Schlumberger Announces First-Quarter 2011 Results

Schlumberger Limited (NYSE:SLB) today reported first-quarter 2011
revenue of $8.72 billion versus $9.07 billion in the fourth quarter of
2010 and $5.60 billion in the first quarter of 2010.

Net income attributable to Schlumberger, excluding charges, was $972
million?a decrease of 16% sequentially but an increase of 30%
year-on-year. Diluted earnings-per-share, excluding charges, was $0.71
versus $0.85 in the previous quarter, and $0.62 in the first quarter of
2010.

Schlumberger recorded charges of $0.02 per share in the first quarter of
2011, $0.09 in the fourth quarter of 2010, and $0.06 in the first
quarter of 2010.

Oilfield Services revenue of $8.12 billion decreased 4% sequentially but
increased 45% year-on-year. Pretax segment operating income of $1.46
billion was down 14% sequentially but increased 40% year-on-year.

Distribution revenue of $601 million increased 4% sequentially. Pretax
segment operating income of $22 million improved 7% sequentially.

Schlumberger Chairman and CEO Andrew Gould commented, 'First-quarter
results compounded the normal sequential drop in product, software and
multiclient sales with exceptional weather conditions in the US and
Australia and multiple activity disruptions from political unrest.

Reservoir Characterization saw this decline in sales of multiclient
seismic and software. Wireline was adversely affected by weather in
Australia and political unrest in North Africa and the Middle East but
the underlying trends were positive and absent exceptional items,
Wireline growth was encouraging?particularly for higher technology
services.

The recent completion of various licensing rounds around the world will
ensure sustained marine seismic activity for the rest of the year. The
anticipated increases in exploration budgets and the advent of
additional development activity, especially in the Middle East and North
America, will rapidly improve business conditions for Wireline and
Testing Services. The continued success of new Petrel releases,
particularly for exploration, will ensure further strong performance
from SIS.

Despite the seasonal drop in Russia and at M-I SWACO, Drilling Group
revenue increased through excellent performance at IPM Well
Construction, particularly in Iraq. In addition, growth in revenue
synergies with Smith and Geoservices products and services was very
strong. For Drilling & Measurements, service pricing remains extremely
competitive internationally but excellent service quality and advanced
technology allows this effect to be offset to some degree. Activity
increases later in the year should lead to considerable tightening of
capacity in this market with consequent effects on price.

Reservoir Production continued to make strong gains in North America in
both activity and pricing, which more than compensated for the absence
of the gain share project that was recognized in the fourth quarter. The
first quarter also saw continued strong sales of new technology with
HiWAY stimulation and ACTive coiled-tubing services being in particular
demand. There was also significant success in international
unconventional gas activity.

The absence of oil production from Libya, combined with continued
recovery in demand, has reduced the world′s spare capacity
significantly. The call on both fuel oil and natural gas will increase
as Japan recovers. The exploration and production industry has begun to
respond and, absent a further leg to the recession, will have to
substantially increase investment to maintain a comfortable supply
cushion in an era of political uncertainty. We anticipate that high oil
prices will continue to support additional drilling in the liquid-rich
plays in North America. The upturn in deepwater activity more generally
is becoming increasingly visible, and the rate of permitting in the US
Gulf of Mexico is accelerating. Middle East activity is increasing
substantially, led by Saudi Arabia and Iraq.

These activities will progressively mobilize over the next six months
and the projected increases will reach levels where resources will
become constrained.  Schlumberger is ready for this scenario with new
technology, equipment and people. Our Excellence in Execution
initiative, which started in 2007, is already paying dividends, and will
continue to do so.?

Other Events:

• 
  During the quarter, Schlumberger repurchased 9.7 million shares of its
  common stock at an average price of $87.18 for a total purchase price
  of $844 million under the stock repurchase program approved by the
  Schlumberger Board of Directors on April 17, 2008.
  
• 
  During the quarter, Schlumberger repurchased the remaining outstanding
  long-term fixed rate debt assumed in the merger with Smith
  International, Inc. for $1.3 billion.
  
• 
  On April 5, 2011, Schlumberger completed the divestiture of its Global
  Connectivity Services business for $397.5 million in cash.
  

Net Debt

'Net Debt? represents gross debt less cash, short-term investments and
fixed income investments, held to maturity. Management believes that Net
Debt provides useful information regarding the level of Schlumberger′s
indebtedness by reflecting cash and investments that could be used to
repay debt. Details of changes in Net Debt for the year follow

Charges

In addition to financial results determined in accordance with generally
accepted accounting principles (GAAP) this First-Quarter Earnings Press
Release also includes non-GAAP financial measures (as defined under the
SEC′s Regulation G). The following is a reconciliation of these non-GAAP
measures to the comparable GAAP measures:

Interest income and interest expense exclude interest included in the
product groups and geographic areas results.

Oilfield Services

First-quarter revenue of $8.12 billion decreased 4% sequentially but
increased 45% year-on-year. The impacts of extraordinary geopolitical
events in North Africa and the Middle East as well as severe weather in
the US and Australia during the quarter affected all three Product
Groups and accounted for approximately half of the sequential decrease
in total Oilfield Services revenue.

Excluding the impact of these geopolitical and weather events,
sequential revenue performance varied by Group. Reservoir
Characterization revenue decreased primarily on lower WesternGeco
multiclient and Schlumberger Information Solutions (SIS) software sales
following their fourth-quarter 2010 seasonal highs as well as on lower
Testing Services activity, but these effects were partially offset by
higher Wireline activity, particularly in North America. Drilling
revenue increased on higher IPM Well Construction activity in the Middle
East & Asia, Latin America and Europe/CIS/Africa Areas, which was
partially offset by a decrease in M-I SWACO revenue following the high
product sales of the fourth quarter, and by lower Drilling &
Measurements revenue through a less favorable activity mix and lower
pricing in Europe/CIS/Africa. Reservoir Production revenue
increased sequentially on higher pricing and activity in North America,
although this was partially offset by the absence of the Integrated
Project Management (IPM) gain share payout in North America and the
absence of the Artificial Lift and Completions Systems equipment sales
seen in the fourth quarter.

On a geographical basis, Europe/CIS/Africa revenue decreased
sequentially primarily due to disruptions resulting from the political
unrest in North Africa, a less favorable revenue mix coupled with lower
software sales in the North Sea GeoMarket, and seasonally lower activity
in Russia. Middle East & Asia revenue was lower as increasing
IPM activity in Iraq and shale gas activity in India were insufficient
to offset the impact of geopolitical events in the Middle East,
seasonally lower software and equipment sales, and weather-related
slowdowns in Australia. In North America, higher pricing for Well
Services technologies, stronger winter season activity in Canada, and
increased demand for M-I SWACO services fully offset lower WesternGeco
multiclient sales, the non-recurrence of the IPM gain share payout, and
the impact of weather-related slowdowns on land in the US. In Latin
America, increased WesternGeco and M-I SWACO activity in the Brazil
GeoMarket balanced lower offshore activity and reduced software sales in
the Mexico/Central America GeoMarket.

First-quarter pretax operating income of $1.46 billion decreased 14%
sequentially but increased 40% year-on-year. Pretax operating margin
decreased 206 basis points (bps) sequentially to 17.9% primarily due to
the reduced software and equipment sales as well as the lower
WesternGeco multiclient sales; the non-recurrence of the IPM gain share
payout; the impact of the geopolitical events in North Africa and the
Middle East; and the weather-related slowdowns in the US and Australia.

The quarter′s technical highlights were led by rapid growth in the
deployment of Well Services HiWAY* flow-channel hydraulic fracturing
technology. Total job count is now approaching 1,000 with 528 stages
completed in the first quarter of 2011 compared to 102 in the fourth
quarter of 2010. The first horizontal openhole well in the Bakken shale
with 19 stages has been successfully completed while the first job has
been conducted in the Middle East. A significant number of opportunities
for future jobs are now under evaluation and new fields for HiWAY
technology deployment are under discussion in the US, Canada, Argentina,
India, Oman, Saudi Arabia, Egypt, Algeria, Congo and Angola.

Integration between Groups and Technologies was evidenced by a number of
other technical highlights during the quarter.

For example, in Brazil, the OGX Waimea well has been drilled and
completed exclusively with Schlumberger services from Drilling &
Measurements, Wireline, Testing Services, Well Services, M-I SWACO, Bits
& Advanced Technologies and Drilling Tools & Remedial. Schlumberger also
installed the wellhead and stimulated eight sections of the horizontal
openhole completion using the Well Services FlexSTIM* modular offshore
stimulation vessel recently introduced in Brazil to support OGX in the
Campos basin. The Waimea well is the first multistage horizontal
completion in a carbonate formation in Brazil and was completed with a
1,000-m horizontal leg that achieved 74% reservoir contact in a
formation where no offset well data were available. Following this
success, OGX has ordered five additional multistage completion systems
for upcoming work.

A number of Schlumberger services were also deployed for Tullow Oil in
French Guiana on an ultradeepwater deviated wildcat exploration well.
Technologies and services from Drilling & Measurements, M-I SWACO,
Geoservices, Smith Bits, Drilling Tools & Remedial and Wireline are
being coordinated by IPM on an operation that involves long supply lines
and the lack of any local oilfield infrastructure. The project was
mobilized on an extremely aggressive schedule and used a new rig to
drill in over 2,000 m of water in an area without any offset well data.

In Argentina, Schlumberger successfully performed the first fracture
stimulation treatment ever done in a shale gas well in South America on
the Loma la Lata Field for YPF S.A. The operation is the largest
stimulation treatment ever performed in the region and was designed
using the latest technology developed to optimize placement in an
integrated effort between Data & Consulting Services, Wireline and Well
Services. The operation presented a number of logistical challenges that
were successfully overcome, resulting in flawless execution.

Artificial Lift and Testing Services successfully completed a heavy oil
well test on the Xcite Energy Bentley appraisal well in the UK sector of
the North Sea, achieving all key test objectives. REDA* electrical
submersible pumps, SCAR* inline independent reservoir fluid sampling,
and PhaseTester* portable multiphase well testing equipment with Vx*
multiphase well testing technology were successfully used in combination
while continuous real-time surveillance and reservoir engineering
expertise from the Artificial Lift Surveillance Center in Scotland
helped ensure a successful test.

A number of contract awards that illustrate the Schlumberger
geographical footprint were recorded.

BP Iraq N.V. awarded Schlumberger a two-year contract for bundled
services to complete the drilling of 46 re-entry wells and 25 new wells
that will require a total of 4 rigs. The contract covers technologies
from Wireline, Drilling & Measurements, Geoservices, M-I SWACO and Well
Services.

In Ghana, Hess Ghana Exploration Limited awarded Schlumberger a contract
for wireline logging services on their upcoming exploration campaign.
The award was based on Schlumberger presence and infrastructure in the
region, together with the availability of technology for deployment on
deepwater frontier projects in the Gulf of Guinea.

WesternGeco also secured significant contract awards during the quarter.
In the North Sea, BP awarded two contracts for 4D monitor programs, one
each in Norway and the UK using Q-Marine Solid* streamer technology.
Offshore South Africa PetroSA awarded WesternGeco two Q-Marine* surveys
covering a total of approximately 3,000 km2. The first of these will use
the DISCover* deep interpolated streamer coverage acquisition technique
that delivers broadband seismic data. BP Indonesia awarded WesternGeco a
three-year contract for the processing of seismic data from offshore
Indonesia and other areas in South East Asia. The processing will be
carried out in the WesternGeco GeoSolutions center in Jakarta using
advanced imaging workflows.

Reservoir Characterization Group

First-quarter revenue of $2.19 billion was 12% lower sequentially and
decreased 2% year-on-year. Pretax operating income of $460 million was
32% lower sequentially and decreased 19% year-on-year.

Sequentially, Group revenue was severely impacted by disruptions from
the geopolitical events in North Africa and the Middle East. WesternGeco
revenue decreased following the fourth-quarter surge in multiclient
sales in the US Gulf of Mexico and through lower Land activity as a
consequence of the geopolitical events while Marine revenue increased
due to a more favorable revenue mix. SIS revenue fell sharply from
seasonally lower software sales across all geographic Areas. Testing
revenue decreased on reduced equipment sales and activity, especially in
Latin America; on completion of projects in the Australia/Papua New
Guinea and East Asia GeoMarkets; on the winter seasonal slowdown in
Russia; and on the geopolitical events. Wireline revenue was flat
sequentially as strong winter activity in Canada was offset by the
impact of the geopolitical events and weather slowdowns in Australia.

Pretax operating margin decreased 606 bps sequentially to 21% primarily
due to the seasonally lower multiclient and software sales, the impact
of the geopolitical events, the poor weather conditions in Australia,
and the lower Testing activity in Latin America and Asia.

Reservoir Characterization Group activities saw a number of new or
significant technology deployments in the quarter.

WesternGeco completed acquisition of a survey in the Santos
basin, Brazil, for Petrobras using the Coil Shooting* single-vessel
full-azimuth acquisition technique?the first such survey offshore Latin
America. WesternGeco also completed acquisition of approximately 2,800
km2 of marine seismic data in the equatorial margin region of Brazil
where more than half of the survey was contracted by Petrobras and the
remaining data acquired as a multiclient survey. The acquisition was
performed using Q-Marine Solid streamer technology. All data sets are
now undergoing processing at the Schlumberger Brazil Research and
Geoengineering Center in Rio de Janeiro.

Also in Brazil, Petrobras awarded WesternGeco acquisition and processing
contracts for 10,600 km2 of development seismic data offshore. The data
will be acquired with the Q-Marine point-receiver system and processed
with close collaboration between WesternGeco and Petrobras teams in the
Schlumberger Brazil Research and Geoengineering Center.

WesternGeco was awarded a Coil Shooting contract by Total Exploration
and Production Angola, a Total subsidiary and partner. This will be the
first such full-azimuth seismic survey in West Africa, is located in
Angola on Block 33-Calulu, and includes a large long-offset
narrow-azimuth survey. WesternGeco will apply advanced processing
technologies to the complex dataset, including 3D generalized surface
multiple prediction (GSMP), reverse time migration (RTM), and beam depth
migrations using a tilted transverse isotropy model.

In North America, WesternGeco completed acquisition of the E-Octopus XI
wide-azimuth multiclient survey in the Keathley Canyon area of the
central Gulf of Mexico. This project will create a seamless wide-azimuth
image across the previously acquired E-Octopus I, II, IV, IX and X
multiclient surveys. On other surveys in the central Gulf of Mexico,
final multiclient processing products including anisotropic RTM volumes
were delivered on the Freedom and Liberty wide-azimuth joint-venture
projects with TGS-NOPEC Geophysical Company. These two projects consist
of more than 800 Outer Continental Shelf blocks in the Mississippi
Canyon, Atwater Valley and Green Canyon areas.

Wireline Dielectric Scanner* technology continued deployment in
Saudi Arabia, being run in an exploration well that was expected to
contain heavy oil. The results indicated one formation to be saturated
with fresh water, and this was later confirmed with MDT* modular
formation dynamics tester technology. In this well, the Dielectric
Scanner service provided timely information to optimize the wireline
formation tester sampling program and avoid unnecessary drill stem tests.

An intensive formation evaluation program was successfully accomplished
for Ural Oil and Gas, a joint venture between Meridian Petroleum, MOL
and FIOC-SINOPEC, on their first exploration well in Kazakhstan. Several
unique Wireline technologies, including the Sonic Scanner* acoustic
scanning platform, the In-Situ Fluid Analyzer* system, and the slimhole
PressureXpress* reservoir pressure while logging service, enabled the
operator to significantly enhance understanding of the reservoir. In
addition, the Isolation Scanner* cement evaluation service was used for
cement quality determination, while MDT modular formation dynamics
tester technology provided detailed reservoir characterization
information through interval pressure transient testing. The program
also included borehole seismic profiling and sidewall core recovery.

In the Rockies, operator Whiting Oil & Gas utilized the Wireline FMI*
Fullbore MicroImager and MDT Modular Formation Dynamics Tester
technologies to optimize production and horizontal well design through
the accurate determination of maximum horizontal stress in the
liquids-rich Niobrara play. In the DJ Basin, the targeted Niobrara
Formation typically shows few drilling induced fractures or significant
contrasts between maximum and minimum horizontal stress. The MDT tool
was used to induce localized fractures in several potential horizontal
target zones with follow-up FMI measurements recording images of the
fractures to determine maximum horizontal stress orientation. The stress
data helped the operator design an optimized drilling program relative
to the localized stress regime.

In China, Wireline dual CHDT* cased-hole dynamics tester tools were run
on the world's longest TLC* tough logging conditions system in a highly
deviated well for CACT Operators Group to a total measured depth of 7
km. Three pressure and sampling stations were completed to deliver
real-time determination of fluid type and composition that helped the
client make the decision to produce the well?which is now flowing at a
rate of more than 1,100 bbl/d. The job was completed in 8 days,
translating to a 60% saving in rig time over other potential solutions.
Careful planning, smooth operations, and real-time technical support
ensured flawless execution.

In Norway, Statoil awarded SIS a three-year contract for hosting
their international seismic prestack data. Traditionally, SIS has
successfully hosted the international poststack seismic for Statoil
utilizing the ProSource* E&P corporate information management system.
The amalgamation of both types of data with ProSource technology enables
Statoil to have fast, intuitive, and single-point access to all their
international seismic data.

Lagopetrol, a joint venture between PDVSA and Maurel & Prom, has awarded Data
& Consulting Services a reservoir geomechanics project for the
Eocene B2X 70/80 reservoir in the Maracaibo Lake area to help optimize
an infill drilling and water injection campaign. The reservoir is
estimated to have produced approximately 7% of the oil originally in
place but reservoir pressure has fallen considerably indicating the need
for secondary recovery that could add significant reserves. The project
workscope includes a data audit, building a mechanical earth model (MEM)
based on fifteen wells, analysis of wellbore stability, a static model
of the reservoir and Petrel* 3D MEM and VISAGE* pre-production stress
modeling. The award was based on strong teamwork between Schlumberger
and PDVSA global account management, and demonstrates the value of
Schlumberger technology in helping achieve production objectives.

Drilling Group

First-quarter revenue of $3.20 billion was 1% lower sequentially but
120% higher year-on-year. Pretax operating income of $467 million was
flat sequentially but increased 71% year-on-year.

Sequentially, the decrease in Group revenue was primarily due to
disruptions resulting from geopolitical events in North Africa and the
Middle East. Excluding the impact of these disruptions, Group revenue
increased sequentially but varied by Technology. IPM Well Construction
revenue increased on strong activity growth in Iraq, Mexico and Russia.
Drilling & Measurements revenue declined from lower activity and pricing
in Europe and Africa and the completion of offshore exploration projects
in Australia/Papua New Guinea?although these effects were mitigated by
the return of some deepwater work in the US Gulf of Mexico and by an
increase in activity in Latin America and Russia. Following strong
product sales in the fourth quarter of 2010 and despite continued strong
activity in North America, M-I SWACO revenue decreased as a result of
the weather-related slowdowns in Australia as well as a result of
delayed projects in the Europe/CIS/Africa Area.

Sequentially, pretax operating margin was essentially flat at 14.6% as
the contribution from the increased IPM Well Construction activity was
offset by the impact of activity declines for M-I SWACO and reduced
pricing for Drilling & Measurements services.

Drilling Group Technologies helped customers improve performance in a
number of key areas.

In Russia, Schlumberger was a key contributor to the successful drilling
and completion of the world's longest extended-reach well at the remote
sub-arctic Odoptu field. Odoptu OP-11, drilled by Exxon Neftegas
Limited, operator of the Sakhalin-1 Project, reached a record measured
depth of 12,345 m (7.67 miles) in only 60 days. This well also holds the
new record for horizontal reach at 11,475 m (7.13 miles). The well was
drilled with the use of Drilling & Measurements PowerDrive
X5* and PowerDrive Xceed* rotary steerable systems, and StethoScope*,
EcoScope*, TeleScope*, arcVISION* and proVISION* logging-while-drilling
and measurement-while-drilling technologies. Several technology
innovations featured during the execution of the well, including
best-in-class data transmission rates and high-accuracy vertical-depth
positioning with independent validation from StethoScope pressures in
real time. Each section of the well was drilled in a single pass,
delivering on the Schlumberger commitment to world-class service quality
for its customers under the most challenging conditions.

In East Texas, operator Anadarko Petroleum ran the PowerDrive Archer*
slimhole rotary steerable system to drill the 8 3/4-in curve on a recent
Cotton Valley well. With traditional downhole motors, Cotton Valley
wells typically take seven to eight days to land the curve, using three
insert bits. With PowerDrive Archer technology, the curve was landed in
four days. The new service enabled the section to be drilled at a higher
buildup rate than with other rotary steerable systems and increased rate
of penetration (ROP) significantly.

Advanced Drilling & Measurements technologies were successfully deployed
in the first five wells of the N'Dola drilling campaign in Angola for
Chevron. A bottomhole assembly combining the PowerDrive rotary steerable
system and ImPulse* integrated measurement-while-drilling platform with
StethoScope formation-pressure-while-drilling, SonicScope* multipole
sonic-while-drilling, and adnVISION* azimuthal density neutron
logging-while-drilling technologies was run to acquire critical logging
data while drilling and steering the well. ImPulse and adnVISION data
quality was excellent, permitting complete formation evaluation
interpretation while drilling without compromising petrophysical
workflow. SonicScope technology provided robust real-time acoustic
measurements of shear and compressional slowness for formation
evaluation, geomechanics and seismic correlation while StethoScope
measurements were used to evaluate each layer, optimize completion and
fracture designs, and significantly improve overall field understanding.

Drilling & Measurements PowerDrive X5 rotary steerable technology has
been deployed on a well for Energean Oil & Gas in the Prinos field
offshore Greece to boost production. The technology mitigated risk in
drilling operations in zones that experienced borehole instability and
stuck pipe in the past, and enabled efficient drilling of both sections
of the well in single runs with drilling being 47% faster than planned.
The technology is expected to be used in other wells planned in the
Prinos and Epsilon fields.

The CACT Operators Group completed two challenging thin oil column
side-tracked wells in the South China Sea using Drilling & Measurements
PowerDrive X5 rotary steerable systems with PeriScope* bed boundary
mapper technology in the horizontal sections. Both wells produced a
total of 4,100 bbl/d?a figure significantly higher than the target of
2,400 bbl/d?and achieved cost savings of 21% compared to budget.

In Australia, the Drilling & Measurements PowerDrive vorteX* powered
rotary steerable system and the PowerV* vertical drilling system with a
high-performance PowerPak ERT* power section was used for Eni to
maintain hole verticality in an area traditionally associated with
strong formation-induced deviation effects. Not only did Eni maintain a
well inclination below 0.14 ° resulting in total bottom-hole displacement
of less than 2 ft, but the additional torque generated by the PowerPak
ERT power section delivered a 24% improvement in ROP compared to an
offset well.

In Mexico, advanced Drilling & Measurement technologies have continued
market deployment for PEMEX. In the South Region, Drilling &
Measurements technology successfully geosteered a well with the
PeriScope bed boundary mapper system to re-enter a target sand 30 ft
below the well landing point. The success of this operation enables
PEMEX to continue using horizontal drilling effectively in the region.
Elsewhere, Drilling & Measurements technologies helped PEMEX improve
drilling performance in the East Region where more than 10 days were
saved in the 12 1/4-in section of one well through the use of PowerDrive
rotary steerable systems. In the same region, Schlumberger was also able
to deploy a complete set of logging-while-drilling services, including
SonicScope multipole sonic-while-drilling technology, in a well where
regular wireline services could not be run due to tar deposit
restrictions.

M-I SWACO Ultradril* high performance water-base mud system has
been used to batch drill five wells for Premier Oil in the Indonesian
Natuna Sea, Block-A. The Natuna area is known for highly unconsolidated
sands and reactive clays where synthetic-base fluid was predominantly
utilized. With an initiative from Premier Oil to minimize the use of
non-aqueous fluids and reduce impact on the environment, and with the
technical knowledge brought forward by the Indonesian and regional
support teams, the Ultradril system was proposed. All five wells were
drilled and completed successfully with minimal fluid-related problems.

In Russia, the KLA-SHIELD* high-performance water-base drilling fluid
has been used for Nova Energeticheskie Uslugy LLC (Investgeoservis
Managing Company) at the Vostochno-Tarkosalinskoe field operated by
NOVATEK JSC. The system was used to drill intermediate and production
intervals and to drill and core a pilot hole. The application of
KLA-SHIELD technology allowed the operator to reduce non-productive time
and total drilling days to reach total depth. The KLA-SHIELD drilling
fluid ensured hole stability and low washout.

Smith Bits Spear* shale-optimized steel-body PDC drill bits,
commercially introduced at the March 2011 IADC show in Amsterdam, have
already been deployed in shale plays in North America. In the Marcellus
shale, EOG Resources used a Spear drill bit in 7 7/8-in hole drilled
from kick off to final depth in just 3.2 days?saving 2.7 days from the
field average. The unique Spear design allows for stable directional
control during the curve, faster ROP in the lateral, and the durability
to perform both sections in a single run. The bit technology also
reduces the risk of bit balling and plugged nozzles.

In the Santos basin offshore Brazil, Petrobras recently utilized a Smith
Bits MSi813 PDC with ONYX* cutters and SHARC* high-abrasion resistance
geometry. This combination of cutting elements allows faster ROP and
improved bit durability resulting in the section being drilled in two
runs rather than four, and with ROPs of 4m/hr?double the field average.
The faster penetration rate with fewer runs reduced the cost per meter
of drilling in the presalt section by 67%.

Growth in IPM Well Construction activity was evidenced by
technical highlights in Russia and Iraq.

In Russia, integration of Drilling & Measurements and Data & Consulting
Services technologies within an IPM contract led to successful
completion of Phase 2 of a four-well pilot project for Lukoil
Krasnoleninskoye in Western Siberia. The main objective of increased oil
production and reduced water cut in fractured horizontal wells in a
reservoir where a thin barrier between the oil-bearing formation and the
underlying water sand required well placement within 2 m of the top of
the oil sand. Each well was geosteered using PeriScope bed boundary
mapper technology and achieved average net to gross pay ratios of 97%.

New Schlumberger technologies and processes are also contributing to
continuing performance improvements on the Rumaila contract for BP in
Iraq. In addition to an IPM real-time enabled operations cell, casing
drilling, advanced cement slurries, logging-while-drilling services and
cased-hole logs have led to a time reduction of 37% between the first
and second groups of wells drilled. The third group of wells has yielded
further improvement to reach a 50% reduction over the first wells.
Several step changes in procedure implemented over the project
contributed to these savings as well as to enhanced operational safety.

Reservoir Production Group

First-quarter revenue of $2.72 billion decreased 2% sequentially but
increased 44% year-on-year. Pretax operating income of $528 million was
9% lower sequentially but more than tripled year-on-year.

Sequentially, the decrease in Group revenue was largely due to the
impact of geopolitical events in North Africa and the Middle East as
well as to the severe weather in the US and Australia. Excluding these
impacts, Group revenue increased as higher pricing and strong demand for
Well Services technologies in North America more than offset the
non-recurring prior quarter′s IPM gain share payout in North America and
the seasonally lower Artificial Lift and Completions Systems equipment
sales.

First-quarter pretax operating margin decreased 145 bps to 19.4%,
primarily due to the non-repetition of the IPM gain share payout, the
lower Artificial Lift and Completion Systems equipment sales, and the
impact of geopolitical events and weather.

Reservoir Production Group highlights included technology deployments in
a number of key areas.

As part of IPM operations on the Rumaila field in Iraq, Well Services
LiteFIL* cement additive for low-density slurries and CemNET* advanced
fiber technology are helping overcome lost circulation challenges during
9 5/8-in casing cementing operations. The new technologies have led to
reduced time and lower operational risk by allowing the 9 5/8-in jobs to
be performed in a single stage rather than using the two-stage technique
standard in this field since the 1970s.

New Well Services ACTive* in-well live performance technology and Jet
Blaster* jetting scale removal service were used to remove scale in a
natural gas well in Saudi Arabia. The ACTive fiber-optic system provided
real-time bottom-hole pressure measurements for continuous monitoring of
solids within the coiled tubing and the completion annulus?factors
critical for cleanout optimization and stuck pipe prevention. The
wellbore was cleaned of scale at the first attempt enabling a whipstock
to be run successfully.

Well Services Losseal* fiber-based lost-circulation pills were pumped to
control fluid loss in a well offshore Saudi Arabia. Prior to treatment,
a total of 12 standard 100-bbl pills and 7 conventional and thixotropic
cement plugs had been pumped. After 12 days of using standard
treatments, it was decided to proceed with Losseal technology, which
consists of three key components?the base viscous fluid, an optimized
solids package and a dual-fiber material. After treatment, the loss rate
had been reduced by more than 95%.

In Kuwait, Well Services ACTive in-well live performance technology was
deployed in an openhole horizontal well in a carbonate reservoir to
shut-off water production using a combination of mechanical and chemical
isolation techniques. Real-time downhole measurements from the ACTive
fiber-optic cable enabled reliable bridge plug inflation under
sub-hydrostatic conditions and played a vital role in fine-tuning the
gel concentration required to achieve successful cut-off. As a result of
this holistic approach, 4,000 bbl/d of water production was eliminated
with a 30% gain in oil production.

??A combination of new Schlumberger production technologies helped clean
a production well in the Hassi Messaoud field for Sonatrach in Algeria.
ACTive in-well live performance coiled-tubing with fiber-optic
capability was used with the Discovery MLT* multilateral tool to access
both laterals of the well in substatic reservoir conditions. The
integrated technologies minimized orienting time downhole and
successfully restored production.

In Tunisia, new Well Services coiled-tubing technology was introduced on
a number of operations. On one well for BG Tunisia, CTL* coiled-tubing
logging was used to deploy the Wireline FloScan Imager* horizontal and
deviated well production logging system to acquire the data needed to
enable BG Tunisia to reduce water cut in the well. Elsewhere, Vantage*
intelligent coiled-tubing intervention tools were used with PURE* clean
perforating technology in the challenging environment of high
temperature and high hydrogen-sulphide content. A total of six runs were
performed without problem on what was the first Vantage operation in
Tunisia, and the first worldwide under such conditions.

Successes were also scored by Schlumberger Completions and Artificial
Lift.

Offshore Norway, lead vendor Schlumberger Completions installed
flow control valves and gauges in an Oseberg Sør well for Statoil. The
dual-zone multilateral completion included individual flow control
valves for both main bore and lateral, FloWatcher* integrated permanent
production monitoring in the lateral, and a dual WellNet* well
surface-downhole communication system above a Schlumberger production
packer. The 6,900 m. completion string was installed in 6.8 days.

In Azerbaijan a Schlumberger fiber-optic distributed temperature
measurement (DTS) system has been deployed for AzRPU(BP) to monitor
reservoir depletion in the ACG field. The DTS cable was pumped down an
external conduit over the deviated well's 4,635-m length, and then back
to surface using a turnaround loop at total depth. DTS technology
provides near real-time information on fluid entries into the wellbore
avoiding discrete well interventions and production shut-downs. Such
information is essential for maximizing oil recovery from water-flooded
fields like ACG where 17 wells have now been equipped with similar
systems.

In Ecuador, Schlumberger Completions is helping Petroamazonas EP produce
14,540 bbl/d from 8 wells on the Pañacocha field using dual concentric
and selective completion technologies that allow production from two
different pay zones with different pressure gradients.

Schlumberger Artificial Lift has also been awarded a five-year
contract by Pluspetrol Norte S.A. for electrical submersible pump (ESP)
products and services on Blocks 1AB and 8 in Peru. Direct collaboration
efforts with Pluspetrol to continuously improve system performance and
enhance technology application and support led to the contract award.

Schlumberger has successfully installed state-of-the-art Artificial Lift
ESP systems in the Petrobras deepwater Jubarte field in the Campos basin
in Brazil to support efforts to boost production. With close
collaboration with Petrobras, this project incorporated key engineering
developments for superior reliability and higher gas handling, as well
as test and qualification for every individual system.

About Schlumberger

Schlumberger is the world′s leading supplier of technology, integrated
project management and information solutions to customers working in the
oil and gas industry worldwide. Employing approximately 108,000 people
representing over 140 nationalities and working in approximately 80
countries, Schlumberger provides the industry′s widest range of products
and services from exploration through production.

Schlumberger Limited has principal offices in Paris, Houston and The
Hague and reported revenues of $27.45 billion in 2010. For more
information, visit www.slb.com.

*Mark of Schlumberger or of Schlumberger Companies

^?Japan Oil, Gas and Metals National Corporation (JOGMEC),
formerly Japan National Oil Corporation (JNOC), and Schlumberger
collaborated on a research project to develop LWD technology. EcoScope
service uses technology that resulted from this collaboration.

Notes

Schlumberger will hold a conference call to discuss the above
announcement and business outlook on Thursday, April 21, 2011. The call
is scheduled to begin at 7:00 a.m. US Central Time (CT), 8:00 a.m.
Eastern Time (ET). To access the call, which is open to the public,
please contact the conference call operator at +1-800-230-1092 within
North America, or +1-612-332-0228 outside of North America,
approximately 10 minutes prior to the call′s scheduled start time. Ask
for the 'Schlumberger Earnings Conference Call.? At the conclusion of
the conference call an audio replay will be available until May 21, 2011
by dialing +1-800-475-6701 within North America, or +1-320-365-3844
outside of North America, and providing the access code 190450.

The conference call will be webcast simultaneously at www.slb.com/irwebcast
on a listen-only basis. Please log in 15 minutes ahead of time to test
your browser and register for the call. A replay of the webcast will
also be available at the same web site.

Supplemental information in the form of a question and answer document
on this press release and financial schedules is available at www.slb.com/ir.

Schlumberger Limited

Malcolm Theobald, +1 (713) 375-3535

Vice
President of Investor Relations

or

Robert Bergeron, +1 (713)
375-3535

Manager of Investor Relations

investor-relations@slb.com