UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

For the fiscal year ended December 31, 20192021

OR

For the transition period from __________ to __________

Commission File Number 1-4601

Schlumberger N.V.

(Schlumberger Limited)

(Exact name of registrant as specified in its charter)

Registrant’s telephone number in the United States, including area code, is: (713) 513-2000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YESYes ☑ NONo ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YESYes ☐ NONo ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YESYes ☑ NO No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) YESYes ☑ NONo ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☑

As of June 30, 2019,2021, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $54.89$44.72 billion.

As of December 31, 2019,2021, the number of shares of common stock outstanding was 1,384,515,345.

1,403,381,685.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required to be furnished pursuant to Part III of this Form 10-K is set forth in, and is incorporated by reference from, Schlumberger’s definitive proxy statement for its 20202022 Annual General Meeting of Stockholders, to be filed by Schlumberger with the Securities and Exchange Commission (“SEC”) pursuant to Regulation 14A within 120 days after December 31, 20192021 (the “2020“2022 Proxy Statement”).

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SCHLUMBERGER LIMITED

Table of Contents

Form 10-K

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PART I

Item 1. Business.

All references in this report to “Registrant,” “Company,” “Schlumberger,” “we” or “our” are to Schlumberger Limited (Schlumberger N.V., incorporated in Curaçao)) and its consolidated subsidiaries.

Founded in 1926, Schlumberger is a technology company that partners with customers to access energy by providing leading digital solutions and deploying innovative technologies to enable performance and sustainability for the world’s leading providerglobal energy industry.  Schlumberger collaborates to create technology that unlocks access to energy for the benefit of technology for reservoir characterization, drilling, production and processing to the oil and gas industry.  Having invented wireline logging as a technique for obtaining downhole data in oil and gas wells, today Schlumberger supplies the industry’s most comprehensive range of products and services, from exploration through production, and integrated pore-to-pipeline solutions that optimize hydrocarbon recovery to deliver reservoir performance sustainably.  As of December 31, 2019, the Company employed approximately 105,000 people representing over 170 nationalities. Schlumberger, which generates revenue in more than 120 countries, has executive offices in Paris, Houston, London and The Hague.all.

Schlumberger operatesis organized under four Divisions operating in five distinct Basins that are aligned with critical hubs of activity.   These Divisions combine and integrate Schlumberger’s technologies, enhancing our ability to support the emerging long-term growth opportunities in each of the major oilfield service markets through four segments: Reservoir Characterization, Drilling, Production and Cameron.  Each segment consists of a number of technology-based service and product lines, or Technologies.  These Technologies cover the entire life cycle of the reservoir and correspond to a number of markets in which Schlumberger holds leading positions. The role of the Technologies is to support Schlumberger in providing the best possible service to customers and to ensure that Schlumberger remains at the forefront of technology development and services integration.  The Technologies are collectively responsible for driving performance throughout their businesses; overseeing operational processes, resource allocation and personnel; and delivering superior financial results.these market segments.

The segments are as follows:

Reservoir Characterization – Consists of the principal Technologies involved in finding and defining hydrocarbon resources.  These include WesternGeco^®, Wireline, Testing Services, Software Integrated Solutions (“SIS”), OneSurface^® and Integrated Services Management (“ISM”).

four Divisions are:

Digital & Integration – Combines Schlumberger’s digital workflow solutions and seismic data interpretation and management businesses with its integrated offering of Asset Performance Solutions (“APS”).  Through digital solutions and technologies, supported by the future of software, digital, infrastructure, connected assets, and data, this Division enhances efficiency to improve asset and enterprise-wide performance for customers.  APS helps develop or redevelop fields while increasing production, improving cash flow, and extending recovery for customers by providing fit-for-purpose solutions.  

The primary offerings comprising this Division are:

APS creates alignment between Schlumberger and the asset holder and/or the operator utilizing a commercial model whereby Schlumberger receives remuneration in line with the value it creates.  These projects are generally focused on developing and co-managing production of customer assets under long-term agreements.  Schlumberger invests its services and products into the field development activities and operations and is compensated on a fee-per-barrel basis or based on cash flow generated.  This includes certain arrangements whereby Schlumberger is only compensated based on incremental production that it helps deliver above a mutually agreed baseline.  As of December 31, 2021, Schlumberger’s APS portfolio primarily consisted of three field production projects in Ecuador and one in Canada.  

Reservoir Performance – Consists of reservoir-centric technologies and services that are critical to optimizing reservoir productivity and performance. Reservoir Performance develops and deploys innovative technologies and services to evaluate, intervene, and stimulate reservoirs that help customers understand subsurface assets and maximize their value.

The primary offerings comprising this Division are:

On December 31, 2020, Schlumberger contributed its onshore hydraulic fracturing business in the United States and Canada (“OneStim^®”), including its pressure pumping, pumpdown perforating, and Permian frac sand businesses, to Liberty Oilfield Services Inc. (“Liberty”), in exchange for a 37% equity interest in Liberty.  OneStim’s historical results were reported as part of the Reservoir Performance Division through the closing of the transaction.  As of December 31, 2021, Schlumberger had a 31% equity interest in Liberty.

Well Construction – Combines the full portfolio of products and services to optimize well placement and performance, maximize drilling efficiency, and improve wellbore assurance.  Well Construction provides operators and drilling rig manufacturers with services and products related to designing and constructing a well.

The primary offerings comprising this Division are:

Drilling – Consists of the principal Technologies involved in the drilling and positioning of oil and gas wells and comprises Bits & Drilling Tools, M-I SWACO, Drilling & Measurements, Land Rigs and Integrated Drilling Services (“IDS”).

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Production Systems– ConsistsDevelops technologies and provides expertise that enhance production and recovery from subsurface reservoirs to the surface, into pipelines, and to refineries.  Production Systems provides a comprehensive portfolio of the principal Technologies involved in the lifetimeequipment and services including subsurface production of oilsystems, subsea and gas reservoirssurface equipment and includes Well Services, OneStim^®, Completions, Artificial Lift,services, and Asset Performance Solutions (“APS”).midstream production systems.

The primary offerings comprising this Division are:

APS creates alignment between Schlumberger and the asset holder and/or the operator whereby Schlumberger receives remuneration in line with its value creation.  These projects are generally focused on developing and co-managing production of customer assets under long-term agreements.    Schlumberger invests its own services and products, and historically, cash in certain cases, into the field development activities and operations.  Although in certain arrangements Schlumberger is paid for a portion of the services or products it provides, generally Schlumberger will not be paid at the time of providing its services or upon delivery of its products.  Instead, Schlumberger is generally compensated based upon cash flow generated or on a fee-per-barrel basis.  This includes certain arrangements whereby Schlumberger is only compensated based upon incremental production that it helps deliver above a mutually agreed baseline.  APS represented less than 5% of Schlumberger’s consolidated revenue during each of 2019, 2018 and 2017.

Cameron – Consists of the principal Technologies involved in pressure and flow control for drilling and intervention rigs, oil and gas wells and production facilities, and includes OneSubsea^®, Surface Systems, Drilling Systems, and Valves & Process Systems.

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Supporting the TechnologiesDivisions is a global network of research and engineering centers.  Through this organization,these centers Schlumberger is committed to advancedadvances its technology programs thatto safely and sustainably enhance oilfieldindustry efficiency, lower finding and producing costs, improve productivity, maximize reserve recovery and increase asset value while accomplishing these goals invalue.

The Divisions are deployed around a safe and environmentally sound manner.

A network of GeoMarket* regions,geographical structure within each of four major geographic areas of North America, Latin America, Europe/CIS/Africa andfive Basins:  Americas Land, Offshore Atlantic, Middle East & North Africa, Asia, provides logistical, technical and commercial coordination.Russia & Central Asia.  The Basins are configured around common regional characteristics to deploy fit-for-purpose technologies, operating models and skills and are focused on agility, responsiveness and competitiveness.  The Basins are comprised of GeoUnits, which can be a single country or made up of several countries.  With a strong focus on the customers, Basins identify opportunities for local growth.

Corporate Strategy

Schlumberger’s strategy is designed to adapt the Company to an evolving industry landscape shaped by emerging drivers, including capital discipline, regionalization of supply and demand, an efficiency imperative, and resilience—defined by sustainability and lower carbon footprint.  This strategy is designed to magnify Schlumberger’s ability to improve customer performance, which is the differentiating factor that will help our industry meet higher stakeholder expectations.

Oil and gas will remain critical to economic activity and prosperity.  According to the most recent International Energy Agency Sustainable Development Scenario, oil and gas are expected to represent approximately 45% of the global energy mix through 2040.  Schlumberger’s role is twofold: to enable customers to produce these resources efficiently, cost effectively and with the lowest carbon footprint and to support the world’s transition to a more diversified energy mix.

Schlumberger’s strategy is structured around three major themes, all of which are focused on customer performance: (i) strengthen the core; (ii) go-to-market; and (iii) horizons of growth.

Strengthen the Core

The GeoMarket structure offerscore of Schlumberger is how we work with customers a single pointand execute our business.  The elements in this theme—which include customer collaboration, the integrity and efficiency of contact at the local level for fieldour operations, and brings together geographically focused teamscapital stewardship—are enabled by our people and technology.  

As a service company, Schlumberger has always worked closely with customers.  We are exploring new ways to collaborate and help them overcome their challenges and improve performance.

Operations integrity and efficiency—core to Schlumberger’s culture—are enhanced by the digitization of our operations.  Just as Schlumberger is delivering digital solutions to our customers, we are advancing them in our own operations to capture value from our equipment and services businesses by integrating them into our digital structure.

Capital stewardship is a crucial factor for our industry.  Schlumberger has implemented a capital allocation framework that governs all investments, whether related to capital expenditures, mergers and acquisitions, or research and engineering.  The underlying principle behind this framework is that investment opportunities are prioritized based on returns and cash flow.  Our focus on capital stewardship also includes evolving certain businesses into innovative, less capital-intensive commercial models.

Go-to-Market

Industry markets have evolved into multiple, diverse regional markets that are increasingly competing with each other to meet localglobal, regional, and domestic oil and gas demand.  Each of these regions has a set of resource plays—or basins—with localized economics and operational drivers.  As a result, the industry is witnessing a decoupling of the activity characteristics of each major region, resulting in a unique set of dynamics for each oil and gas basin across the world.  This presents Schlumberger with opportunities that can be optimally addressed with a basin-specific approach.

A key differentiator for Schlumberger is its “fit-for-basin” approach and ability.  Fit-for-basin describes the mindset Schlumberger has adopted toward technology development, in-country value, and market access. Schlumberger is developing and deploying basin-specific technology that helps its customers overcome the challenges of their respective regions.  At the same time, in-country value enables regional efficiency and performance, while creating opportunity and aligning with the strategic priorities of our clients.  

In addition, technology access and performance models are highly strategic elements of our go-to-market strategy.  Technology access is fundamentally about making the right decisions with respect to our technology portfolio and how we go to market.  Performance models are focused on commercial and contractual innovations.  

The elements of our go-to-market strategy enable Schlumberger to develop deeper partnerships with customers, expanding on their needs and challenges from a basin-specific perspective to provide technology and business models tailored to regional or individual customer requirements. These elements allow us to share in the performance improvement we deliver customized solutions.  for customers and partners.

Horizons of Growth

The GeoMarketsthird strategic element positions Schlumberger to increase its share in existing markets and expand into new long-term markets in digital, production and recovery, and energy transition, including Schlumberger New Energy and Transition Technologies.

Digital capabilities are responsible for providingcrucial to long-term performance and resilience.  Through its industry-leading digital platform, Schlumberger will enable digital transformation at scale, unlocking significant value, and leading innovation across the digital domain in the industry.

Schlumberger seeks to define the future of digital technology in the energy industry and has designed and built a secure and flexible digital industry platform centered around differentiated digital technologies.  Enabled by key partnerships with companies such as Google, IBM, Microsoft, Amazon Web Services, AVEVA and NOV, Schlumberger provides an open digital platform that takes advantage of on-demand, high-performance computing and makes digital capabilities such as embedded artificial intelligence or machine learning readily accessible to customers.

The application of digital technology across the entire E&P value chain—from subsurface to drilling to production—has the potential to deliver a step-change in operational workflows that will significantly elevate our customers’ performance sustainably. Digital technology can move technical workflows from the desktop to the cloud, creating data structures that enable artificial intelligence and machine learning to provide insights at scale across our customers’ operations.

Production and recovery is about positioning Schlumberger to take advantage of two key trends shaping the market.  The first trend relates to accelerating gas discovery, development and production, as Schlumberger expects to see significant growth in gas demand over the next two decades as the world seeks to decarbonize its energy mix.  The second trend relates to operators’ increased focus on improving recovery from their existing wells, fields and infrastructure—ultimately achieving the most capital efficient production.  As a result and cost-effective support possiblebased on our deep domain knowledge from the subsurface to midstream production facilities, we are positioning our technology portfolio to participate and lead in these growing markets.

Finally, Schlumberger recognizes that its future will expand beyond oil and gas with energy transition, and the Company is positioning itself for long-term growth opportunities.  In this regard, in 2020 the Company created Schlumberger New Energy to develop businesses in low-carbon or carbon-neutral energy technologies, and in 2021 it announced its commitment to reach net-zero emissions by 2050 and launched its Transition Technologies portfolio to reduce emissions from oil and gas operations.  

Schlumberger New Energy is using partnership models and Schlumberger’s experience in technology industrialization to expand into energy verticals beyond oil and gas.  Schlumberger’s approach is to apply its domain expertise in areas adjacent to its existing activities where it can use its global footprint and execution platform to deliver at scale.

The Schlumberger New Energy portfolio consists of ventures in the domains of hydrogen, lithium, energy storage, carbon capture and sequestration (“CCS”), geothermal power and geoenergy for heating and cooling buildings.   While many of these investments are in new energy emerging sectors, Schlumberger New Energy has leveraged Schlumberger’s extensive experience in both the CCS and geothermal sectors.  For more than two decades, Schlumberger has participated in CCS projects providing consulting, technology services and project management.  In geothermal, Schlumberger provides the full spectrum of geothermal resource development services through GeothermEx, a consulting and services company we acquired in 2010.  Schlumberger New Energy has extended Schlumberger’s geothermal reach by exploring opportunities in the development of geothermal power projects.

Schlumberger New Energy activities currently include the following ventures and strategic partnerships:

In June 2021, Schlumberger announced its commitment to achieve net-zero greenhouse gas (“GHG”) emissions by 2050.  Guided by climate science and GHG Protocol, Schlumberger spent 18 months conducting extensive analysis and working with experts to produce its decarbonization plan, which is aligned with the Paris Agreement ambition of limiting global warming to 1.5 degrees Celsius.  Schlumberger was the first energy services company to set a net-zero target inclusive of all three emission scopes. By setting targets with respect to the operations.Company’s total 2019 baseline GHG footprint of approximately 54 million metric tons of CO₂ equivalent (which consisted of 52 million metric tons of Scope 3 emissions and two million metric tons of Scope 1 and Scope 2 emissions), and not just its Scope 1 and 2 footprint, Schlumberger’s comprehensive emissions reduction roadmap addresses the entire oil and gas value chain.

Schlumberger’s 2050 net zero target is supported by the following interim milestones, using 2019 as the baseline year:

There are three key components to Schlumberger achieving its net-zero target: reducing operational emissions, reducing customer emissions that occur while using Schlumberger technology, and taking carbon-negative actions of sufficient scale to offset any residual operational and technology emissions that the Company may have in 2050.

Schlumberger’s Scope 1 and 2 emissions primarily come from its fuel use and electricity consumption, whereas its Scope 3 emissions are indirect, such as customer emissions related to the use of Schlumberger technology and operational emissions related to purchased goods and services. In 2021, Schlumberger launched its Transition Technologies portfolio.  This portfolio is focused on addressing fugitive emissions, flaring reduction, electrification, well construction emissions, and full field development solutions.  Comprised of proprietary technologies and solutions, the Transition Technologies portfolio will help reduce direct and indirect emissions along with other environmental attributes, while simultaneously driving efficiency, reliability and performance for our customers.

Human Capital

At December 31, 2021, Schlumberger’s workforce consisted of approximately 92,000 people representing more than 160 nationalities.

Schlumberger primarily usesbelieves that the diversity of its own personnelworkforce is one of its greatest strengths and its ambition is to marketmaintain a workforce nationality mix that is aligned to its offerings.  The customer base, business risksgeographical revenue mix.  

Schlumberger recognizes that its ability to attract, develop, motivate and retain a highly competent and diverse workforce has been key to its success for many decades.  As a global company focused on creating and optimizing value for its customers, Schlumberger believes it is critical for its people to communicate with customers in their native languages and to share the values of the people in the countries where it works.  Furthermore, Schlumberger’s diverse workforce positions the Company to effectively deliver services and products that meet the unique expectations and requirements of, its stakeholders, including customers, suppliers and shareholders.  Schlumberger’s long-standing commitment to national and cultural diversity fosters a culture that is global in outlook, yet local in practice, which permeates every layer of the Company.

In addition to national and cultural diversity, gender balance is another important pillar of our diversity and inclusion strategy.  Schlumberger is committed to lead our industry in gender diversity.    Schlumberger has made significant progress towards achieving its gender balance goal of having women comprise 25% of the Company’s salaried workforce by 2025.  In this regard, in 2021, Schlumberger set its next goal which is for women to comprise 30% of the Company’s salaried workforce by 2030.  As of December 31, 2021, women made up approximately 23% of the Company’s salaried workforce.  Additionally, approximately 22% of management roles were held by women in 2021 and women represented approximately 48% of our 2021 new hires of salaried employees with science, technology, engineering and mathematics backgrounds.

Schlumberger is proud to provide a career platform that enables a culture of lifelong learning for all employees. Schlumberger is committed to offering borderless careers and making career decisions based on merit.  Schlumberger’s borderless careers philosophy is powered by its internal mobility practices, which offer employees multiple, flexible, career paths to help them acquire the required skills to reach their ambition. We seek to provide continuous growth opportunities through a combination of training and experience. Schlumberger strives to identify talent early and to provide opportunities for growth are essentially uniform across all servicesthose employees who demonstrate exceptional performance and products.  Manufacturing and engineering facilities as well as research centers are shared,potential to progress to higher levels within the organization. These opportunities accelerate career development while fostering an agile workforce and the labor force,next generation of business leaders.

Competition

The principal methods of competition within certain limitations, is interchangeable.  Technologicalthe energy services industry are technological innovation, quality of service and price differentiation are the principal methods of competition, whichdifferentiation.  These factors vary geographically with respect toand are dependent upon the different services and products offered.  Whilethat Schlumberger offers.  Schlumberger has numerous competitors, both large and small, Schlumberger believes it is an industry leader in providing wireline logging, well production testing, exploration and production software, rig equipment, surface equipment, artificial lift, hydraulic fracturing, cementing, coiled-tubing services, drilling and completion fluids, solids control and waste management, drilling pressure control, drill bits, measurement-while-drilling, logging-while-drilling, directional-drilling services, and surface data (mud) logging.small.

* Mark of Schlumberger

GENERAL

Intellectual Property

Schlumberger owns and controls a variety of intellectual property, including but not limited to patents, proprietary information, trade secrets and software tools and applications that, in the aggregate, are material to Schlumberger’s business.  While Schlumberger seeks and holds numerous patents covering various products and processes, no particular patent or group of patents is material to Schlumberger’s business.

Seasonality

Seasonal changes in weather and significant weather events can temporarily affect the delivery of oilfieldSchlumberger’s products and services.  For example, the spring thaw in Canada and consequent road restrictions can affect activity levels, while the winter months in the North Sea, Russia and China can produce severe weather conditions that can temporarily reduce levels of activity.  In addition, hurricanes and typhoons can disrupt coastal and offshore operations.  Furthermore, customer spending patterns for multiclient data, software and other oilfield services and products may result in higher activity in the fourth quarter of eachthe year as clients seek to fully utilize their annual budgets.  Conversely, customer budget constraints in North America may lead to lower demand for our services and products in the fourth quarter of eachthe year.

Customers

Schlumberger’s primary customers are national oil companies, large integrated oil companies and Backlog of Orders

For the year ended December 31, 2019, noindependent operators. No single customer exceeded 10% of Schlumberger’s consolidated revenue. Other than the OneSubsea, Drilling Systems and WesternGeco businesses, Schlumberger has no significant backlog due to the nature of its businesses.  The combined backlog of these businesses was $3.0 billion at December 31, 2019 (of which approximately 50% is expected to be recognized as revenue during 2020)each of 2021, 2020 and $2.7 billion at December 31, 2018.2019.

5Governmental Regulations

Information About Our Executive OfficersSchlumberger is subject to numerous environmental and other governmental and regulatory requirements related to its operations worldwide. For additional details, see “Item 1(a). Risk Factors – Legal and Regulatory Risks”, which is incorporated by reference in this Item 1.

Corporate Information

Schlumberger was founded in 1926.  The following table sets forth, asCompany is incorporated under the laws of January 21, 2020, the namesCuraçao and ages of thehas executive officers of Schlumberger, including all offices in Paris, Houston, London and positions held by each for the past five years.

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The Hague.

Available Information

The Schlumberger website is www.slb.com.  Schlumberger uses its Investor Relations website, www.slb.com/ir, as a routine channel for distribution of important information, including news releases, analyst presentations, and financial information.  Schlumberger makes available free of charge through its Investor Relations website at www.slb.com/ir, access to its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, and amendments to each of those reports, as soon as reasonably practicable after such material is filed with or furnished to the SEC.  Alternatively, you may access these reports at the SEC’s website at www.sec.gov.  Copies are also available, without charge, from Schlumberger Investor Relations, 5599 San Felipe, 17^th Floor, Houston, Texas 77056.  Unless expressly noted, the information on ourits website or any other website is not incorporated by reference in this Form 10-K and should not be considered part of this Form 10-K or any other filing Schlumberger makes with the SEC.

Information About Our Executive Officers

The following table sets forth, as of January 26, 2022, the names and ages of the executive officers of Schlumberger, including all offices and positions held by each for the past five years.

Item 1A. Risk Factors.

The following discussion of risk factors known to us contains important information for the understanding of our “forward-looking statements,” which are discussed immediately following Item 7A. of this Form 10-K and elsewhere.  These risk factors should also be read in conjunction with Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related notes included in this Form 10-K.

We urge you to consider carefully the risks described below, which discuss the material factors that make an investment in our securities speculative or risky, as well as in other reports and materials that we file with the SEC and the other information included or incorporated by reference in this Form 10-K.  Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also materially adversely affect our business, reputation, financial condition, results of operations, cash flows and prospects.

Business and Operational Risks

Demand for our products and services is substantially dependent on the levels of expenditures by our customers.  The recentRecent oil and gas industry downturn has (and current market conditions have)downturns have resulted in reduced demand for oilfield products and services and lower expenditures by our customers, which havehas in the past had, and may in the future have, a material adverse impacteffect on our financial condition, results of operations and cash flows.

Demand for our products and services depends substantially on expenditures by our customers for the exploration, development and production of oil and natural gas reserves.  These expenditures are generally dependent on our customers’ views of future oil and natural gas prices and are sensitive to our customers’ views of future economic growth and the resulting impact on demand for oil and natural gas.  

Declines,gas and future oil and gas prices, as well as our customers’ ability to access capital.  In addition, the transition of the global energy sector from primarily a fossil fuel-based system to renewable energy sources could affect our customers’ levels of expenditures.

Actual and anticipated declines in oil and gas prices have in the past resulted in, and may in the future result in, lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us.  These effects have had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.

Historically, oil and natural gas prices have experienced significant volatility and can be affected by a variety of factors, including:

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There can be no assurance that the demand or pricing for oil and natural gas or for our products and services will follow historic patterns or recover meaningfully in the near term.  The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward pressure on the prices that we are able to charge.  Sustained market uncertainty can also result in lower demand and pricing for our products and services.  A futuresignificant industry downturn, or sustained market uncertainty, or increased availability of economical alternative energy sourcescould again result in a reduction in demand for oilfieldour products and services, andwhich could have a material adverse effect onadversely affect our business, financial condition, results of operations, cash flows and prospects.

A significant portionDisruptions in the political, regulatory, economic, and social environments of our revenue is derived from our non-United States operations, which exposes us to risks inherent in doing business in each of the over 120 countries in which we operate.operate could adversely affect our financial condition, results of operations and cash flows.

We generate revenue in more than 120 countries across the world.  Our non-United Statesnon-US operations accounted for approximately 72%85% of our consolidated revenue in 2019, 68%2021, 81% in 20182020 and 74%72% in 2017.  In addition2019.  Instability and unforeseen changes in any of the markets in which we operate could result in business disruptions that may have an adverse effect on the demand for our products and services or our financial condition, results of operations or cash flows. These factors include, but are not limited to, the risks addressed elsewhere in this section, our operations in countries other than the United States are subject to various risks, including:following:

Failure to effectively and timely address the energy transition could adversely affect our business, results of operations and cash flows.

Our failurelong-term success depends on our ability to effectively address the energy transition, which will require adapting our technology portfolio to potentially changing government requirements and customer preferences, as well as engaging with our customers to develop solutions to decarbonize oil and gas operations. If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our products and services could be adversely affected. Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.

We operate in a highly competitive environment.  If we are unable to maintain technology leadership, this could adversely affect any competitive advantage we hold.

The energy industry is highly competitive.  Our business may be adversely affected if we fail to continue developing and producing innovative technologies in response to changes in the market, including customer and government requirements, or if we fail to deliver such technologies to our customers in a timely and cost-competitive manner.  If we are unable to maintain technology leadership in our industry, our ability to maintain market share, defend, maintain or increase prices for our products and services, and negotiate acceptable contract terms with our customers could be adversely affected.  Furthermore, if competing technology accelerates the obsolescence of any of our products or services, the value of our intellectual property may be reduced, which could adversely affect our financial condition, results of operations and cash flows.

Limitations on our ability to obtain, maintain, protect or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.

There can be no assurance that the steps we take to obtain, maintain, protect and enforce our intellectual property rights will be adequate.  Some of our products or services, and the processes we use to produce or provide them, have been granted patent protection, have patent applications pending, or are trade secrets.  Our business may be adversely affected when our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our patent applications are denied, or our trade secrets are not adequately protected.  Patent protection on some types of technology, such as software or machine learning processes, may not be available in certain countries in which we operate.  Our competitors may also be able to develop technology independently that is similar to ours without infringing on our patents or gaining access to our trade secrets, which could adversely affect our financial condition, results of operations and cash flows.

Third parties may claim that we have infringed upon or otherwise violated their intellectual property rights.

The tools, techniques, methodologies, programs and components we use to provide our services and products may infringe upon or otherwise violate the intellectual property rights of others or be challenged on that basis.  Regardless of the merits, any such claims generally result in significant legal and other costs, including reputational harm, and may distract management from running our business.  Resolving such claims could increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies.  If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product, which could adversely affect our financial condition, results of operations and cash flows.

Legal and Regulatory Risks

Our operations require us to comply with complex US and foreignnumerous laws and regulations, violations of which could have a material adverse effect on our financial condition, results of operations or financial condition.cash flows.

WeOur operations are subject to international, regional, national, and local laws and regulations in every place where we operate, relating to matters such as environmental protection, health and safety, labor and employment, import/export controls, currency exchange, bribery and corruption, data privacy and cybersecurity, intellectual property, immigration, and taxation.  These laws and regulations are complex, USfrequently change, and foreignhave tended to become more stringent over time.  In the event the scope of these laws and regulations expands in the future, the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash flows.

Our operations are subject to anti-corruption and anti-bribery laws and regulations, such as the FCPA,Foreign Corrupt Practices Act, the U.K. Bribery Act and various other anti-bribery and anti-corruptionsimilar laws.  We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons.  Our ability to transfer people, products and data among certain countries is subject to maintaining required licenses and complying with these laws and regulations.

The internal controls, policies and procedures, and employee training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations.  Any determination that we have violated or are responsible for violations of anti-bribery, trade control, trade sanctions or anti-corruption laws could have a material adverse effect on our financial condition.  Violations of international and US laws and regulations or the loss of any required licenses may result in fines and penalties, criminal sanctions, administrative remedies or restrictions on business conduct, and could have a material adverse effect on our reputation and our business, operating resultsoperations and financial condition.  In addition, any major violations could have a significant effect on our reputation and consequently on our ability to win future business and maintain existing customer and supplier relationships.

8Existing or future laws, regulations, court orders or other initiatives to limit greenhouse gas emissions or relating to climate change may reduce demand for our products and services.

DemandContinuing political and social attention to the issue of climate change has resulted in both existing and proposed international agreements and national, regional and local legislation and regulatory measures to limit GHG emissions. The implementation of these agreements, including the Paris Agreement, the Europe Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, could be reducedimpose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.

In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by existingpublic and future legislation, regulationsprivate entities against oil and public sentiment.gas companies in connection with their GHG emissions.  As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring mitigation of the effects of climate change.  

Environmental advocacy groupsThere is also increased focus by governments and regulatory agencies in the European Union, the United Statesour customers, investors and other regionsstakeholders on climate change, sustainability and energy transition matters. Negative attitudes toward or countries have been focusing considerable attention on the emissionsperceptions of carbon dioxide, methane and other greenhouse gasesour industry or fossil fuel products and their potential role in climate change.  Existing or future legislationrelationship to the environment have led governments, non-governmental organizations, and regulations relatedcompanies to greenhouse gas emissions and climate change, as well as governmentimplement initiatives to conserve energy orand promote the use of alternative energy sources, which may significantly curtailreduce the demand for and production of fossil fuels such as oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services.  ThisIn addition, initiatives by investors and financial institutions to limit funding to companies in fossil fuel-related industries may adversely affect our liquidity or access to capital. Any of these initiatives may, in turn, adversely affect our financial condition, results of operations and cash flows.

New or additional legal or regulatory requirements regarding climate change could adversely affect our business, reputation or demand for our stock.  There is also increased focus, including by governmental and non-governmental organizations, investors and other stakeholders, on these and other sustainability matters.  Additionally, some international, national, state and local governments and agencies have adopted laws and regulations or are evaluating proposed legislation and regulations that are focused on the extraction of shale gas or oil using hydraulic fracturing. Future hydraulic fracturing-related legislation or regulations could limit or ban hydraulic fracturing, or lead to operational delays and increased costs, and therefore reduce demand for our pressure pumping services.  Enactment of additional international, national, state or local legislation or regulations can adversely affect our financial condition, results of operations and cash flows and could be material.

Environmental compliance costs and liabilities arising as a result of environmental laws and regulations could reducehave a material adverse effect on our earningsbusiness, financial condition and cash available forresults of operations.

We are subject to increasingly stringentnumerous laws and regulations relating to environmental protection, including those governing air and GHG emissions, water discharges and waste management, as well as the importation and use of hazardous materials, radioactive materials, chemicals and explosives and to environmental protection, including laws and regulations governing air emissions, hydraulic fracturing, water discharges and waste management. We incur, and expect to continue to incur, significant capital and operating costs to comply with environmental laws and regulations.explosives.  The technical requirements of these laws and regulations are becoming increasingly complex, stringent and expensive to implement.  These laws maysometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety.  Strict liability can render us liable for damages without regard to our degree of care or fault.  Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others.

We use and generate hazardous substances and wastes in our operations.  In addition, many of our current and former properties are, or have been, used for industrial purposes.  Accordingly, we could become subject to material liabilities relating to the investigation

and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as thea result of exposures to, or releases of, hazardous substances.  In addition, stricter enforcement or changing interpretations of existing laws and regulations, the enactment of new laws and regulations, the discovery of previously unknown contamination or the imposition of new or increased requirements could require us to incur costs or become the basis for new or increased liabilities that could reducehave a material adverse effect on our earningsbusiness, operations and our cash available for operations.financial condition.

We could be subject to substantial liability claims, including catastrophicas a result of well incidents, which could adversely affect our reputation, financial condition, results of operations and cash flows.

The technical complexities of our operations expose us to a wide range of significant health, safety and environmental risks.  Our operations involve production-related activities, radioactive materials, chemicals, explosives and other equipment and services that are deployed in challenging exploration, development and production environments.  Accidents or acts of malfeasance involving these services or equipment, or a failure of a product (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations, which could materially adversely affect us.  Any catastrophic well incidents, including blowouts at a well site or any loss of containment or well control, may expose us to additional liabilities, which could be material.  Generally, we rely on contractual indemnities, releases, and limitations on liability with our customers and insurance to protect us from potential liability related to such events.  However, our insurance may not protect us against liability for certain kinds of events, including events involving pollution, or against losses resulting from business interruption.  Moreover, we may not be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate.  Any damages caused by our services or products that are not covered by insurance or are in excess of policy limits or subject to substantial deductibles, could adversely affect our financial condition, results of operations and cash flows.

If we are unable to maintain technology leadership, this could adversely affect any competitive advantage we hold.General Risk Factors

The oilfield service industry is highly competitive.  Our ability to continually provide competitive technologyCOVID-19 pandemic and services can impact our ability to defend, maintain or increase prices for our productsresulting adverse economic conditions have had, and services, maintain market share, and negotiate acceptable contract terms with our customers.  Failuremay to continue to develop and produce competitive technology or deliver it to our clients inhave, a timely and cost-competitive manner in the various markets we serve, could adversely affectmaterial adverse effect on our financial condition, results of operations and cash flows.

LimitationsThe COVID-19 pandemic caused a significant and swift reduction in global economic activity during 2020, which significantly weakened demand for oil and gas, and in turn, for our products and services.  Other effects of the pandemic included, and may continue to include, significant volatility and disruption of the global financial markets; adverse revenue and net income effects; disruptions to our operations, including suspension or deferral of drilling activities; customer shutdowns of oil and gas exploration and production; downward revisions to customer budgets; limitations on access to sources of liquidity; supply chain disruptions; limitations on access to raw materials; employee impacts from illness, school closures and other community response measures; and temporary closures of our facilities or the facilities of our customers and suppliers.  The pandemic is continuously evolving, and the extent to which our operating and financial results will continue to be affected will depend on various factors beyond our control, such as the ultimate duration, severity and sustained geographic resurgence of the virus; the emergence of new variants and strains of the virus; and the success of actions to contain the virus and its variants, or treat its impact, such as the availability and acceptance of vaccines.  COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate our other risk factors described in this Form 10-K.

Our operations are subject to cyber incidents that could have a material adverse effect on our business, financial condition and results of operations.

We are highly dependent on digital technologies and services to conduct our business.  We use these technologies for internal purposes, including data storage, processing and transmission, as well as in our interactions with our business associates, such as customers and suppliers.  In addition, we develop software and other digital products and services that store, retrieve, manipulate and manage our customers’ information and data, external data, personal data, and our own data.  Our digital technologies and services, and those of our business associates, are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner.  There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur.  We have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from phishing emails and ransomware infections.  Even if we successfully defend our own digital technologies and services, we also rely on third-party business associates, with whom we may share data and services, to defend their digital technologies and services against attack.  

We could suffer significant damage to our reputation if a cyber incident or attack were to allow unauthorized access to or modification of our customers’ data, other external data, personal data, or our own data, or if the services we provide to our customers were disrupted, or if our digital products or services were reported to have or were perceived as having security vulnerabilities.  This could lead to fewer customers using our digital products and services, which could have a material adverse impact on our financial condition and results of operations.  In addition, if our systems, or our third-party business associates’ systems, for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; breach of personal data; interruption of our business operations; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to

prevent, respond to, or mitigate cybersecurity attacks.  These risks could harm our reputation and our relationships with our employees, business associates and other third parties, and may result in claims against us.  The occurrence of any of these risks could have a material adverse effect on our business, financial condition and results of operations.

Our aspirations, goals, and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.

We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our net-zero target and our energy transition strategy.  Statements related to these goals, targets and objectives reflect our current plans and do not constitute a guarantee that they will be achieved.  Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial, legal, and other risks.  Our ability to achieve any stated goal, target, or objective, including with respect to emissions reduction, is subject to numerous factors and conditions, some of which are outside of our control.  

Our business may face increased scrutiny from investors and other stakeholders related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. ��If our sustainability practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, our reputation, our ability to protectattract or retain employees, and our intellectual property rights, includingattractiveness as an investment or business partner could be negatively affected.  Similarly, our trade secrets, could cause a loss in revenuefailure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and any competitive advantageobjectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we hold.

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Some of our productsannounce, or services, and the processes we use to produce or provide them, have been granted patent protection, have patent applications pending, or are trade secrets. Our business may be adversely affected when our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our patent applications are denied or our trade secrets are not adequately protected. Our competitors may be able to develop technology independently that is similar to ours without infringing on our patents or gaining access to our trade secrets, whichat all, could adversely affect our financial condition, results of operationsbusiness or reputation, as well as expose us to government enforcement actions and cash flows.

Third parties may claim that we have infringed upon their intellectual property rights.

The tools, techniques, methodologies, programs and components we use to provide our services and products may infringe upon the intellectual property rights of others. Infringement claims generally result in significant legal and other costs, and may distract management from running our business. Royalty payments under licenses from third parties, if available, would increase our costs. If a license were not available, we might not be able to continue providing a particular service or product, which could adversely affect our financial condition, results of operations and cash flows.  Additionally, developing non-infringing technologies would increase our costs.private litigation.  

Failure to obtainattract and retain skilled technicalqualified personnel could impede our operations.

Our future success depends on our ability to recruit, train, and retain qualified personnel.  We require highly skilled personnel to operate and provide technical services and support for our business.  Competition for the personnel requirednecessary for our businesses intensifies as activity increases and technology evolves.  In periods of high utilization, it is often more difficult to find and retain qualified individuals.  This could increase our costs or have other material adverse effects on our operations.

Severe weather, including extreme weather conditions associated with climate change, has in the past and may in the future adversely affect our operations.operations and financial results.

Our business has been, and in the future will be, affected by severe weather in areas where we operate, which could materially impactaffect our operations and financial results  Thisresults.  Extreme weather conditions such as hurricanes, flooding and landslides have in the past resulted in, and may entailin the future result in, the evacuation of personnel, and stoppage of services. In addition, particularlyservices and activity disruptions at our facilities, in our supply chain, or at well-sites, or result in disruptions of our customers’ operations.  Particularly severe weather affectsevents affecting platforms or structures which may result in a suspension of activities.  In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall and hurricane-strength winds may damage our facilities.  Any of thesesuch extreme weather events may result in increased operating costs or decreases in revenue, which could adversely affect our financial condition, results of operations and cash flows.

Cyberattacks could have a material adverse impact on our business and results of operation.

We rely heavily on information systems to conduct our business, including systems operated by or under the control of third parties.  Although we devote significant resources to protect our systems and proprietary data, we have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business. There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur.  Breaches or circumvention of our systems, or the systems of third parties, including by ransomware or other attacks,  result in disruptions to our business operations; unauthorized access to (or the loss of Company access to) competitively sensitive, confidential or other critical data or systems; loss of customers; financial losses; regulatory fines; and misuse or corruption of critical data and proprietary information, any of which could be material.

Item 1B.  Unresolved Staff Comments.

None.

Item 2.  Properties.

Schlumberger owns or leases numerous manufacturing facilities, administrative offices, service centers, research centers, data processing centers, mines, and other facilities throughout the world, none of which are individually material.

Item 3.  Legal Proceedings.

The information with respect to this Item 3. Legal Proceedings is set forth in Note 15 of14 – Contingencies, in the accompanying Consolidated Financial Statements.

Item 4.  Mine Safety Disclosures.

Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-K.

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PART II

Item 5.  Market for Schlumberger’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities.

As of December 31, 2019,2021, there were 25,46423,753 stockholders of record. The principal United StatesUS market for Schlumberger’s common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol “SLB.”

The following graph compares the cumulative total stockholder return on Schlumberger common stock with the cumulative total return on the Standard & Poor’s 500 Index (“S&P 500 Index”) and the cumulative total return on the Philadelphia Oil Service Index. It assumes $100 was invested on December 31, 20142016 in Schlumberger common stock, in the S&P 500 Index and in the Philadelphia Oil Service Index, as well as the reinvestment of dividends on the last day of the month of payment. The stockholder return set forth below is not necessarily indicative of future performance.  The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Schlumberger specifically incorporates it by reference into such filing.

Comparison of Five-Year Cumulative Total Return Among

Schlumberger Common Stock, the S&P 500 Index and the

Philadelphia Oil Service Index

Share Repurchases

On January 21, 2016, the Schlumberger Board of Directors approved a $10 billion share repurchase program for Schlumberger common stock.  

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Schlumberger’sSchlumberger had repurchased $1.0 billion of its common stock repurchaseunder this program activity for the three months endedas of December 31, 2019 was as follows:2021. Schlumberger did not repurchase any of its common stock during 2021.

Unregistered Sales of Equity Securities

None.

Item 6. Selected Financial Data.[Reserved].

The following selected consolidated financial data should be read in conjunction with both “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” of this Form 10-K in order to understand factors, such as business combinations and charges and credits, which may affect the comparability of the Selected Financial Data.

During 2018, Schlumberger adopted ASU No. 2016-02, Leases. Prior year amounts reflected in the table above have not been adjusted and continue to be reflected in accordance with Schlumberger’s historical accounting.  Refer to Note 14 to the Consolidated Financial Statements for further details.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this Form 10-K.

This section of thisthe Form 10-K generally discusses 20192021 and 20182020 items and year-to-year comparisons between 20192021 and 2018.2020.   Discussions of 20172019 items and year-to-year comparisonscomparison between 20182020 and 20172019 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of Schlumberger’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.2020.

20192021 Executive Overview

Schlumberger full-year 2019 revenue of $32.9 billion was essentially flat with 2018. International revenue, however,  grewContinuing a broad recovery that began in the high single-digits as anticipated.  

In the2020, oil markets sentiment was stable andwere generally positive forthroughout the first four months of 2019,year, with the Brent oil price moving from $55starting 2021 at the year’s low of $51 per barrel, at the beginning of the year toreaching a high of $75 per barrel$85 in late April.  OECDNovember.  Sentiment in oil markets was largely positive as global demand recovered and supply was managed by a combination of the reassurance of continued intervention from OPEC+, and ongoing capital discipline by publicly traded operators in North America.

Within the context of strengthening fundamentals across the year, there were several instances where the potential impact of COVID-19 variants raised concerns regarding demand growth. However, these periods were shorter lived than the prolonged decline in 2020, which was characterized by economic lockdowns, and oil prices soon rebounded. Pricing was initially supported by OPEC+ production agreements that had come into effect in 2020 and remained resilient as those production targets were gradually increased in the second half of 2021, as crude and product stocks continued to increase through much of 2019, reversing a trend that persisted throughoutmultiyear downward trend.

International activity grew broadly across geographies in the firstsecond half of 2018. Internationally, activitythe year, including offshore and investment continueddeepwater, with operators investing in projects to strengthen, particularly offshore.meet long-term objectives and regional demand growth.

Activity in North America land also rebounded, albeit from a very low base in 2020, but did not return to prepandemic levels, as investment and production were subdued as a result of continued capital discipline on the part of larger producers.

International natural gas pricing, while following the traditional seasonal pattern, was strongvolatile, swinging from pandemic-driven lows in 2020 to record highs around the first halfworld. Domestically, US Henry Hub natural gas prices rose dramatically, averaging $3.91 per million British thermal units on a monthly basis—as compared to $2.04 in 2020—and reaching a peak of 2019 but slowed$5.87 in October before ending the year at $3.73.

Against this backdrop, Schlumberger’s full-year 2021 revenue of $22.9 billion decreased 3% year-on-year as a result of the divestitures of the OneStim pressure pumping business and the North America low-flow artificial lift business during the fourth quarter of 2020.  These divestitures were consistent with Schlumberger’s strategy to focus on expanding margins, minimizing earnings volatility and focusing on less capital-intensive businesses by high-grading and rationalizing its business portfolio.  The divested businesses accounted for approximately 25% of Schlumberger’s North America revenue in 2020. Excluding the impact of these divestitures, which generated $1.3 billion of revenue during 2020 (all of which was in North America), full-year 2021 global revenue grew 3% year-on-year, driven by an 8% increase in North America and a 2% increase in international revenue.

Financial performance in 2021 was driven by global oil and gas activity growth in the second half of the year as a combination of  budget exhaustion and cash flow constraints impacted our customers. Although the slowing activityinvestment spending experienced double-digit growth year-on-year. Consequently, Schlumberger’s revenue in the second half of 2021 grew 12% compared to the year was consistent withsame period of 2020, and increased 18% when adjusted for the trend experienced in 2018, activity dropped earlier and steeper ineffects of the divestitures.  International revenue increased 12% year-on-year during the second half of 2019 as compared to the previous year.

By midyear, concerns of a recession in the United States2021, and indications of well supplied global oil markets pushed the oil price to its low point for the year. These concerns abated over the latter part of the year as oil demand indicators trended positively. Though trade conflicts persisted, they did not create a significant drag on oil markets for the balance of the year.

The attacks on Saudi Arabia oil infrastructure in September 2019 caused a price increase of only $7 per barrel, and the price of Brent crude retreated to pre-attack levels over the course of the following week, demonstrating that the markets were well supplied. In December 2019, OPEC+ agreed to further production cuts in 2020 to alleviate the projected oversupply.

Global natural gas pricing was consistent with well-supplied markets during 2019. Liquified natural gas (LNG) supply capacity increased by an estimated 10% during 2019, and consequently LNG prices in Asia and Europe were less than half the prices seen in 2018.

Domestically, US Henry Hub natural gas prices showed continued weakness during 2019 as North American gas production increased. Prices averaged $2.56 per million British thermal units (“mmbtu”) for the year, with the peak of $4.25 per mmbtu occurring in March. The price fell to its lowest point of $1.75 per mmbtu in December.

Schlumberger financial performance in 2019 was primarily driven by the international markets. Full-year 2019 international revenue of $21.8 billion increased 7% over 2018, again outpacing North America revenue and continuing a trend which began inincreased 10%, or 44% when adjusted for the third quarter of 2018.  This strong international performance was the result of increased activity on the part of operators, as they continued to invest in longer-term resource development following a sustained period of underinvestment and declining production.

In contrast, after two years of strong growth, North American revenue fell sharply by 10% to $10.8 billion.  This decrease was largely driven by the land market weakness affecting the OneStim pressure pumping business, as customers reached their budget limits earlier in the year and remained highly disciplined on capital spend.

Additionally, during the fourth quarter of 2019, Schlumberger completed two major milestones: the formationeffects of the Sensia joint venture and the divestituredivestitures (which generated $0.5 billion of the Drilling Tools business. Together these two transactions resulted in Schlumberger receiving net cash proceeds of $586 million.

From a macro perspective, the year ended with sentiment regarding 2020 oil demand growth turning positive as uncertainty reduced following the progress made toward a US-China trade deal. The fall in the North America production growth estimate of between 400,000 to 800,000 barrels-per-day should continue to support the thesis for international investment. The recent escalation of geopolitical risk should set the floor for the oil price going forward. In the near term, Schlumberger expects the OPEC+ production cuts agreed upon in December 2019 to limit investment and activity, particularly in the Middle East and Russia,revenue during the first half of 2020. As the year progresses, the effect of slowing North America production growth is likely to cause tightness in the market and further stimulate international operators to increase their investments in the second half of 2020).

Looking ahead into 2022, we believe the year and beyond.

Based on these factors, the expectation is for the 2020 exploration and production capex spending growth rate in the international markets to be in the mid-single-digit range. Schlumberger therefore expects its international portfolio revenue to grow at the same pace or higher, excluding the effects of the businesses transferredindustry macro fundamentals are very favorable, due to the Sensia joint venturecombination of projected steady demand recovery, an increasingly tight supply market, and supportive oil prices. Schlumberger expects this to result in a material step up in industry capital spending with double-digit growth in both the businesses divested in the Drilling Tools transaction. The businesses included in these transactions accounted for approximately 2% of Schlumberger’s global revenue in 2019. International revenue growth will be more heavily weightedinternational and North American markets.  Absent any further significant COVID-related disruption, oil demand is expected to the second half of the year with increasing offshore activity, improving activity mix from the early deepwater growth cycle, and increasing exploration work towardexceed prepandemic levels before the end of the year and into 2021.further strengthen in 2023. We believe these favorable market conditions are similar to those experienced during the last industry supercycle, suggesting that resurgent global demand-led capital spending will result in an exceptional multiyear growth cycle.

In North America,Throughout 2021, Schlumberger continued to strengthen its core portfolio, enhanced its sustainability leadership, successfully advanced its digital journey, and expanded its new energy portfolio.  Schlumberger is continuingwell prepared to scale-to-fit its organization and portfolio by repurposing or exiting underperforming business units, focusing on asset-light operations, and expanding its technology access business models. fully seize this growth ahead. Schlumberger is cautiously optimistic thatentering this cycle in a position of strength, having reset its operating leverage, expanded peer-leading margins across multiple quarters, and aligned its technology and business portfolio with the high-grading of its portfolio will promote margin expansion and the improvement of returns in the North America land market.new industry imperatives.

Fourth Quarter 20192021 Results

Fourth quarterFourth-quarter revenue of $8.2$6.22 billion was 4% lower sequentially. increased 6% sequentially as a result of broad-based growth across all geographies and Divisions.

International revenue of $5.7$4.90 billion grew 2% sequentially. However, North America5% sequentially, driven primarily by strengthening activity, increased digital sales, and early benefits of pricing improvements. The sequential revenue of $2.5 billion dropped 14% sequentiallyincrease was led by growth in Europe/CIS/Africa largely due to customer budget exhaustion and cash flow constraints.

Sequential internationalstrong offshore activity in Africa. This growth was ledcomplemented by project startups and activity gains in the Middle East & Asia area, where revenue increased 5%.and sustained activity growth in Latin America.

In North America, revenue of $1.28 billion grew 1%, while revenue in13% sequentially, outperforming the Europe/CIS/Africa area only declined 2% given the mild winter slowdown of activity in the Northern Hemisphere.

rig count growth. The fourth quarter of 2019 delivered the first sequential growth in internationalwas driven by strong offshore and land drilling activity and increased exploration data licensing.

Fourth-quarter pretax segment operating margin in any fourth quarterof 16% increased 31 basis points (bps) sequentially, reaching its highest quarterly level since 2014. Schlumberger is therefore confident that it has turned the corner, particularly2015, largely as it has experienced sequential international margin growth in eacha result of the last three quarters. Meanwhile in North America land, margin compression from lower activity was minimized by implementing a scale-to-fit strategy, acting decisively in reducing capacity, and restructuring operations to protect margins.accretive effect of accelerating digital sales.

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Reservoir CharacterizationDigital & Integration

Fourth-quarter revenue of $1.6 billion decreased 1%$889 million increased 10% sequentially, followingpropelled by accelerated digital sales internationally, particularly in Europe/CIS/Africa and Middle East & Asia, and increased exploration data licensing sales in North America offshore and the endPermian. These increases, however, were partially offset by the effects of the summer campaigns for Wireline and Testing activitya temporary production interruption in the North Sea and Russia, where the mild winter did not significantly disrupt activity.APS projects in Ecuador due to pipeline disruption.

Reservoir CharacterizationDigital & Integration pretax operating margin of 22% increased 59 basis points (“bps”)38% expanded 268 bps sequentially, primarily driven bydue to higher digital and exploration data licensing sales.

Reservoir Performance

Fourth-quarter revenue of $1.3 billion increased high-margin SIS digital software sales.8% sequentially, primarily due to higher intervention activity across the international offshore markets and activity gains in the Middle East & Asia.

DrillingReservoir Performance pretax operating margin of 16% was essentially flat sequentially.

Well Construction

Fourth-quarter revenue of $2.4 billion decreased 1%increased 5% sequentially, primarilydriven by higher measurements and drilling fluids activity and increased drilling equipment sales. North America revenue increased 15% due to the end of the summer drilling campaign in Russiahigher rig count on land and lower drillingincreased well construction activity in North America land.the US Gulf of Mexico. International revenue growth of 3% was driven by growth in Latin America.

DrillingWell Construction pretax operating margin of 12%15% was essentially flat sequentially as margin improvements from drilling projects in the Middle East were offset by the seasonally lower margins in Russia and lower drilling margins in North America land.sequentially.

Production Systems

Fourth-quarter revenue of $2.9$1.8 billion declined 9%increased 5% sequentially driven by lower activity and pricing for OneStima 6% increase in North America land due to expected customer budget limitations and cash flow constraints.  Schlumberger continued to right-size its hydraulic fracturing capacity by stacking more fleetsinternational revenue.  This growth was mainly in lightEurope/CIS/Africa as a result of lower demand.strong project progress.

Production Systems pretax operating margin of 9% contracted by 32declined 85 bps sequentially due to an unfavorable mix and the lower OneStim activity, partially offset by strength in international margins from higher activity.  

Cameron

Fourth-quarter revenueimpact of $1.4 billion increased 2% sequentially from higher OneSubsea, Surface Systems, and Drilling Systems revenue primarily in the international markets. Valves & Process Systems was lower sequentiallydelayed deliveries due to the reduced North America land activityglobal supply and as a result of contributing the Valves & Process Systems measurement business to the Sensia joint venture, which closed on October1,  2019.

Cameron pretax operating margin of 9% contracted by 359 bps sequentially, driven largely by reduced margins in the OneSubsea project portfolio.

logistics constraints.

Full-Year 20192021 Results

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Full-year 20192021 revenue of $32.9$22.9 billion decreased 3% year-on-year primarily as a result of the divestitures of theOneStim pressure pumping business and the low-flow artificial lift business during the fourth quarter of 2020. Excluding the impact of these divestitures, whichgenerated $1.3 billion of revenue (all of which was essentially flat year-on-year within North America) during 2020, global revenue increased 3% year-on-year.  

In North America revenue decreasing 10%declined 18% year-on-year; however, excluding the impact of the previously described divestitures, full-year revenue increased 8%.  International revenue also increased 2%.

The growth in 2021 was driven by strong global oil and internationalgas activity in the second half of the year.  Schlumberger’s revenue increasing 7%. The international results were underpinned byin the second half of 2021 grew 12% compared to the same period of 2020 and increased investment levels. In contrast,18% when adjusted for the effects of the divestitures.  This growth was pervasive across all geographies and Divisions.

Full-year 2021 pretax operating margin of 15% was 450 bps higher compared to 2020, primarily due to the divestiture of certain businesses in North America, results reflect a slowing production growth rate on land as operators maintained capital disciplinewhich were previously dilutive to margins, combined with reduced depreciation and reduced drillingamortization expense following the asset impairment charges recorded during 2020 and hydraulic fracturing activity.the effects of cost reduction measures.

Digital & Integration

Reservoir Characterization

Full-year 20192021 revenue of $6.3$3.3 billion increased 2%7% year-on-year, primarily driven by increased international activity.robust APS project revenue from higher production and improved oil prices.

Year-on-year, pretax operating margin decreased 79 bpsincreased 11 percentage points to 21%35%.  Operating margin increased due to improved profitability from APS projects as a result of higher oil prices and reduced amortization expense following the asset impairment charges that were recorded during 2020 relating to certain APS investments.

DrillingReservoir Performance

Full-year 20192021 revenue of $9.7$4.6 billion decreased 18% year-on-year, largely reflecting the effects of the OneStim divestiture, which generated $1.2 billion of revenue during 2020.  Excluding the impact of the OneStim divestiture, revenue increased 5% year-on-year primarily due to higher demand for drilling services, largelydriven by strong activity in the international markets that benefited Drilling & Measurements, M-I SWACO, and Integrated Drilling Services.Latin America.

Year-on-year, pretax operating margin decreased 89increased by 779 bps to 13%14% despite higherthe significant drop in revenue, as margins were affected by competitive pricing and higher costs associated with a numberprimarily due to the divestiture of integrated contracts internationally.the OneStim business, which was previously dilutive to margins.

ProductionWell Construction

Full-year 20192021 revenue of $12.0$8.7 billion decreased 3% year-on-year with mostincreased 1% year-on-year.

Year-on-year, pretax operating margin increased 363 bps to 14% despite the relatively flat revenue, largely as a result of the implementation of cost control measures.

Production Systems

Full-year 2021 revenue of $6.7 billion increased 1% year-on-year, primarily driven by improved international activity that was largely offset by a decline attributable to lower OneStimin completions activity in North America as customers reduced spending due to higher costa result of capital, lower borrowing capacity and expectation of better returns from their shareholders.the pandemic.

Year-on-year, pretax operating margin decreased 20 bps to 8% primarily due to reduced profitability in OneStim in North America.

Cameron

Full-year 2019 revenue of $5.3 billion decreased 3% year-on-year due to lower revenue for OneSubsea and Valves & Process Systems.

Year-on-year, pretax operating margin decreased 35 bps to 11%was essentially flat at 9%.

Interest and Other Income

Interest & other income consisted of the following:

The decrease in interest incomeearnings of equity method investments in 20192021 as compared to 20182020 is primarily attributable to lower cash and short-term investment balances.

The decrease in earnings from equity income isSchlumberger’s share of net losses associated with Schlumberger’s equity investmentsinvestment in rig-and seismic-related businesses.Liberty.  Schlumberger records its share of Liberty’s net income or loss on a one-quarter lag.

During the fourth quarter of 2021 Schlumberger sold 9.5 million of its shares of Liberty and recognized a gain of $28 million.  See Note 3 to the Consolidated Financial Statements.

During the third quarter of 2021, a start-up company that Schlumberger previously invested in was acquired.  As a result of this transaction, Schlumberger’s ownership interest was converted into shares of a publicly traded company.  Schlumberger recognized an unrealized pretax gain of $47 million to increase the carrying value of this investment to its estimated fair value of approximately $55 million.  See Note 3 to the Consolidated Financial Statements.  

During the fourth quarter of 2020, a start-up company that Schlumberger previously invested in completed an initial public offering.  As a result, Schlumberger recognized an unrealized gain of $39 million to increase the carrying value of this investment to its fair

value of $43 million as of December 31, 2020.  See Note 3 to the Consolidated Financial Statements.  Schlumberger sold this investment during 2021, which did not result in a material gain or loss.

Interest Expense

Interest expense of $609$539 million in 2019 increased $342021 decreased $24 million compared to 2018.  This increase is2020 primarily due to an increaseas a result of the $2.7 billion year-on-year reduction in the weighted averagetotal debt balance during 2019 as compared to 2018.outstanding.

Other

Research & engineering and General & administrative expenses, as a percentage of Revenue, were as follows:

Income Taxes

The Schlumberger effective tax rate is sensitive to the geographic mix of earnings.  When the percentage of pretax earnings generated outside of North America increases, the Schlumberger effective tax rate generally decreases.  Conversely, when the percentage of pretax earnings generated outside of North America decreases, the Schlumberger effective tax rate generally increases.

The Schlumberger effective tax rate was 3%19% in 20192021 as compared to 17%7% in 2018.2020.  The lowerincrease in the effective tax rate was almost entirelyprimarily due to the charges and credits described in Note 3 to the Consolidated Financial Statements, which primarily related to non-deductible goodwill.. These charges and credits reduced the effective tax rate in 2020 by 12 percentage points as a significant portion of these charges were not tax-effective.

Charges and Credits

Schlumberger recorded significant charges and credits during 20192021 and 2018.2020. These charges and credits, which are summarized below, are more fully described in Note 3 to the Consolidated Financial Statements.

The following is a summary of the 20192021 charges and credits, of which the $247 million gain on the formationcredits.

The following is a summary of the Sensia joint venture is classified in Gain on formation of Sensia in the Consolidated Statement of Income (Loss), while the $13.15 billion of2020 charges are classified in Impairments & other.and credits.