Schlumberger Announces Second-Quarter 2011 Results

Schlumberger Limited (NYSE:SLB) today reported second-quarter 2011
revenue of $9.62 billion versus $8.72 billion in the first quarter of
2011, and $5.94 billion in the second quarter of 2010.

Income from continuing operations attributable to Schlumberger,
excluding charges, was $1.18 billion?an increase of 22% sequentially and
45% year-on-year. Diluted earnings-per-share from continuing operations,
excluding charges, was $0.87 versus $0.71 in the previous quarter, and
$0.68 in the second quarter of 2010.

Schlumberger recorded charges of $0.05 per share in the second quarter
of 2011 and $0.02 per share in the first quarter of 2011.

Oilfield Services revenue of $8.99 billion increased 11% sequentially
and 51% year-on-year. Pretax segment operating income of $1.75 billion
was up 20% sequentially and 56% year-on-year.

Distribution revenue of $637 million increased 6% sequentially. Pretax
segment operating income of $24 million improved 8% sequentially.

Schlumberger Chairman and CEO Andrew Gould commented, 'Second-quarter
results showed strong growth worldwide. All Product Groups grew at
double-digit rates. In North America, a prolonged Canadian spring
break-up and poor weather in the northwest were offset by very strong
growth in the rest of US land and a significant contribution from
deepwater operations as the rig count increased and renewed interest in
exploration activity in the Gulf of Mexico led to high multiclient
seismic data sales.

Internationally, the trend towards higher deepwater rig count, and
higher exploration spending continued. This activity was coupled with a
surge in development and workover activity as producers moved to
compensate for reduced Libya barrels and to profit from higher prices.
As a result, all Groups had standout product lines in the quarter and
technology sales showed good progress. Strong advances were made in all
Technologies linked to deepwater exploration and complex development
drilling including WesternGeco, Drilling & Measurements, M-I SWACO, and
openhole Wireline and Testing services. The Drilling Group continued to
record strong synergistic revenue with the legacy Smith Bits and
Drilling Tool businesses in many areas of the world. At Reservoir
Production, in addition to the strong North American stimulation market,
high growth rates were experienced internationally as operators moved to
improve production and to test unconventional gas plays in several
markets.

Pricing power in North America pressure pumping remained robust, but
more importantly towards the end of the quarter it became clear that
pricing traction for certain other services?particularly those related
to drilling high-risk deepwater plays or other complex developments?was
in place both in North America and internationally. This is not yet
universal, but a positive trend is in place which should yield results
by the end of the year.

In our second-quarter outlook, we outlined the key constituents of
supply and demand for oil and gas over the next few years and pointed
out that, absent a further leg to the recession, substantial increases
in investment would be necessary to maintain an adequate supply cushion
in an era of political uncertainty. We anticipated that the
international supply response would progressively ramp up over the
second half of 2011. It transpired that the international ramp-up made a
strong start in the second quarter that will continue through the rest
of the year and into 2012.

The continued strength in drilling liquid-rich plays in North America,
coupled with an acceleration in drilling both in exploration and
development internationally, will put considerable strain on the ability
of the service industry to meet activity levels. While it is not
unprecedented that a North American cycle has run concurrently with
increasing activity internationally, the service intensity of drilling
and completing horizontal wells in liquid-rich plays and shale gas
basins has introduced a new dynamic in as much as this activity requires
far more service equipment than was traditionally used in the North
American land market. As a result, the ability of the industry to supply
both the North American and international markets with the required
equipment and people in a concurrent growth phase will be challenged.

Schlumberger, through size, geographical coverage, multinational
workforce, comprehensive product and service portfolio and technology
capability is uniquely placed to help our customers meet these
challenges worldwide.?

Other Events:

• 
  During the quarter, Schlumberger repurchased 8.2 million shares of its
  common stock at an average price of $86.27 for a total purchase price
  of $706.7 million under the stock repurchase program approved by the
  Schlumberger Board of Directors on April 17, 2008. This program has
  been extended by two years to expire at the end of 2013.
  
• 
  On April 5, 2011, Schlumberger completed the divestiture of its Global
  Connectivity Services business. A gain of $0.16 per share was recorded
  in discontinued operations during the second quarter of 2011 relating
  to this divestiture.
  
• 
  On April 28, 2011, Eurasia Drilling Company Limited (EDC) and
  Schlumberger completed the sale and purchase of each other′s drilling
  and service assets and together announced the formation of a Strategic
  Alliance where both will cooperate in the supply of oil and gas
  services to EDC for a five-year period.
  
• 
  On June 29, 2011, Schlumberger announced the planned acquisition from
  Frank Mohn AS of the remaining equity interest in Framo Engineering
  AS, a privately owned Norwegian company specializing in the
  manufacture and sales of products and services related to multiphase
  pumps and subsea pump-systems, multiphase metering systems, and swivel
  and marine systems to the oil and gas industry. Subject to customary
  regulatory approval, the closing of the transaction is anticipated to
  occur in the third quarter of 2011.
  

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 to date follow:

Charges

In addition to financial results determined in accordance with generally
accepted accounting principles (GAAP) this Second-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

Second-quarter revenue of $8.99 billion increased 11% sequentially and
51% year-on-year. Sequentially, revenue increased in all Groups and
across all geographical Areas.

Sequentially, Reservoir Characterization revenue increased
primarily on higher WesternGeco marine proprietary surveys and
multiclient sales, on greater Wireline exploration activity and a
partial recovery from the previous quarter′s exceptional weather and
geopolitical events, and on increased Schlumberger Information Solutions
(SIS) software sales. Drilling revenue increased on higher M-I
SWACO activity, and on stronger Drilling & Measurements technology
penetration, increased pricing and improved job count. Among the
Drilling Technologies, sequential increases were posted by Bits &
Advanced Technologies, Drilling Tools & Remedial and Pathfinder. These
increases, however, were partially offset by lower Integrated Project
Management (IPM) Well Construction in Russia following the sale of the
drilling rig business related to the strategic alliance with EDC in the
Russia/CIS region. Reservoir Production revenue increased
sequentially on higher pricing, capacity additions and improved asset
utilization for Well Services in North America but this increase was
partially reduced by the effects of the spring break-up in Canada and
adverse weather in the Williston basin. Internationally, Well Services
grew on stronger activity in the Middle East and Asia Area. Artificial
Lift and Completions product sales also grew robustly in the second
quarter, particularly in Latin America.

On a geographical basis, North America increased sequentially
despite the impact of the spring break-up in Canada and the weather
issues in the Williston basin. Higher pricing for Well Services
technologies in US land, increasing demand and pricing for M-I SWACO
services in unconventional shale plays and the US Gulf of Mexico, higher
WesternGeco marine proprietary surveys offshore North America, and
strong Drilling Tools & Remedial sales helped propel the percentage
revenue increase to double-digit levels. In Latin America, all
Groups contributed double-digit sequential growth with significant
increases posted by the Venezuela, Trinidad & Tobago; Peru, Colombia &
Ecuador; and Brazil GeoMarkets*. Increased WesternGeco revenue, improved
Drilling & Measurements exploration activity, increased demand for M-I
SWACO services and higher SIS software sales contributed to the
increase. In Europe/CIS/Africa results were driven by higher
WesternGeco and M-I SWACO activities, and increased exploration activity
for Wireline and Testing Services?mainly in the North Sea GeoMarket.
This increase, however, was reduced by lower IPM Well Construction in
Russia following the sale of the drilling rig business. Middle East &
Asia revenue recorded significant double-digit growth across all
Groups with increases led by Wireline, Well Services and Drilling &
Measurements. Significant expansion was experienced in the Saudi Arabia,
Bahrain; Iraq; and East Asia GeoMarkets while the Egypt & East
Mediterranean and Australia, Papua New Guinea GeoMarkets recovered from
the geopolitical and weather events of the previous quarter.

Second-quarter pretax operating income of $1.75 billion increased 20%
sequentially and 56% year-on-year. Pretax operating margin increased 155
basis points (bps) sequentially to 19.5% primarily due to higher
WesternGeco marine proprietary surveys and multiclient sales; increased
Wireline and Drilling & Measurements exploration activities; higher
margin activity for M-I SWACO; higher SIS software sales; and margin
improvements in Bits & Advanced Technologies, Drilling Tools & Remedial
and Pathfinder.

The quarter′s technical highlights were led by the continuing market
penetration of HiWAY* flow-channel hydraulic fracturing technology in
unconventional and tight reservoir applications around the world. HiWAY
technology has now demonstrated the benefits of improving production and
efficiency at lower cost in reservoirs across all four Schlumberger
operating Areas. More than 1,200 stages have been pumped in 2011, saving
over 60,000 tons of proppant compared to standard fracturing techniques.
In North America, more than 700 stages were pumped in the second
quarter, and a total of 15 customers have now deployed the technology
with activity concentrated in the Eagle Ford play in South Texas. In
addition to the operational benefits achieved, the significantly lower
proppant requirements have avoided some 5,300 road hauling journeys and
approximately 700 railroad car trips.

In Russia, one of 10 countries in which HiWAY technology has been
deployed internationally, a pilot trial has been conducted for TNK-BP in
the Zagorskoe field operated by Sorochinskneft. Following treatment, the
well productivity index was more than double that of wells where
conventional fracturing treatments had been performed. More pilot trials
have now taken place in the Orenburgneft Devonian sands as well as in
the Uvat and Nyagan TNK-BP production units.

Market penetration of other new technologies continued. WesternGeco
began acquisition of the Revolution II survey in the Green Canyon area
of the US Gulf of Mexico. This full-azimuth multiclient project over
3,200 km², or 140 outer continental shelf (OCS) blocks, is
the second Dual Coil Shooting* multivessel survey following the success
of the Revolution I project acquired in the Eastern Gulf of Mexico in
late 2010. WesternGeco also completed acquisition of the E-Octopus XIV
wide-azimuth multiclient survey in the Green Canyon area. This survey
consists of 3,660 km², or 157 OCS blocks, and includes
illumination of the Shenzi, Atlantis, and Big Foot discoveries.

Wireline Dielectric Scanner* multifrequency dielectric dispersion
technology has been used for the first time in Kazakhstan for the Ural
Oil and Gas Company to support reservoir studies through the
determination of the oil-water contact in a very tight carbonate
reservoir. Before introduction of the Dielectric Scanner service, this
determination could not be made directly by conventional petrophysical
methods. The new service also provided direct computation of the
cementation exponent needed for accurate hydrocarbon saturation
calculation.

In the Marcellus shale, a Data & Consulting Services reservoir
characterization study based on Schlumberger measurements allowed Ultra
Petroleum to determine that well location, rather than completion
technique, was the major contributor to variable well performance and
enabled Ultra to prioritize its drilling and completion plans for
several wells. The study was performed by integrating 3D surface seismic
with EcoScope*^? and SonicVision* logging-while-drilling data
on 19 laterals, and ECS*, FMI* and SonicScanner* data on seven vertical
pilot wells. The results highlighted sweet spot areas with better
reservoir quality where wells produced superior results compared to
average levels previously seen in the field. This study has helped Ultra
establish criteria that will reduce risk as it continues development of
its Marcellus acreage.

Within the Drilling Group, integration of new products and advanced
services between complementary Smith and Schlumberger Technologies
helped customers improve drilling performance and efficiency.

In the Oklahoma Woodford Shale, Cimarex Energy Co. ran a combination of
Drilling & Measurements PowerDrive Archer* high-build-rate
rotary-steerable-system technology and an engineered Smith
polycrystalline diamond compact (PDC) drill bit to drill a tight
10 °/100-ft curve at a rate of penetration 56% faster than the field
average. In addition, the 4,763-ft horizontal lateral was drilled with a
PowerDrive X5* system in a record 2.2 days. The combination of
PowerDrive* systems and engineered Smith drill bits resulted in a
smoother wellbore with a 16% reduction in drilling-related friction.

In the TNK-BP Verknechonskoe field in Eastern Siberia, advanced
Schlumberger drilling technologies have yielded significant performance
improvements in spite of remote logistics, extreme climate and
challenging geology. A combination of solutions from Drilling &
Measurements, Bits & Advanced Technologies and M-I SWACO has contributed
to this effort. The introduction of PowerDrive X5 technology, for
example, increased rate of penetration (ROP) to an extent that
horizontal sections can be drilled in 3.6 days?saving three days over
standard technology?while allowing the well to be placed within the
sweet spot of the reservoir to improve net-to-gross reservoir exposure
to over 70%. The result has doubled typical well production rates.
Deployment of PowerDrive vorteX* powered rotary steerable systems has
permitted use of new Smith PDC drill bits that have increased ROP by 58%
on average in one formation of hard dolomites while Smith IDEAS*
integrated drillbit design technology has led to bespoke drillbit design
through iterative dynamic modeling. M-I SWACO DuoVis* bio-polymer
drilling fluid has enabled difficult salt intervals to be drilled
continuously with limited washouts and DrillFree* lubricant has improved
torque and drag across critical zones.

New contract awards during the quarter also illustrated the growing
strength of international activity.

LUKOIL Mid East Limited awarded Schlumberger a contract for the
processing and interpretation of newly acquired 3D seismic data with
subsequent construction of a 3D geological model for use in the
development of the West Qurna 2 Oilfield Development Project in Iraq.
The scope of work covers 540 km² of 3D seismic and data from
30 exploration wells. The processing and interpretation teams will work
together to evaluate the field's complicated naturally fractured
carbonate reservoirs.

In Turkmenistan, CNPC International (Turkmenistan) awarded Schlumberger
the majority of the wireline logging tender. The total scope of work
over two years with an optional extension of two further years covers
standard and high-tier wireline logging services. The award represents
the first long-term contract for Schlumberger in the southeast of
Turkmenistan and a new base to support the operation is expected to be
opened later in the year.

Total has awarded Schlumberger a number of contracts for exploration
work on deepwater block CA1 in Brunei. The scope includes surface and
downhole well testing, tubing-conveyed perforating, slickline,
coiled-tubing and sand management services, as well as drilling tools,
directional drilling, measurement- and logging-while-drilling, wireline
logging and mudlogging operations.

The State Oil Company of Azerbaijan (SOCAR) has awarded Schlumberger a
five-year contract for directional drilling, measurement-while-drilling
and logging-while drilling services based on performance during a
nine-month period that allowed Drilling & Measurements to demonstrate
excellence in reliability and service quality. Currently SOCAR operates
20 offshore platforms and 20 land rigs and expects new technology
deployment to improve drilling performance and formation evaluation.

Reservoir Characterization Group

Second-quarter revenue of $2.46 billion was 12% higher sequentially and
increased 7% year-on-year. Pretax operating income of $602 million was
31% higher sequentially and increased 9% year-on-year. Pretax operating
margins increased 348 bps sequentially to 24.5%.

WesternGeco led the sequential increases with revenue and margins up
significantly from higher vessel utilization on proprietary marine
surveys. There was also a significant increase in multiclient sales in
Brazil, the North Sea and Asia. Wireline revenue and margins expanded on
stronger exploration activities in a number of GeoMarkets in Latin
America, Africa, the North Sea and Asia and grew on a partial recovery
from the previous quarter′s geopolitical and weather issues,
particularly in GeoMarkets in North Africa, Middle East and Australia.
Deepwater activity rose in the US Gulf of Mexico but this was offset by
the seasonal spring break-up in Canada. SIS contributed to the
sequential improvements in revenue and margins due to significantly
higher software sales across the Areas.

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

In Angola, Schlumberger ran a full suite of the latest generation
wireline logs on an appraisal program for Angola LNG. Some of the new
technologies introduced on this job included deployment of a
high-tension capstan system as well as the QuickSilver Probe* service
that acquired samples judged purer than previous samples taken in other
wells on the project. In addition, the new InSitu Fluid Analyzer* system
was run to understand reverse compositional grading and vertical
discontinuity within the reservoir. Based on careful and extensive job
planning, specifically designed tool combinations saved one trip in the
well with the program being accomplished in two runs compared to the
three runs expected, thereby saving 12 hours of rig time.

Next-generation downhole fluid analysis equipment and techniques allowed
Marathon to accurately assess varying oil quality, asphaltene
distribution, and reservoir connectivity across multiple sands in a
deepwater US Gulf of Mexico field. In the past, conventional laboratory
analysis of oil samples from these wells did not give conclusive answers
but the combination of laboratory tests with the advanced in situ fluid
analysis capability of the MDT* modular formation dynamics tester
service provided a more definitive answer that will allow Marathon to
plan future development wells with a greater degree of confidence.

In the PEMEX Mexico North Region, Wireline Scanner Family* technologies
confirmed a number of gas zones in a new exploration well. This was the
first time the technologies were run in the Region with the MR Scanner*
expert magnetic resonance service used to confirm the presence of gas in
the reservoir's laminated shaly sands, the Rt Scanner* triaxial
induction service identifying additional net pay, and the Sonic Scanner
acoustic scanning platform providing geomechanical properties to
optimize fracture design. The same logging program has been confirmed
for the next exploration well with the addition of spectroscopy and
spectral gamma ray logging.

In the PEMEX Mexico Marine Region, three gas zones were confirmed in a
deepwater exploration well in which a number of innovative Schlumberger
Wireline technologies were deployed. Sonic Scanner acoustic scanning
platform and PressureXpress* reservoir pressure-while-logging
technologies confirmed gas in three different prospect zones while the
CMR-Plus* high-logging-speed magnetic resonance tool confirmed that the
gas sands did not contain free water and that the bottom zone was not
producible. Further, Rt Scanner triaxial induction technology showed net
pay to be dramatically higher than previously thought. Clean reservoir
fluid samples were obtained by Quicksilver Probe focused extraction of
pure reservoir fluid. PEMEX acknowledged the value of such technologies
in reducing uncertainty in the exploration environment and confirmed the
technologies for future deepwater operations.

Schlumberger Wireline successfully completed a 38-day TuffTRAC* tractor
operation for a major operator offshore Newfoundland, Canada. A record
85,987 m were tractored in 19 runs conveying cement evaluation and sonic
tools, perforating guns and the latest-generation mechanical
intervention service. The operation also deployed the TuffTRAC tandem
service which allowed running through the completion gas lift mandrels.

Shell affiliate, Nederlandse Aardolie Maatschappij B.V. became the first
customer to deploy the new Powerjet Nova* extra-deep penetrating shaped
charge on a natural gas well in the Dutch Sector of the North Sea. The
completion system deployed allowed the well to clean up immediately
after perforating and feed 700,000 m ³/d of gas into the pipeline, which
exceeded expectations. Powerjet Nova charges have demonstrated up to 30%
increased penetration over existing technology in stressed rock
conditions and are considered important for many of the challenging well
conditions found in the North Sea.

In Mexico Marine, Wireline performed the largest walkaway vertical
seismic profile (VSP) acquisition to date for PEMEX to characterize the
reservoir in the Tumut field to accurately define new drilling locations
in a complex geological environment affected by salt tectonics. The
operation, which included 2D walkaway and zero offset VSPs, was designed
to enhance the structural model with high-quality data. A total of 6
lines and 82,000 m were shot using 20-shuttle VSI* vertical seismic
imager technology with interconnected cables between each shuttle. The
Dual Delta air gun cluster and the SWINGS* seismic navigational
positioning system were used to shoot each line every 40 m. The success
of this job was based on extensive job preparation and efficient
mobilization of resources from the UK and the US. PEMEX stated that it
now believes this technology could be implemented for field development
planning on other offshore basins.

In India, WesternGeco successfully deployed the DISCover* acquisition
technique to deliver broadband seismic data in the Kerala-Konkan Basin
for Oil & Natural Gas Corporation Limited (ONGC). This was the first
commercial DISCover project with ONGC and the customer received seismic
data rich in both high and low frequencies for high-definition imaging
to mitigate risk. The prestack time migration and prestack depth
migration processing were carried out in the WesternGeco GeoSolutions
center in Mumbai using advanced workflows and have shown a substantial
improvement in bandwidth compared to legacy data, specifically in
sub-basalt basins.

In Western Australia, Apache awarded WesternGeco the Cambozola 3D marine
seismic survey in the Carnarvon Basin with the objective of improving
reservoir delineation over a recent offshore discovery. The scope of
work includes Q-Marine* point-receiver seismic technology with
simultaneous source acquisition as well as data processing with
proprietary 3D demultiple techniques and depth imaging.

In Azerbaijan, BP awarded Caspian Geophysical a contract for acquisition
of a 3D seismic survey over the Shafag/Asiman block in the Caspian sea
using the M/V Gilavar. Caspian Geophysical is a joint venture between
WesternGeco and SOCAR, the State Oil Company of Azerbaijan.

Testing Services has been awarded a two-year contract by Anadarko
Moçambique Área 1, Ltda to conduct interference tests in an
ultra-deepwater environment offshore Mozambique. The combination of
industry-leading technologies such as the PhaseTester* portable
multiphase well testing equipment and PhaseSampler* multiphase sampling
equipment as well as the EverGreen* minimal environmental impact well
effluent burner will be deployed during the course of the campaign along
with an electro-hydraulic subsea landing string.

In Mexico Marine, Testing Services and Artificial Lift were also awarded
an extended well test on a deepwater, heavy oil exploration project. The
award was based on a single-trip approach that combined Testing Services
IRIS* intelligent remote implementation technology with the eFire*
electronic firing head system, a drillstem test string, and an
electrical submersible pump. Based on the performance of this integrated
approach, PEMEX is considering use of the same system on future heavy
oil deepwater exploration wells.

Also in Mexico Marine, Testing Services applied the world's first flow
assurance study to mitigate hydration risks during gas well testing on a
deepwater exploration well with very complex reservoir lithology. The
surface flowing conditions allowed temperature reduction during the test
by incrementally increasing the amount of condensates flowing.

Statoil has recently approved the Petrel* workflow process software for
seismic interpretation and related geology and geophysical workflows for
its global exploration business. A new contract for Petrel was signed in
June 2011, which provides Statoil access to Petrel software for its
global exploration teams.

Drilling Group

Second-quarter revenue of $3.46 billion was 8% higher sequentially and
127% higher year-on-year. Pretax operating income of $538 million was
15% higher sequentially and increased 88% year-on-year.

Within the Drilling Group, M-I SWACO recorded the largest sequential
revenue increase on favorable higher-margin activity in the North Sea
and Latin America, on continued growth in unconventional shale plays in
North America, on resumption of drilling in the US Gulf of Mexico, and
on the increasing recovery in activity in the Middle East and Asia after
the previous quarter′s geopolitical and weather events. Drilling &
Measurements revenue increased sequentially on higher-margin technology
penetration, superior pricing and improved job count mainly in Latin
America and Middle East and Asia. Drilling Tools & Remedial increased
significantly on higher activity in North America. Pathfinder in US land
also reported increased revenue on higher drilling activity in
unconventional liquid-rich plays while Bits & Advanced Technologies grew
despite the effects of the spring break-up in Canada. IPM Well
Construction continued to expand in Iraq as new contracts began and
drilling efficiency improved, however, this increase was more than
offset by the effect of the sale of the drilling rig business in Russia.

Sequentially, pretax operating margin grew 98 bps to 15.6%. M-I SWACO
margins improved with increased high-margin activity in the North Sea
GeoMarket, Latin America and US Gulf of Mexico. Drilling & Measurements
margins grew due to superior pricing and a more favorable technology
mix. Margins also expanded in Bits & Advanced Technologies, Drilling
Tools & Remedial, and Pathfinder as service mix and pricing both
improved.

During the quarter, a number of highlights confirmed the accelerating
opportunities generated by the combination of Smith and Schlumberger
drilling technologies.

Smith Bits and Drilling & Measurements technologies were deployed in the
Tuha field for PetroChina in a challenging horizontal well to yield
record-breaking performance. PowerDrive vorteX powered rotary steerable
technology in combination with a Smith PDC drill bit successfully
drilled the longest interval and the most rotary steerable hours in a
single run in 6-in hole to save 6 round trips compared to standard
technology and to achieve the longest reservoir exposure ever drilled in
this thin reservoir area. The technology combination was selected based
on the Smith IDEAS integrated drillbit design platform.

Multiple drilling records have been set in drilling four challenging
wells for Talisman Energy Norge AS in the Norwegian sector of the North
Sea while saving a combined total of 19 days versus plan. Excellent
planning, drilling engineering solutions, drilling practices and rotary
steerable integration with new Smith drillbit technology led to the
significant reduction in total drilling time on the Varg and Gyda fields.

Noble Energy has awarded Schlumberger the development and exploration
work on a rig drilling in the Eastern Mediterranean Sea to improve
drilling performance in an expensive deepwater drilling environment.
PowerDrive vorteX and PowerDrive Xceed rotary steerable systems will be
deployed in conjunction with Smith drill bits and other Smith bottomhole
assembly (BHA) components.

In the West Texas Delaware Basin, Anadarko Petroleum Corporation used
cutting-edge drilling and evaluation services to place a 3,500-ft
horizontal wellbore within a structurally variable 12-ft thick target
zone. A Drilling & Measurements PowerDrive rotary steerable assembly in
conjunction with PeriScope* bed boundary mapper technology allowed the
lateral to be drilled in just four days, while keeping the wellbore
entirely within the target zone. MicroScope* advanced resistivity and
imaging-while-drilling with SonicScope* multipole sonic-while-drilling
technologies were used with the drilling assembly to improve fracture
identification and characterization in a tight reservoir in an effort to
help evaluate production variability.

In Brazil, Chevron has extended the Schlumberger directional drilling
contract for two years based on the high quality of services delivered
together with excellent health, safety and environment (HSE) performance
during the 22-well drilling campaign on the initial development phase of
the Frade deepwater field. New technologies deployed included the Scope*
family of services for greater efficiency, improved reliability and
better answers that enhance operational safety during drilling.

Pearl Oil has set new benchmarks for the application of
logging-while-drilling (LWD) technology in the Gulf of Thailand offshore
market using combined Schlumberger EcoScope multifunction
logging-while-drilling, PeriScope bed boundary mapper, and StethoScope*
formation pressure while drilling technologies. Two challenging 6 1/8-in
horizontal laterals were each drilled from casing shoe to total depth in
one run representing an aggregate of 2,813 ft with maximum inclination
of 104 °. During the operation, 43 formation pressure pretests were also
successfully acquired.

On an exploration well in Southeast Asia, Drilling & Measurements
seismicVISION* seismic-while-drilling technology was used to reduce risk
on casing point selection. With initial depth uncertainty from the 2D
surface seismic being as much as 100 m, the operator needed to reduce
this to below 50 m at a depth of over 3,000 m subsea to optimize the
well construction process and successfully navigate an expected pressure
ramp. Using seismicVISION data, the drilling was stopped within 10 m of
the marker thereby enabling safe and successful drilling to total depth
of the well.

In the UAE, Drilling & Measurements StethoScope
formation-pressure-while-drilling technology was successfully deployed
for several companies to enhance operational safety, obtain pressure
measurements in challenging conditions and make informed decisions on
completion design. Working for a major operator in a well environment
with 42% hydrogen sulphide, the technology provided the pressure
measurements needed to optimize mud weight while drilling, thereby
preventing influx of fluid and sour gases. In another well, StethoScope
data verified pressure communication between different faulted blocks in
a slim horizontal lateral while in a well where pressure measurements
were unobtainable using other methods, the StethoScope service overcame
well trajectory and borehole stability challenges to successfully
acquire the needed data. Meanwhile, StethoScope pressure and mobility
measurements recorded in an exploration well for an offshore operator
were used to decide placement of inflow control devices required in the
completion design.

In the Santos Basin offshore Brazil, WARP* fluid technology using unique
micronized weighting material was deployed for Petrobras for the first
time in a difficult high-pressure, high-temperature well that presented
challenging well control conditions. Offset wells in the area had
experienced significant losses due to narrow equivalent circulating
density operating windows. Using WARP technology, the 7-in liner was
successfully run to the bottom with no sag or losses observed. Petrobras
also saw more efficient solids separation using finer screens on primary
shakers.

OGX also used WARP fluid technology as an alternative to heavy brine as
a completion fluid in high-pressure high-temperature wells in Brazil to
replace conventional synthetic-base barite mud that can lead to barite
sag, downhole valve activation problems, and issues of compatibility
with completion tools. With the new technology, there were no problems
opening and closing the valves on the drillstem test string even after
the WARP system had not been circulated for three days prior to the well
test.

Reservoir Production Group

Second-quarter revenue of $3.06 billion increased 13% sequentially and
47% year-on-year. Pretax operating income of $613 million was 16% higher
sequentially and increased 146% year-on-year.

Among Reservoir Production Technologies, Well Services revenue expanded
sequentially in North America on higher pricing, capacity additions and
improved asset utilization as the market transitions to liquid-rich
plays on the strength of the oil price. This increase, however, was
partially reduced by the spring break-up in Canada and adverse weather
in the Williston basin. Internationally, Well Services posted high
double-digit growth in the Middle East and Asia Area in the Saudi
Arabia, Bahrain; Kuwait; Oman; East Asia; and China GeoMarkets.
Completions revenue increased sequentially on higher product sales in
Latin America and robust service and product sales in Saudi Arabia.
Artificial Liftrevenue grew sequentially with all regions
contributing to the increase except for Europe/CIS/Africa due to the
shutdown in Libya.

Sequentially, second-quarter pretax operating margin increased 57 bps to
20.0%. Excluding the impact of the spring break-up in Canada, Well
Services margins grew on pricing gains, better efficiency and
utilization of resources in North America, and improved performance
across the Middle East and Asia due to stronger product sales and
services, and higher vessel activity. Artificial Lift margins increased
through higher sales on land in North America and Russia.

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

Offshore Italy, Well Services successfully pumped FlexSTONE* advanced
flexible cement on eight wells that had been hydraulically fractured and
gravel-packed. FlexSTONE technology enhances wellbore isolation in such
completions through its flexibility that avoids both reduced production
and workover risk. As part of this well integrity solution, Schlumberger
Wireline USI* ultrasonic imager technology was used to confirm the
hydraulic seal of the cement in all eight wells.

In Australia, Well Services Ultra LiteCRETE* very low density cement
combined with CemNET* advanced fiber technology has been successfully
pumped to minimize wellbore invasion to increase the effectiveness of
future stimulation work in coal-gas beds in the Surat Basin. The low
fracture gradient of the formations indicated that ultra low density
cement with optimized particle-size distribution would be needed to
minimize lost circulation problems and limit excessive invasion.

Well Services Losseal* fiber-based lost-circulation pill technology
continued introduction in Middle East markets with the technology being
used in two Joint Operations wells in Kuwait to control lost
circulation. In one well, Losseal was used after standard treatments
failed to reduce openhole losses sufficiently and allowed drilling to
continue without further problems. In the second well, Losseal material
was pumped as spacer before cementing casing with its use enabling
cement returns to surface. Also in Kuwait, Losseal technology was
deployed for Kuwait Oil Company (KOC) in a development well during the
12 1/4-in drilling phase. After four days of trying to stem losses with
standard materials, Losseal treatment was pumped through the BHA and
drill bit to successfully reduce total loss of circulation to a
manageable 5 bbl/h, enabling drilling to continue to total depth with
full returns.

The new Well Services X-11* modular offshore coiled-tubing unit with
active process control and automated safety systems has been
successfully deployed in the North Sea for CNR International. The
flexible, soundproof unit is readily adaptable to many offshore
structures including platforms, floaters and tension leg platforms and
offers the full capabilities of a conventional coiled-tubing unit.
Designed in safer and more efficient skid-mounted packages, the unit
conducted 9 runs over a 33-day period on one well.

In Denmark, Schlumberger deployed CoilFLATE* coiled tubing
through-tubing inflatable packer technology for Maersk Oil in offshore
injector wells on the Dan Field to improve stimulation treatments.
Within the first 100 days of 2011, 25 packers were successfully run with
15 being set in one month on a single well. All packers were retrieved
successfully.

In Saudi Arabia, Well Services performed ACTive* in-well live
performance perforating jobs in two natural gas wells using
fiber-optic-enabled coiled tubing with real-time casing collar locator
and gamma ray measurements for depth control. The first job was
performed with ABRASIJET* hydraulic pipe-cutting and perforating
technology to cut slots by pumping nitrified sand slurry, and the second
using guns with the eFire electronic firing head system. Both jobs were
accomplished successfully and eliminated additional coiled-tubing depth
correlation runs.

Well Services ACTive in-well live performance technology with
fiber-optic distributed temperature sensing (DTS) has been run in Italy
for Eni during coiled-tubing stimulation operations. The DTS thermal
analysis at flowing conditions clearly identified the main production
zones with customized reservoir modeling being used to link reservoir
production behavior with possible flow rates per interval. After
workover operations, the well was put on production without
post-stimulation treatment as water-free oil production of approximately
1,000 m³/d exceeded expectations.

In Guatemala, Well Services ACTive in-well live performance technology
was successfully introduced for Perenco on a well intervention campaign
in the Xan field to monitor stimulation job performance. DTS data were
used to optimize the stimulation treatments in real time based on the
bottom-hole information displayed in the control cabin. Further
deployments of ACTive technology are planned for the second part of 2011.

In Iraq, Well Services has begun coiled-tubing operations in Kurdistan
for Reliance Exploration & Production DMCC in the Sarta field leveraging
existing Smith International and M-I SWACO infrastructure.

In Mexico Marine, the Well Services DeepSTIM stimulation vessel
that started operations for PEMEX in the Bay of Campeche in June 2010
has now performed more than 250 treatments mainly focused in matrix
stimulation, conformance control, and formation and tubing clean outs.
The vessel has shown a highly successful track record in improving
production results and these results are expected to improve even
further this year with the incorporation of new technology into the
current stimulation services portfolio.

In China, CNOOC has awarded Artificial Lift a contract to supply,
install, and provide operational support for electrical submersible pump
(ESP) systems for the LiuHua 4-1 subsea field development project. The
project involves subsea deployment of eight DuaLife* tandem ESP
completion systems with a 14-km tie back to the main LiuHua FPSO. This
will be the world's first multiwell dual ESP system deployment using the
Schlumberger POD system and represents a milestone in the ongoing
development of subsea artificial lift technology. The award was based on
the ability to provide both local and global support as well as the
service quality delivered on the current LiuHua development.

In India, Schlumberger Completions has been awarded an 18-well
intelligent completions contract by ONGC for the Mumbai offshore
operational area. The scope of work covers design, procurement and
installation of the completions. The wells are all to be completed in
openhole with flow control valves monitoring each of three producing
zones using a six-gauge system on a single cable. Six of the wells will
also incorporate DTS technology using the Neon* opto-electric permanent
monitoring cable.

In Azerbaijan, innovative Schlumberger Completions technology has been
deployed on the BP Central Azeri field using a new gravel pack tool
designed for 7 5/8-in casing. Close cooperation between Schlumberger and
BP led to successful deployment of the 411-m completion?believed to be
the longest slimhole gravel pack ever run. The operation was marked by
excellent performance and a well that delivered 25,000 bbl/d?a figure
significantly above the rate expected by BP.

Schlumberger LIVE* digital slickline services were commercially
introduced in April 2011 at the Intervention & Coiled Tubing Association
(ICoTA) Conference & Exhibition in Houston where the technology was
awarded the Intervention Technology Award for 2011. More than 450
digital slickline operations have been performed to date in North
America, Europe and Asia in a wide range of well types, fluids and
deviations including borehole temperatures up to 275 deg F, bottomhole
pressures up to 8,000 psi and well depths down to 16,000 ft. LIVE
digital slickline services have delivered customer-recognized time
savings and real-time optimization through correlation precision, tool
status confirmation and continuous tool control.

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 110,000 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 Friday, July 22, 2011. The call is
scheduled to begin at 8:00 a.m. US Central Time (CT), 9:00 a.m. Eastern
Time (ET). To access the call, which is open to the public, please
contact the conference call operator at +1-800-230-1096 within North
America, or +1-612-332-0107 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 Aug 22, 2011 by
dialing +1-800-475-6701 within North America, or +1-320-365-3844 outside
of North America, and providing the access code 202491.

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

Joy V. Domingo, +1 (713)
375-3535

Manager of Investor Relations

investor-relations@slb.com