Schlumberger NV (SLB) has posted a 22 percent rise in net profit to $4.2 billion for 2023, a record year for its Middle East operations in terms of revenue. The oilfield services company posted $33.1 billion in revenue with all four segments seeing a rise, led by production systems, which increased 25 percent year-on-year to $9.8 billion. Well construction revenue grew 18 percent to $13.5 billion. Middle East and Asia led geographically in revenue climbing 22 percent to $11 billion year-over-year. North America accounted for $6.7 billion, a 12 percent growth. “Notably, we achieved our highest-ever revenue in the Middle East, led by impressive growth in Saudi Arabia, the United Arab Emirates, and Egypt & East Mediterranean GeoUnits”, chief executive Olivier Le Peuch said in a statement, using a company term for area of operation. The last quarter of 2023 saw higher drilling, intervention, stimulation and evaluation activity both onshore and offshore in the Middle East and Asia. Curacao-registered SLB, which also operates in Africa, Europe and South America, said it plans to focus investment on the Middle East over the rest of the decade, downplaying risks from geopolitical tensions in the region. “As global energy demand continues to increase, international production is expected to play a key role in meeting supply through the end of the decade”, Le Peuch said. “Notably, we anticipate record investment levels in the Middle East extending beyond 2025, with significant expansion in Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. “Offshore remains another distinct attribute of this durable growth cycle, serving as an important source for production growth and capacity additions, and we expect strong activity to continue in Brazil, West Africa, the Eastern Mediterranean, the Middle East, and Southeast Asia. “In the international environment, despite elevated geopolitical tensions in various regions, we do not anticipate a significant impact on the sector’s overall activity, absent any escalation. “Furthermore, we expect the long-cycle investments across the Middle East, global offshore, and gas resource plays to be largely decoupled from short-term commodity price fluctuations”. The International Energy Agency (IEA), however, has projected oil supply growth in 2024 would be led by producers outside the Middle East-dominated Organization of the Petroleum Exporting Countries Plus (OPEC+) alliance, which has been extending production cuts. “OPEC+ supply is expected to hold broadly steady on last year, assuming extra voluntary cuts that started this month are phased out gradually in 2Q24 [second quarter of 2024]”, the multi-governmental body said in its January “Oil Market Report”. The IEA warned that risks of disruptions in global oil and gas supply and prices from tensions in the Middle East remain elevated at the start of the year, citing shipping disruptions around the Red Sea. “In 2023, roughly 10 percent of the world’s seaborne oil trade, or around 7.2 mb/d [thousand barrels per day] of crude and oil products, and 8 percent of global LNG [liquefied natural gas] trade passed through this major trade route”, the IEA said. “The main alternative shipping route around Africa’s Cape of Good Hope extends voyages by up to two weeks – adding pressure on global supply chains and boosting freight and insurance costs”. While expecting growth to continue this year SLB maintained the same level of capital expenditure guidance as 2023 at $2.6 billion. It exited 2023 with $17.7 billion in current assets, including $4 billion in cash and short-term investments. Meanwhile SLB’s current liabilities stood at $13.4 billion including $1.1 billion in short-term debt and current portion of long-term debt. SLB paid nearly four times more dividends in 2023 against 2022 at $1.3 billion. Citing “confidence in the strength and longevity of the cycle and visibility into sustained strong cash flows”, Le Peuch announced a 10 percent raise for SLB’s quarterly dividend rate. That means an increase to $0.275 per common stock, from the $0.25 per common stock announced in the previous quarterly report. The dividend is payable to shareholders of record as of the first week of February. “Additionally, we plan to increase share repurchases in 2024, visibly enhancing returns to shareholders for the full year”, SLB’s chief executive added. To contact the author, email jov.onsat@rigzone.com