integration revenue of $894 million increased 4% year on year as a result of continued growth in digital sales and increased exploration data license sales in the US Gulf of Mexico, which were partially offset by lower revenue from APS projects.<\/p>\n \nSequentially, revenue declined 12% due to lower revenue from APS projects and seasonally lower sales of digital and exploration data licenses following strong year-end sales. The APS revenue decline resulted primarily from a temporary production interruption in our projects in Ecuador due to a pipeline disruption. Additionally, lower commodity prices impacted our project in Canada.<\/p>\n \nDigital & Integration pretax operating margin of 30% decreased 440 bps year on year as the continued growth in digital sales was more than offset by lower APS revenue.<\/p>\n \nSequentially, pretax operating margin decreased eight percentage points due to seasonally lower sales of digital and exploration data licenses and lower APS revenue. Pretax operating margin is expected to expand next quarter on higher digital sales and increased revenue from APS projects.<\/p>\n Reservoir Performance<\/b><\/p>\n\n\n | \n(Stated in millions)<\/td>\n<\/tr>\n | \n | \nThree Months Ended<\/b><\/td>\n | | \nChange<\/b><\/td>\n<\/tr>\n\n | \nMar. 31,
2023<\/b><\/td>\n | | \nDec. 31,
2022<\/td>\n | | \nMar. 31,
2022<\/td>\n | | \nSequential<\/b><\/td>\n | | \nYear-on-year<\/td>\n<\/tr>\n | \n| Revenue<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n \n| International<\/td>\n | \n $1,380<\/b><\/p>\n<\/td>\n | | \n\n \n$1,430<\/p>\n<\/td>\n | | \n\n \n$1,105<\/p>\n<\/td>\n | | \n\n -3%<\/b><\/p>\n<\/td>\n | | \n\n \n25%<\/p>\n<\/td>\n<\/tr>\n | \n| North America<\/td>\n | \n 120<\/b><\/p>\n<\/td>\n | | \n\n \n123<\/p>\n<\/td>\n | | \n\n \n103<\/p>\n<\/td>\n | | \n\n -2%<\/b><\/p>\n<\/td>\n | | \n\n \n17%<\/p>\n<\/td>\n<\/tr>\n | \n| Other<\/td>\n | \n 3<\/b><\/p>\n<\/td>\n | | \n\n \n1<\/p>\n<\/td>\n | | \n\n \n2<\/p>\n<\/td>\n | | \n\n n\/m<\/b><\/p>\n<\/td>\n | | \n\n \nn\/m<\/p>\n<\/td>\n<\/tr>\n | \n | \n\n $1,503<\/b><\/p>\n<\/td>\n | | \n\n \n$1,554<\/p>\n<\/td>\n | | \n\n \n$1,210<\/p>\n<\/td>\n | | \n\n -3%<\/b><\/p>\n<\/td>\n | | \n\n \n24%<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Pretax operating income<\/td>\n | \n $242<\/b><\/p>\n<\/td>\n | | \n\n \n$282<\/p>\n<\/td>\n | | \n\n \n$160<\/p>\n<\/td>\n | | \n\n -14%<\/b><\/p>\n<\/td>\n | | \n\n \n52%<\/p>\n<\/td>\n<\/tr>\n | \n| Pretax operating margin<\/td>\n | \n 16.1%<\/b><\/p>\n<\/td>\n | | \n\n \n18.2%<\/p>\n<\/td>\n | | \n\n \n13.2%<\/p>\n<\/td>\n | | \n-207 bps<\/b><\/td>\n | | \n291 bps<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| n\/m = not meaningful<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n<\/table>\n\nReservoir Performance revenue of $1.5 billion grew 24% year on year due to increased intervention, evaluation, and stimulation services across all areas on land and offshore and from both exploration and production activity. More than 30% revenue growth was recorded both in Latin America, mainly from higher intervention activity, and in Europe & Africa, largely from new evaluation and stimulation projects.<\/p>\n \nSequentially, revenue decreased 3% due to seasonal activity reductions in Europe and Asia, weather-impacted activity in the Middle East, and lower revenue in Russia. These declines were partially offset by strong evaluation activity in Latin America, while North America revenue was essentially flat.<\/p>\n \nReservoir Performance pretax operating margin of 16% expanded 291 bps year on year with profitability improving across the international market driven by higher activity and improved pricing across evaluation, intervention, and stimulation.<\/p>\n \nSequentially, pretax operating margin decreased 207 bps due to reduced profitability from the seasonal decline in stimulation activity internationally, primarily in the Northern Hemisphere, which more than offset the strong margin expansion in North America.<\/p>\n Well Construction<\/b><\/p>\n\n\n | \n(Stated in millions)<\/td>\n<\/tr>\n | \n | \nThree Months Ended<\/b><\/td>\n | | \nChange<\/b><\/td>\n<\/tr>\n\n | \nMar. 31,
2023<\/b><\/td>\n | | \nDec. 31,
2022<\/td>\n | | \nMar. 31,
2022<\/td>\n | | \nSequential<\/b><\/td>\n | | \nYear-on-year<\/td>\n<\/tr>\n | \n| Revenue<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n \n| International<\/td>\n | \n $2,493<\/b><\/p>\n<\/td>\n | | \n\n \n$2,522<\/p>\n<\/td>\n | | \n\n \n$1,865<\/p>\n<\/td>\n | | \n\n -1%<\/b><\/p>\n<\/td>\n | | \n\n \n34%<\/p>\n<\/td>\n<\/tr>\n | \n| North America<\/td>\n | \n 711<\/b><\/p>\n<\/td>\n | | \n\n \n652<\/p>\n<\/td>\n | | \n\n \n485<\/p>\n<\/td>\n | | \n\n 9%<\/b><\/p>\n<\/td>\n | | \n\n \n47%<\/p>\n<\/td>\n<\/tr>\n | \n| Other<\/td>\n | \n 57<\/b><\/p>\n<\/td>\n | | \n\n \n55<\/p>\n<\/td>\n | | \n\n \n48<\/p>\n<\/td>\n | | \n\n n\/m<\/b><\/p>\n<\/td>\n | | \n\n \nn\/m<\/p>\n<\/td>\n<\/tr>\n | \n | \n\n $3,261<\/b><\/p>\n<\/td>\n | | \n\n \n$3,229<\/p>\n<\/td>\n | | \n\n \n$2,398<\/p>\n<\/td>\n | | \n\n 1%<\/b><\/p>\n<\/td>\n | | \n\n \n36%<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Pretax operating income<\/td>\n | \n $672<\/b><\/p>\n<\/td>\n | | \n\n \n$679<\/p>\n<\/td>\n | | \n\n \n$388<\/p>\n<\/td>\n | | \n\n -1%<\/b><\/p>\n<\/td>\n | | \n\n \n73%<\/p>\n<\/td>\n<\/tr>\n | \n| Pretax operating margin<\/td>\n | \n 20.6%<\/b><\/p>\n<\/td>\n | | \n\n \n21.0%<\/p>\n<\/td>\n | | \n\n \n16.2%<\/p>\n<\/td>\n | | \n-44 bps<\/b><\/td>\n | | \n444 bps<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| n\/m = not meaningful<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n<\/table>\n\nWell Construction revenue of $3.3 billion increased 36% year on year driven by strong activity and solid pricing improvements led by North America and Latin America, both of which grew more than 45%. Europe & Africa revenue increased 38% while Middle East & Asia revenue grew 24% year on year. Double-digit revenue growth was recorded both on land and offshore in fluids, measurements, integrated well construction, drilling, and equipment sales.<\/p>\n \nSequentially, revenue was slightly higher, driven by increased drilling, measurements, and integrated well construction activity, mainly on land and offshore North America; in Latin America, primarily in Mexico and Brazil; and offshore Africa. These increases were partially offset by lower revenue in Russia and seasonal reductions in Asia.<\/p>\n \nWell Construction pretax operating margin of 21% expanded 444 bps year on year with profitability improving in measurements, integrated drilling, equipment sales, and fluids across most areas driven by higher activity and improved pricing.<\/p>\n \nSequentially, pretax operating margin was essentially flat as improved profitability in Latin America was offset by reduced margin in the Northern Hemisphere due to seasonality.<\/p>\n Production Systems<\/b><\/p>\n\n\n | \n(Stated in millions)<\/td>\n<\/tr>\n | \n | \nThree Months Ended<\/b><\/td>\n | | \nChange<\/b><\/td>\n<\/tr>\n\n | \nMar. 31,
2023<\/b><\/td>\n | | \nDec. 31,
2022<\/td>\n | | \nMar. 31,
2022<\/td>\n | | \nSequential<\/b><\/td>\n | | \nYear-on-year<\/td>\n<\/tr>\n | \n| Revenue<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n \n| International<\/td>\n | \n $1,574<\/b><\/p>\n<\/td>\n | | \n\n \n$1,638<\/p>\n<\/td>\n | | \n\n \n$1,127<\/p>\n<\/td>\n | | \n\n -4%<\/b><\/p>\n<\/td>\n | | \n\n \n40%<\/p>\n<\/td>\n<\/tr>\n | \n| North America<\/td>\n | \n 626<\/b><\/p>\n<\/td>\n | | \n\n \n575<\/p>\n<\/td>\n | | \n\n \n473<\/p>\n<\/td>\n | | \n\n 9%<\/b><\/p>\n<\/td>\n | | \n\n \n32%<\/p>\n<\/td>\n<\/tr>\n | \n| Other<\/td>\n | \n 7<\/b><\/p>\n<\/td>\n | | \n\n \n2<\/p>\n<\/td>\n | | \n\n \n4<\/p>\n<\/td>\n | | \n\n n\/m<\/b><\/p>\n<\/td>\n | | \n\n \nn\/m<\/p>\n<\/td>\n<\/tr>\n | \n | \n\n $2,207<\/b><\/p>\n<\/td>\n | | \n\n \n$2,215<\/p>\n<\/td>\n | | \n\n \n$1,604<\/p>\n<\/td>\n | | \n\n –<\/b><\/p>\n<\/td>\n | | \n\n \n38%<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Pretax operating income<\/td>\n | \n $205<\/b><\/p>\n<\/td>\n | | \n\n \n$238<\/p>\n<\/td>\n | | \n\n \n$114<\/p>\n<\/td>\n | | \n\n -14%<\/b><\/p>\n<\/td>\n | | \n\n \n80%<\/p>\n<\/td>\n<\/tr>\n | \n| Pretax operating margin<\/td>\n | \n 9.3%<\/b><\/p>\n<\/td>\n | | \n\n \n10.8%<\/p>\n<\/td>\n | | \n\n \n7.1%<\/p>\n<\/td>\n | | \n-148 bps<\/b><\/td>\n | | \n217 bps<\/td>\n<\/tr>\n | \n | \n | \n | \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| n\/m = not meaningful<\/td>\n | | \n | \n | \n | \n | \n | \n | \n | \n | <\/tr>\n<\/table>\n\nProduction Systems revenue of $2.2 billion increased 38% year on year driven by strong activity across all areas led by Europe & Africa and Latin America, which grew 63% and 50%, respectively. North America revenue increased 32% while Middle East & Asia revenue grew 11% year on year. Midstream, subsea, artificial lift sales, completions, and valves each recorded double-digit growth across North America and internationally.<\/p>\n \nSequentially, revenue was flat. Strong sales of subsea production systems offshore North America and Trinidad, higher sales of valves in US land, and robust sales of midstream production systems in Europe were offset by lower revenue in the Middle East & Asia and Russia following the strong year-end sales of the previous quarter.<\/p>\n \nProduction Systems pretax operating margin of 9% expanded 217 bps year on year mainly driven by higher artificial lift, surface, and subsea sales and execution efficiency as supply chain and logistics constraints continued to ease.<\/p>\n \nSequentially, pretax operating margin contracted 148 bps as improved profitability from increasing activity, coupled with execution efficiency in North America, was more than offset by reduced margins in Europe & Africa and Asia due to seasonality and activity mix.<\/p>\n Quarterly Highlights<\/b><\/p>\n CORE<\/b><\/p>\n Contract Awards<\/b><\/p>\n \nSLB continues to win new long-cycle contracts for the Core Divisions, particularly in the Middle East and offshore basins. Notable highlights include the following:<\/p>\n \n- \nAramco and SLB signed a nine-year master services agreement in January 2023 for wireline and mud logging services, committing to a long-term partnership in energy innovation with a strong interest in technology development. Multiple unique SLB technologies will be deployed during the execution of the contract, including the Ora\u2122 intelligent wireline formation testing platform, the ThruBit\u2122 through-the-bit logging services, and the ReSOLVE\u2122 instrumented wireline intervention service.<\/p>\n<\/li>\n<\/ul>\n
\n- \nPetrobras and OneSubsea\u00ae<\/sup> entered into an agreement for B\u00fazios 10 engineering, procurement, construction, and installation subsea production system scope. OneSubsea will provide subsea production systems equipment and associated services for four development phases of the deepwater B\u00fazios Field offshore Brazil. The project scope includes 16 fit-for-purpose vertical subsea trees, control systems, and five subsea distribution units, as well as installation, commissioning, and services for the life of the field. The project will be supported by the OneSubsea Brazil Center of Excellence on Subsea Production Systems, which will drive in-country value across both equipment and service scopes. Located in the pre-salt area of the Santos Basin, B\u00fazios is one of the world\u2019s largest deepwater oil fields.<\/p>\n<\/li>\n<\/ul>\n
\n- \nIn a global tender exercise, Shell awarded all three deepwater outcome-based well services scopes of work for bundled well construction and reservoir evaluation services in Brazil, Egypt, and the Crux project in Australia to SLB. The individual scopes of work are planned to commence sequentially between May 2023 and the end of the year.<\/p>\n<\/li>\n<\/ul>\n
\n- \nIn Brazil, PRIO, one of the country\u2019s largest independent oil producers, has awarded OneSubsea the engineering, procurement, and construction contract for a multiphase boosting system to support and accelerate production from the Wahoo-Frade floating production, storage, and offloading tieback, which will be the longest tieback in Brazil. The OneSubsea multiphase pump system was selected based on its proven performance delivering standardized subsea components with a TRL-7 technical readiness level that offer high system reliability and operational flexibility to support reservoir performance for the life of the field. OneSubsea\u2019s selection was also due to its ability to expedite delivery to meet project deadlines.<\/p>\n<\/li>\n<\/ul>\n
\n- \nAlso in Brazil, Enauta has exercised a contract option with OneSubsea for a third multiphase boosting system to be integrated in its Atlanta full-field development. The expansion of the project leveraged the standardization of manufacturing and the project delivery process for both parties, resulting in an earlier delivery, improved logistics, and further consolidation of field activities to lower the overall field lifecycle cost.<\/p>\n<\/li>\n<\/ul>\n
Oil & Gas Decarbonization, New Technology, and Performance<\/b><\/p>\n \nSLB remains focused on developing and implementing technology solutions to deliver higher value with lower carbon emissions. Customers continue to make SLB the partner of choice for maximizing performance across reservoir evaluation, well construction, production, and integrated operations, all while operating more sustainably. Notable highlights include the following:<\/p>\n \n- \nIn the US, intelligent power management, one of the SLB Transition Technologies\u2122 to decarbonize engine-generator (genset) operations, was deployed on a Unit Drilling Company super-spec BOSS rig with three gensets. During 56 consecutive days of rig operation, this automated software leveraged a rapid-response battery energy storage system to reduce total genset runtime by 1,186 hours, conserving 14,332 gallons of diesel fuel consumption while eliminating an associated 147 metric tons of CO2<\/sub>e emissions. The rig provided sufficient power from one genset during tophole drilling, tubular tripping, and various surface activities. This direct digital system runs the active genset at its optimal rating to increase energy efficiency, and the battery safely absorbs harsh transient power spikes, thereby extending genset reliability, all without the need for rig crew intervention.<\/p>\n<\/li>\n<\/ul>\n
\n- \nDuring the quarter, SLB introduced the EcoShield\u2122 geopolymer cement-free system that minimizes the CO2 <\/sub>footprint of a well\u2019s construction. This innovative technology eliminates up to 85% of embodied CO2<\/sub> emissions compared with conventional well cementing systems. The EcoShield system has the potential to avoid up to 5 million metric tons of CO2<\/sub> emissions annually, the equivalent of removing 1.1 million cars from the road each year. The EcoShield system uses locally sourced natural materials and industrial waste streams in its composition, making it a far more sustainable well integrity method. The cement-free system can be deployed throughout various phases of the well life cycle, including abandonment, and across a range of field applications, including in corrosive environments.<\/p>\n<\/li>\n<\/ul>\n
\n- \nAker BP in Norway collaborated with SLB to deploy the Epilogue\u2122 dual-string barrier evaluation on multiple wells to avoid excessive cement remediation. The results from the Epilogue dual-string barrier evaluation and a pressure test validated the presence of a barrier that complied with NORSOK regulations. The Epilogue dual-string barrier evaluation eliminated the need for removing the production tubing before the bond evaluation, thereby saving rig time and providing operational flexibility.<\/p>\n<\/li>\n<\/ul>\n
\n- \nIn Libya, SLB technology and processes enhanced production from the first six wells of a 25-well project for Sarir Oil Operations (SOO). The production enhancement workflow included project assessment, intelligent candidate selection, data processing, hypothesis validation, technology selection, and production enhancement execution. An integrated suite of production logging and pulsed-neutron technologies was deployed to identify sources of water. High-resistance through-tubing bridge plugs and specialized ultra-shear cement were used to shut off the water source in the high-pressure wells. The intervention campaign on these wells resulted in a 400% increase in oil production and reduction in water cut by 60%. The campaign allowed SOO to achieve its production increase objectives and to de-bottleneck produced water, thereby increasing overall field production.<\/p>\n<\/li>\n<\/ul>\n
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