Oilfield Service Companies: Schlumberger

Schlumberger Limited is the world's largest oilfield services company. Schlumberger employs over 115,000 people  of more than 140 nationalities working in approximately 85 countries. Its principal offices are in Houston, Paris, and the Hague.

History

The headquarters of Schlumberger in Houston

Schlumberger complex in Sugar Land, Texas

Schlumberger was founded in 1926 by French brothers Conrad and Marcel Schlumberger as the Société de prospection électrique (French:Electric Prospecting Company). The company recorded the first-everelectrical resistivity well log inMerkwiller-Pechelbronn, France in 1927. Today Schlumberger supplies thepetroleum industry with services such as seismic acquisition and processing,formation evaluation, well testing and directional drilling, well cementing and stimulation, artificial lift, well completions and consulting, and software and information management. The company is also involved in thegroundwater extraction^[7] and carbon capture and storage industries.^[8]

The brothers had experience conducting geophysical surveys in countries such as Romania, Canada, Serbia, South Africa, the Democratic Republic of the Congo, and the United States. The new company sold electrical-measurement mapping services, and recorded the first-ever electrical resistivity well log in Merkwiller-Pechelbronn, France in 1927. The company quickly expanded, logging its first well in the U.S. in 1929, in Kern County, California. In 1935, the Schlumberger Well Surveying Corporation was founded inHouston, later evolving into Schlumberger Well Services, and finallySchlumberger Wireline & Testing. Schlumberger invested heavily in research, inaugurating the Schlumberger-Doll Research Center in Ridgefield, Connecticut in 1948, contributing to the development of a number of new logging tools. In 1956, Schlumberger Limited was incorporated as aholding company for all Schlumberger businesses, which by now included American testing and production company Johnston Testers.^{[citation needed]}

Over the years, Schlumberger continued to expand its operations and acquisitions. In 1960, Dowell Schlumberger (50% Schlumberger, 50% Dow Chemical), which specialized in pumping services for the oil industry, was formed. In 1962, Schlumberger Limited became listed on the New York Stock Exchange. Schlumberger purchased 50% of Forex in 1964 and merged it with 50% of Languedocienne to create the Neptune Drilling Company. The first computerized reservoir analysis, SARABAND, was introduced in 1970. The remaining 50% of Forex was acquired the following year; Neptune was renamed Forex Neptune Drilling Company. In 1979, Fairchild Camera and Instrument(including Fairchild Semiconductor) became a subsidiary of Schlumberger Limited.

The Schlumberger Gould Research Centre, designed by Michael Hopkins and Partners was opened in 1985.

Schlumberger established the first international data links with e-mail in 1981. In 1983, Schlumberger opened their Cambridge Research Center inCambridge, England and in 2012 it was renamed the Schlumberger Gould Research Center after the company's former CEO Andrew Gould.^[9]

The SEDCO drilling rig company and half of Dowell of North America were acquired in 1984, resulting in the creation of the Anadrill drilling segment, a combination of Dowell and The Analysts' drilling segments. Forex Neptune was merged with SEDCO to create the Sedco Forex Drilling Company the following year, when Schlumberger purchased Merlin and 50% ofGECO.^{[citation needed]}

In the 1970s, its top executives in North America were relocated to New York City.^[10]

In 1987, Schlumberger completed their purchases of Neptune (North America), Bosco and Cori (Italy), and Allmess (Germany). That same year, National Semiconductor acquired Fairchild Semiconductor from Schlumberger for $122 million.^[11] In 1991, Schlumberger acquired PRAKLA-SEISMOS, and pioneered the use of geosteering to plan the drill path in horizontal wells.^{[citation needed]}

Schlumberger acquired software company GeoQuest Systems in 1992. With the purchase came the conversion of SINet to TCP/IP and www capability. In the 1990s Schlumberger bought out the petroleum division, AEG meter, and ECLIPSE reservoir study team Intera Technologies Corp. A joint venture between Schlumberger and Cable & Wirelessresulted with the creation of Omnes, which then handled all of Schlumberger's internal IT business. Oilphase and Camco International were also purchased.^{[citation needed]}

In 1999, Schlumberger and Smith International created a joint venture, M-I L.L.C., the world's largest drilling fluids (or mud) company. The company consists of 60% Smith International, and 40% Schlumberger. Since the joint venture was prohibited by a 1994 antitrust consent decree barring Smith from selling or combining their fluids business with certain other companies, including Schlumberger, the U.S. District Court in Washington, D.C. found Smith International Inc. and Schlumberger Ltd. guilty of criminal contempt and fined each company $750,000 and placed each company on five years probation. Both companies also agreed to pay a total of $13.1 million, representing a full disgorgement of all of the joint venture's profits during the time the companies were in contempt.^[12]

In 2000, the Geco-Prakla division was merged with Western Geophysical to create the seismic contracting companyWesternGeco, of which Schlumberger held a 70% stake, the remaining 30% belonging to competitor Baker Hughes. Sedco Forex was spun off, and merged with Transocean Drilling company in 2000.^{[citation needed]}

In 2001, Schlumberger acquired the IT consultancy company Sema plc for $5.2 billion. The company was an Athens 2004 Summer Olympics partner, but Schlumberger's venture into IT consultancy did not pay off, and divestiture of Sema to Atos Origin was completed that year for $1.5 billion. The Cards division was divested through an IPO to form Axalto, which later merged with Gemplus to form Gemalto, and the Messaging Solutions unit was spun off and merged with Taral Networks to form Airwide Solutions. In 2003, the Automated Test Equipment group, part of the 1979 Fairchild Semiconductor acquisition, was spun off to NPTest Holding, which later sold it toCredence_Systems_Corporation" style="background-image: none; color: rgb(6,69,173); text-decoration: none; background-origin: initial; background-clip: initial" title="Credence Systems Corporation">Credence.^{[citation needed]}

In 2004, Schlumberger Business Consulting was launched. Based in Paris, it is the company's management consultancy arm. ^[13]

In 2005, Schlumberger purchased Waterloo Hydrogeologic,^{[14][unreliable source?]} which was followed by several othergroundwater industry related companies, such as Westbay Instruments, and Van Essen Instruments. Also that year, Schlumberger relocated its U.S. corporate offices from New York to Houston.^[15]

In 2006, Schlumberger purchased the remaining 30% of WesternGeco from Baker Hughes for US$2.4 billion.^{[citation needed]} Also that year, the Schlumberger-Doll Research center was relocated to a newly built research facility in Cambridge, Massachusetts to replace the Ridgefield, Connecticut research center. The new facility joins the other research centers operated by the company in Cambridge, England; Moscow,_Russia" style="background-image: none; color: rgb(6,69,173); text-decoration: none; background-origin: initial; background-clip: initial" title="Moscow, Russia">Moscow, Russia;Stavanger, Norway; and Dhahran, Saudi Arabia.^[16]

In 2010, the acquisition of Smith International in an all stock deal valued at $11.3 billion was announced. The sale price is 45.84-a-share price was 37.5 percent higher than Smith closing price on 18 February 2010. The deal is the biggest acquisition in Schlumberger history.^[17] The merger was completed on August 27, 2010.^[18] Also announced in 2010 were Schlumberger plans to acquire Geoservices, a French-based company specializing in energy services, in a deal valued at $1.1 billion, including debt.^[19]

Environmental record

In 2010, the Aberdeen Sheriff court fined Schlumberger Oilfield UK £300,000 for losing a radioactive source on the rig floor on the Ensco 101 mobile drilling rig in the North Sea for 4 hours.^[20]

In 2009, the state Department of Environmental Protection fined Chesapeake Appalachia LLC and Schlumberger Technology Corp. more than $15,500 each for a hydrochloric acid spill in February 2009 at Chesapeake's Chancellor natural gas well site in Asylum Twp., Bradford County. Officials said the leak did not contaminate groundwater.^[21]

In 2009, Newsweek released their "Green Rankings" ^[22] a ranking of the 500 largest corporations on track records on a number of environmental issues. Schlumberger was ranked 118th out of 500 overall, and 3rd out of 31 in their industry. Newsweek remarked that to mitigate global warming Schlumberger has invested in carbon sequestration which involves long-term storage of CO2 and that the company's seismic survey ships are 20% to 25% more fuel-efficient than those of other seismic contractors from using fuels that emit less pollution and towing equipment that creates less drag on the vessels.^[23]

In 2006, as the current owner of a facility in Pickens, South Carolina, Schlumberger agreed to pay $11.8 million to federal and state agencies for a problem caused by the previous owner, Sangamo-Weston, a capacitor manufacturing plant. The cause of the problem was from polychlorinated biphenyls (PCB) released into the environment by Sangamo-Weston from 1955 to 1987. According to the Justice Department's Environment and Natural Resources Division, an additional agreement by Schlumberger to purchase and remove dams will directly improve the Twelvemile Creek, South Carolina ecosystem and provide significant environmental benefits for the affected communities.^[24]

In 2006, a radioactive canister imported by Schlumberger was recovered in the Western Australian outback desert.^[25] The canister had been lost in November 2005 by the company's transport partner, when the improperly secured container fell off the trailer on which it was being transported.^[26]

Deepwater Horizon

Schlumberger performed wireline logging on the Deepwater Horizon oil rig in the Gulf of Mexico in 2010. A Schlumberger standby crew had been released by BP and left the rig earlier on the same day of the Deepwater Horizon explosion. Schlumberger has not been accused of contributing to the accident.^[27]