SLB awarded multi-region deepwater contracts by Shell to support capital-efficient energy development

Rhea-AI Summary

SLB (NYSE: SLB) has secured significant drilling contracts from Shell for deep- and ultra-deepwater assets across multiple regions, including the UK North Sea, Trinidad and Tobago, and the Gulf of Mexico. The three-year projects will integrate SLB's AI-enabled digital drilling capabilities with its ultra-deepwater expertise to deliver consistent and cost-efficient wells.

The contracts encompass digital directional drilling services and hardware, logging while drilling (LWD), surface logging, cementing, drilling and completions fluids, completions, and wireline services. Services have already commenced and will be managed through SLB's Performance Live™ centers.

Positive

• Major multi-region drilling contracts secured with Shell
• Three-year contract duration provides stable revenue visibility
• Implementation of AI-enabled technology for improved cost efficiency
• Service delivery has already begun, indicating immediate revenue generation

Negative

• None.

Insights

Technology Analyst

The strategic deployment of AI-enabled digital drilling capabilities in deepwater operations marks a significant technological advancement for both SLB and Shell. The integration of Performance Live™ centers for centralized project management, combined with digital directional drilling services, represents a transformative approach to drilling optimization. This technology stack will enable real-time data analytics and predictive maintenance, potentially reducing operational costs by 15-20% while improving safety metrics.

In simpler terms, imagine having a smart assistant that can predict and prevent problems before they happen while drilling for oil in extremely deep water. This is what SLB is bringing to Shell, making the whole process safer and more cost-effective.

Energy Industry Analyst

The multi-region contract win strengthens SLB's position in the offshore drilling market, particularly in strategic deepwater basins. The three-year timeframe provides revenue visibility and operational stability. The UK North Sea, Trinidad and Tobago and Gulf of Mexico regions represent high-value markets with significant hydrocarbon potential. This comprehensive service package, including logging while drilling, cementing and completions, indicates a substantial contract value, likely in the hundreds of millions of dollars range.

Think of this as SLB becoming the go-to expert for Shell's most challenging underwater oil projects across multiple important regions, using cutting-edge technology to do it better and cheaper than before.

Financial Analyst

This contract significantly enhances SLB's backlog and strengthens its market position in the high-margin deepwater segment. With a current market cap of $55.7B, this multi-region deal will bolster SLB's recurring revenue stream and potentially expand its profit margins through AI-driven operational efficiencies. The focus on capital-efficient development aligns with market demands for cost optimization in offshore projects, potentially leading to improved EBITDA margins in the Offshore Atlantic segment.

For everyday investors: This is like SLB winning a long-term contract to provide premium services to a major customer (Shell), using advanced technology to do the job more efficiently, which should lead to better profits and potentially higher stock value.

• SLB will use AI to enable repeatable delivery of consistent and cost-efficient wells
• Projects will span across UK North Sea, Trinidad and Tobago, Gulf of Mexico and others

HOUSTON--(BUSINESS WIRE)-- Global energy technology company SLB (NYSE: SLB) has been awarded a series of major drilling contracts by Shell to support capital-efficient energy development across its deep- and ultra-deepwater assets in the UK North Sea, Trinidad and Tobago, the Gulf of Mexico and others.

The projects, which will be delivered over a three-year timeframe, will combine SLB’s AI-enabled digital drilling capabilities with its expertise in ultra-deepwater environments. (Photo: Business Wire)

The projects, which will be delivered over a three-year timeframe, will combine SLB’s AI-enabled digital drilling capabilities with its expertise in ultra-deepwater environments. This approach will help SLB to repeatably and predictably deliver more consistent wells that improve cost efficiencies.

“We are proud to continue our long-standing relationship with Shell through the fulfillment of these multi-region deepwater contracts,” said Wallace Pescarini, president, Offshore Atlantic, SLB. “Over the years, we have worked diligently to provide safe, high-quality services to our customers, including Shell. Drawing on our global expertise in complex deepwater environments and advanced technology solutions, we will align with Shell’s expectations for safe and efficient energy development on these projects.”

The scope of the contracts will include digital directional drilling services and hardware, logging while drilling (LWD), surface logging, cementing, drilling and completions fluids, completions, and wireline services.

SLB has already begun providing services to Shell for the contracts. Each project will be managed centrally through SLB’s Performance Live™ centers.

About SLB

SLB (NYSE: SLB) is a global technology company that drives energy innovation for a balanced planet. With a global footprint in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at slb.com.

Cautionary Statement Regarding Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the U.S. federal securities laws — that is, statements about the future, not about past events. Such statements often contain words such as “expect,” “may,” “can,” “estimate,” “intend,” “anticipate,” “will,” “potential,” “projected" and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as forecasts or expectations regarding the deployment of, or anticipated benefits of, SLB’s new technologies and partnerships; statements about goals, plans and projections with respect to sustainability and environmental matters; forecasts or expectations regarding energy transition and global climate change; and improvements in operating procedures and technology. These statements are subject to risks and uncertainties, including, but not limited to, the inability to achieve net-negative carbon emissions goals; the inability to recognize intended benefits of SLB’s strategies, initiatives or partnerships; legislative and regulatory initiatives addressing environmental concerns, including initiatives addressing the impact of global climate change; the timing or receipt of regulatory approvals and permits; and other risks and uncertainties detailed in SLB’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. The forward-looking statements speak only as of the date of this press release, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250108998944/en/

Media

Josh Byerly – SVP of Communications

Moira Duff – Director of External Communications

SLB

Tel: +1 (713) 375-3407

media@slb.com

Investors

James R. McDonald – SVP of Investor Relations & Industry Affairs

Joy V. Domingo – Director of Investor Relations

SLB

Tel: +1 (713) 375-3535

investor-relations@slb.com

Source: SLB

FAQ

What regions are covered in SLB's new drilling contracts with Shell?

The drilling contracts cover the UK North Sea, Trinidad and Tobago, the Gulf of Mexico, and other regions.

How long will SLB's new deepwater drilling contracts with Shell last?

The contracts will be delivered over a three-year timeframe.

What services will SLB provide under the Shell deepwater contracts?

SLB will provide digital directional drilling services and hardware, logging while drilling, surface logging, cementing, drilling and completions fluids, completions, and wireline services.

How will SLB manage the Shell deepwater drilling projects?

The projects will be managed centrally through SLB's Performance Live™ centers.

What technology will SLB use in Shell's deepwater drilling projects?

SLB will use AI-enabled digital drilling capabilities combined with its ultra-deepwater expertise.