Schlumberger Limited. (NYSE:SLB) is removing its employees from Russia in response to the growing bad relations between Russia and the West. The company is said to be withdrawing its employees who are U.S. and European citizens.
The company is the world’s biggest oilfield services provider and it has been in Russia over oil production projects.
The process is said to begin with expat managers with 20 mid level managers already identified to be removed.
The U.S. and several European countries have issued sanctions on Russia, bringing to a halt several activities that several companies have been undertaking in the country. Schlumberger Limited. (NYSE:SLB) said categorically that its earnings will be affected as a result of the sanctions. According to reports, Schlumberger Limited. (NYSE:SLB) earns a total of $2.2 billion of its income come from Russia, which accounts for 5%. This has been thrown into jeopardy as a result of the sanctions.
Just recently, Exxon Mobil reported to be winding down its operations as the company’s license to do so is approaching expiration. Amid such developments, Russian Rosneft announced to have struck oil in the project that brought together the company and Exxon Mobil on the island of Sakhalin.
The scale down is expected to cut down the world oil production capacity with effects likely to be felt soon.
“If Schlumberger and others scale down involvement in the Russian oil sector, the impact on output could start to be felt within months, maybe cutting output by 1% percent next year,” said Alexei Kokin, an oil and gas analyst at UralSib Financial Corp.
Schlumberger Limited. (NYSE:SLB) is a big player that was projected to earn a big chunk of the $52 billion that production companies were expected to spend in Russia this year. This will however be cut down as a result of the sanctions.
This article has been written by Victor Ochieng.