Schlumberger has the know-how to get oil and gas drillers out of a slump. One of the world's largest oilfield services companies, it provides a full range of services, including seismic surveys, formation evaluation, drilling technologies and equipment, cementing, well construction and completion, and project management. Schlumberger also provides reservoir evaluation, development, and management services, and is developing new technologies for reservoir optimization. Through its WesternGeco business, the company provides seismic and other surveying services to customers worldwide. In a blockbuster deal valued at $11 billion, Schlumberger acquired drilling services giant Smith International in 2010.
The transaction added Smith International's proprietary drilling services and equipment to Schlumberger's portfolio, giving Schlumberger an even stronger competitive edge, the ability to offer state-of-the-art drilling technology and services. At a time when oil majors are searching for oil and gas in ever more difficult environments, such as in shale gas plays in the US and in deepwater drilling fields worldwide, the addition of Smith's assets further strengthened Schlumberger's position as the world's largest supplier of technology, information services, and integrated project management to the oil and gas industry. As as result of the deal the company operates five business segments: Schlumberger Oilfield Services, WesternGeco, M-I SWACO, Smith Oilfield, and Distribution.
Waiting for the giant Smith purchase to go through did not slow down Schlumberger's acquisitive ways. To expand its portfolio of services, earlier in 2010 the company spent $1 billion to acquire Nexus Geosciences, which delivers integrated seismic software and services for data imaging, modeling, and analysis. That same year, Schlumberger acquired IGEOSS, a developer of structural geology software. IGEOSS applications and expertise were integrated with existing Schlumberger software to provide advanced modeling capabilities, particularly in areas with complex geology.
After two years of slumping oil demand, a reviving global economy and higher commodity prices helped lift the company's revenues and operating income in 2010, especially in the US, where exploration and production activity bounced back strongly.
The Smith and Geosciences purchases, robust oil prices and increased demand for exploration and production support services lifted Schlumberger's revenues in 2011 by 37%, and net income by 17%, as strong oilfield services revenues outstripped the increase in operating expenses.
To raise cash to pay down debt in 2011 the company sold noncore communications and information technology unit Global Connectivity Services to Harris Corporation for $397.5 million. In 2012, to further pay down debt and to become more of a pure play oilfield service provider, Schlumberger sold the Wilson International distribution business (acquired in 2010 as part of the Smith deal) to National Oilwell Varco.
That year, to grow its technology portfolio, the company bought GEDCO, a Canada-based supplier of geophysical survey design software and services. In another move to expand its technology and offer new services, in 2012 Schlumberger created Liquid Robotics Oil & Gas, a 50/50 joint venture with Liquid Robotics. The smaller firm makes Wave Gliders, the world's first and only wave-powered, autonomous marine vehicles. The venture will look for ways that its surfboard-sized vessels can provide offshore oil and gas companies with seismic, underwater, and other types of monitoring.