Schlumberger Ltd.SLB

Morningstar Rating

Stock Research and Analysis

by Stephen Ellis

Schlumberger is one of the top firms in the oil services industry. In our view, the company is well-positioned to benefit from the industry's current weakness and future rebound, given its financial strength, geographical and product diversification, Read more

Bulls Say

Schlumberger is the industry leader in the important Russian oil services market, which is poised for years of growth. We believe the company has an insurmountable lead over its competitors, as a result of years of building relationships with Russian national oil companies.

Schlumberger is winning many integrated project-management efforts from Mexico to Russia where it manages the entire oil field operations, from shooting seismic to drilling wells. We believe its decades of services experience and close relationships with national oil companies help the firm win some of the largest contracts.

The firm has a strong R&D edge, with 7,000 people working in 25 research and development centers around the world.

A strong rebound in drilling activity in North America could tighten the services market and boost Schlumberger's pricing power. Read more

Bears Say

An increase in hiring and training outside the United States could inadvertently result in technology transfer to the new countries and new local competitors appearing.

The U.S. pressure pumping market has been oversupplied since late 2006, and the market shows no signs of improving anytime soon. We expect Schlumberger's large pressure pumping operations to continue to struggle.

Countries concerned with energy security rather than maximizing production may not focus on acquiring Schlumberger's profitable production-optimizing technology.

If commodity prices collapse and customer expectations reset to dramatically lower levels, Schlumberger's business will be negatively affected. Read more

Strategy

The firm's strategy is to rely on its technology and R&D leadership to drive growth in revenue and profits. The company has invested extensively in R&D and employee training centers around the Read more

Management

CEO Andrew Gould has done an excellent job repositioning Schlumberger from an unfocused firm just a few years ago to one of the strongest oil services providers in the industry. We think the firm's disclosures in its financial statements and on its Read more

Profile

Schlumberger is one of the largest oil services companies, with more than 87,000 employees across 80 countries. It offers a near-complete array of oil services--from seismic Read more

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