Schlumberger to pull expat managers from Russia
About 20 mid-level and senior managers are said to be pulled
Schlumberger Ltd. (SLB) is withdrawing about twenty of its employees, all US and EU citizens, from Russia amid sanctions, sources have told Bloomberg.
About 20 mid-level and senior managers will be pulled out of the country after Western countries imposed sanctions on Russia’s oil industry.
Exports of some equipment and technology from the US and the EU have been banned as relations with Russia over Crimea and Ukraine have deteriorated. As part of the sanctions, Exxon Mobil Corp. had to suspend some projects with Russia’s OAO Rosneft, threatening a project where the state-run company announced a billion-barrel crude discovery in the Kara Sea last week.
Exploration and production companies were expected to spend $51.7bn in Russia this year, with large part of the spending going to service providers like Schlumberger and Halliburton Co., according to estimates from Barclays Plc. Schlumberger gets 5 percent to 7 percent of its global sales from Russia, according to an August report by RBC Capital Markets. Schlumberger only gets between 5 and 7% of its global sales from Russia, based on figures from an August report by RBC Capital Markets.
“Schlumberger continues to closely monitor the U.S. and EU sanctions and restrictions, and continues to take all steps necessary to ensure compliance with applicable laws,” Alexander Borisov, a Moscow-based Schlumberger spokesman told Bloomberg.
Russia relies on hydraulic fracturing, or fracking, for 25% of its oil production and replacing technology developed by companies like Schlumberger would require “colossal funds,” accoridng to Vagit Alekperov, chief executive officer of OAO Lukoil, Russia’s second-biggest oil producer.
“The biggest engineering companies, like Schlumberger, Halliburton and others, have technology they spent billions of dollars developing,” Alekperov said.
The U.S. and EU announced the latest wave of sanctions this month, targeting the banking, energy and defense industries. They forbid the provision of services such as drilling, well-testing or logging for Russian deep-water, Arctic and shale oil exploration and production.