Schlumberger: Comprehensive Analysis of a Global Energy Leader

Schlumberger was founded in 1926 by brothers Conrad and Marcel Schlumberger in France, starting with geophysical measurement services for oil exploration. Over the decades, the company's operations expanded to include drilling services, reservoir evaluation, production management, and digital solutions. Today, its headquarters is in Houston, Texas, employing tens of thousands of employees worldwide. Schlumberger is listed on the New York Stock Exchange under the symbol SLB and trades its shares on other global exchanges such as Brazil. The company has evolved through acquisitions and technological innovation to become the largest global provider of oil and gas services, leading in drilling technologies, geological surveying, and management of large oil projects.

Schlumberger offers a comprehensive range of services including drilling operations, reservoir evaluation, petroleum services, production, and digital transformation. The company's activities are divided into main business units: Drilling & Measurements, Reservoir Characterization, Production Solutions, and Digital Solutions. The company increasingly focuses on integrating artificial intelligence, big data, and advanced analytics technologies into its operations. Schlumberger operates in all major oil-producing regions, from North America to the Middle East, Africa, Asia, and Latin America, supporting major national and international oil companies in their exploratory and developmental projects.

Schlumberger plays a pivotal role in the Saudi energy sector, maintaining strategic relationships with Aramco and local oil companies. The company provides drilling services, field evaluations, and advanced engineering solutions for major oil and gas projects in the Kingdom. Schlumberger's partnerships with Aramco are part of the Kingdom's direction towards enhancing local technologies and developing local content in the oil services sector, in line with Vision 2030. Schlumberger also participates in training and qualifying Saudi personnel and developing their capabilities in advanced technologies. The company focuses on supporting deep offshore exploration projects and drilling in remote areas, contributing to the sustainability of national energy production.

Schlumberger continuously seeks innovation in oil and gas services, having launched in 2025 the AI assistant "TILA," a digital platform designed to assist energy sector engineers in analyzing big data, accelerating decision-making processes, and improving drilling and production efficiency. The company relies on artificial intelligence, Internet of Things (IoT) technologies, and digital geological analysis tools to monitor fields and optimize operations. It also forms technological partnerships with global companies to develop advanced exploratory solutions and focuses on digital transformation to achieve greater efficiency in project management and reduce operational costs, giving it a competitive edge in global energy markets.

Schlumberger witnessed significant growth in its revenues and profits during 2024 and 2025. Annual revenues rose to over $36 billion in 2024, with a growth rate of nearly 20% compared to the previous year, accompanied by a net profit increase of over 50%. The stock price on the New York Stock Exchange was approximately $37.5 (equivalent to about 140 Saudi Riyals), while its market value exceeded 2.4 trillion Saudi Riyals ($640 billion). The price-to-earnings (P/E) ratio was around 22 times, and the dividend yield ranged between 0.5% and 1%. The quarterly results for the third and fourth quarters of 2024 showed continued strong performance, with quarterly revenues nearing $9.4 billion and a quarterly net profit of about $1.5 billion. The company possesses strong liquidity and ample cash, enabling it to finance its major projects without the need for extensive borrowing.

Schlumberger's activities belong to the oil and gas services and equipment sector, which is sensitive to fluctuations in oil prices and changes in investments by oil companies in exploration and production. The sector experienced a significant recovery in 2023-2024, supported by rising oil prices and increased global investment spending, particularly in North America and the Middle East. In Saudi Arabia, major oil and gas projects remain a cornerstone of the sustainability of this sector, as Vision 2030 provides opportunities for developing new technologies and enhancing local content. Major companies like Schlumberger face challenges from competition from local suppliers, localization requirements, and the global shift towards clean energy sources. Nevertheless, the sector remains promising due to the Kingdom's vast reserves and long-term contracts with Aramco.

Schlumberger's main competitors in Saudi Arabia include Halliburton, Baker Hughes, and Weatherford, along with local companies supported by Aramco such as Step Engineering. These companies compete in drilling, field evaluation, digital solutions, and production services. The market is also witnessing the entry of tech startups offering digital solutions and artificial intelligence for the energy sector. Aramco is keen to enhance local content and encourage partnerships with local suppliers, which compels global companies like Schlumberger to develop flexible business models and adopt digital innovations to maintain their market share.

Schlumberger recognized early the necessity of digital transformation in the energy sector, investing in the development of AI platforms like TILA, digital analysis tools for oil fields, and the use of big data to improve operational efficiency. These innovations aim to accelerate drilling times, reduce costs, and enhance operational safety. The company also relies on digital solutions for remote monitoring of equipment, optimizing resource allocation, and supporting predictive decision-making. Digital transformation gives Schlumberger a greater capacity to meet the demands of national companies like Aramco and enhances its competitiveness amid the sector's shift towards efficiency and sustainability.

Schlumberger's results for the third and fourth quarters of 2024 showed continued strong momentum in revenues and profits. Quarterly revenues reached approximately $9.4 billion in Q3 2024, with a net profit exceeding $1.5 billion, reflecting a growth rate of over 25% compared to the same period last year. The company continued to achieve high profit margins, supported by improved operational efficiency and increased demand for offshore drilling and digital solutions. Operating cash flows rose to over $6 billion annually, reflecting the strength of its financial position and the ability to fund future investments without increasing debt.

Schlumberger follows a relatively low cash dividend distribution policy compared to some traditional energy companies, with dividend yields ranging between 0.5% and 1% annually. The company prefers to reinvest a significant portion of its profits in developing new technologies, research and development, and financing expansion into emerging markets. Schlumberger pays quarterly dividends (about $0.25 per share), but the recent rise in stock price has made the relative yield lower. This policy reflects the company's focus on long-term growth and financial sustainability, but it may not suit all types of investors.

Schlumberger is directly affected by fluctuations in global oil prices. When prices rise, oil companies increase spending on exploration and production, leading to higher demand for Schlumberger's services. Conversely, declining oil prices prompt companies to cut exploration budgets, reducing demand for its drilling and surveying services. In 2024-2025, the stability of oil prices above $80-90 per barrel helped support Schlumberger's financial results and enhance demand for its technical solutions. The company's ability to adapt to market cycles remains a crucial factor in sustaining its financial performance.

Despite Schlumberger's financial strength and technological leadership, it faces a range of challenges, including fluctuations in oil prices, increasing competition from local and global companies, localization requirements in major markets like Saudi Arabia, and the global shift towards renewable energy sources. The company also faces challenges related to changes in environmental regulations, ongoing digital transformation needs, and profit margin pressures during periods of low demand. Therefore, Schlumberger focuses on diversifying its services, investing in digital technologies, and building strategic partnerships with national oil companies to ensure sustainable growth.

Many investors in the region seek to ensure that company shares comply with Islamic Sharia standards. According to analyses from financial fatwa sites, Schlumberger's stock is classified as non-compliant with Islamic law (100% purification ratio) due to some of its activities being associated with non-compliant sectors. Therefore, investors wishing to adhere to Sharia guidelines should carefully consider this aspect and seek advice from specialists in Islamic investment before making any decisions.

Schlumberger is not listed on the Saudi Tadawul market, but Saudi investors can access its shares through international brokerage firms that allow trading in foreign stocks. International depositary receipts representing the company's shares are available on exchanges such as New York and Brazil (SLB, SLBG34). Before investing, it is essential to review local laws, understand tax implications, and consider the dividend policies for non-U.S. clients. It is always advisable to consult a licensed financial advisor to understand the risks and determine the suitability of the investment for personal financial goals.