Schlumberger Announces Third-Quarter 2011 Results

Schlumberger Limited (NYSE:SLB) today reported third-quarter 2011
revenue of $10.23 billion versus $9.62 billion in the second quarter of
2011, and $6.85 billion in the third quarter of 2010.

Income from continuing operations attributable to Schlumberger,
excluding charges and credits, was $1.32 billion?an increase of 12%
sequentially and 51% year-on-year. Diluted earnings-per-share from
continuing operations, excluding charges and credits, was $0.98 versus
$0.87 in the previous quarter, and $0.70 in the third quarter of 2010.

Schlumberger recorded charges of $0.02 per share in the third quarter of
2011 and $0.05 per share in the second quarter of 2011. During the third
quarter of 2010, Schlumberger recorded a gain of $0.98 per share on its
investment in M-I SWACO as a result of the merger with Smith
International, Inc., which was offset in part by restructuring and
merger-related charges of $0.30 per share in that quarter.

Oilfield Services revenue of $9.55 billion increased 6% sequentially and
44% year-on-year. Pretax segment operating income of $1.93 billion was
up 10% sequentially and 59% year-on-year.

Distribution revenue of $698 million increased 10% sequentially. Pretax
segment operating income of $31 million improved 28% sequentially.

Schlumberger CEO Paal Kibsgaard commented, 'Schlumberger third-quarter
results continued to show solid progress with revenue increasing
sequentially across all Schlumberger Product Groups.

In North America, performance was driven by strong growth on land in
Canada, and in liquids-rich shale basins in the US, while offshore
posted solid growth in the deepwater areas of the Gulf of Mexico.
Further pricing momentum was seen in wireline- and drilling-related
product lines both on land and offshore.

Internationally, deepwater and exploration activity continued to
strengthen with early signs of pricing traction for Wireline and
Drilling & Measurements technologies although overall sequential
international growth could not replicate that of the second quarter, as
we had indicated. All Areas showed sequential growth, with the exception
of the Middle East and Asia, which suffered from WesternGeco marine
vessels transiting between contracts, and seismic land crews mobilizing
for new acquisition surveys. Excluding WesternGeco, MEA also posted
sequential growth.

A number of international regions showed particular strength. These
included Iraq, where strong operational performance and new IPM contract
awards helped drive results; Saudi Arabia, where rigless activity was
particularly strong; Mexico, with higher IPM project work as well as
increased offshore activity; Brazil, both on land and offshore; Russia,
with seasonal expansion and the integration of services from Eurasia;
and Angola as both pre-salt exploration activity and development
activity grew.

Integration with Smith continues to progress with cost and revenue
synergies set to exceed even our revised targets for the year. The
combination of Schlumberger and Smith drilling technologies are driving
drilling performance for our customers and the transaction continued to
be accretive on an earnings per share basis in the quarter.

The current financial turmoil has already resulted in a lower outlook
for oil demand growth in 2012, although demand growth is still expected
to exceed that of 2011. Recent production data, as well as forward
projections indicate that there is a tight cushion of excess oil supply
that will continue to support activity.

Therefore, while the financial turmoil introduces some uncertainty over
near-term activity, we remain confident that any reductions will be
short-lived, and that the outlook for the service industry remains very
positive. We further believe that our customers′ needs to renew
reserves, as evidenced by the recent string of exploration successes
particularly in deepwater offshore areas, favors our broad international
footprint. In addition, the balance between our reservoir
characterization, drilling and production technologies?both in North
America and overseas?will enable us to weather any activity
fluctuations.?

Other Events:

• 
  During the quarter, Schlumberger repurchased 9.9 million shares of its
  common stock at an average price of $81.86 for a total purchase price
  of $811.4 million.
  
• 
  During the quarter, Schlumberger issued $1.1 billion of 1.950%
  five-year notes, $1.6 billion of 3.300% ten-year notes and $300
  million of three-year floating rate notes.
  

• 
  During the quarter, Schlumberger completed the purchase, from Frank
  Mohn AS, of the remaining equity interests 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.
  

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 and Credits

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

Charges and Credits (cont.)

⁽¹⁾Excludes interest included in the product groups and
geographic areas results.

Oilfield Services

Third-quarter revenue of $9.55 billion increased 6% sequentially and 44%
year-on-year. Sequentially, revenue increased in all Groups and across
all geographical Areas with the exception of the Middle East & Asia Area.

Sequentially, Reservoir Characterization revenue increased on
higher Wireline and Testing Services activities on exploration projects
primarily in Brazil, East Asia, Russia and the North Sea as well as from
increased deepwater work in the US Gulf of Mexico. WesternGeco activity
decreased, however, from lower marine vessel utilization due to higher
transit and docking times while moving between contracts. WesternGeco
also declined from reduced land seismic activity while mobilizing crews
and equipment in preparation for a large contract survey in the Middle
East. Drilling revenue increased on higher M-I SWACO activity in
North American unconventional plays. Both Drilling & Measurements and
M-I SWACO saw strong deepwater activity in the US Gulf of Mexico and in
Brazil while Pathfinder revenue grew from a more favorable higher-margin
technology mix on land in the US. The majority of Drilling Technologies
increased sequentially following the spring break-up in Canada. Reservoir
Production revenue increased, driven by the rebound of Well Services
activities in North America following the spring break-up. Well Services
was higher on land in the US due to stronger activity in liquid-rich
plays, capacity additions, and continuing improvement in asset
utilization. Internationally, Well Services grew on stronger activity in
the Latin America and Europe/CIS/Africa Areas, while Artificial Lift
grew robustly in the quarter, particularly in Canada and in Iraq.

On a geographical basis, North America Area revenue increased
sequentially following the seasonal rig count recovery in Canada, higher
activity on land in the US, and increased deepwater work in the US Gulf
of Mexico. All Product Groups registered significant rebounds from the
spring break-up in Canada. Reservoir Production, particularly Well
Services, posted the highest increase as the rebound was augmented by
higher rig count and land activity in the US. Reservoir Characterization
and Drilling activities increased from a better mix of key services in
the unconventional plays in US land and higher deepwater work in the US
Gulf of Mexico. WesternGeco grew on higher Multiclient and Data
Processing sales. In the Latin America Area, strong revenue
growth was posted in the Mexico GeoMarket* due to higher Integrated
Project Management (IPM) well construction project activities on land
and on higher Drilling & Measurements work offshore. Argentina grew from
strong unconventional gas activities that benefited Well Services.
Meanwhile, Brazil experienced strong deepwater and exploration activity
that led to expanded Wireline, Testing Services, Drilling & Measurements
and M-I SWACO services in the GeoMarket although this was offset by the
decline in WesternGeco proprietary marine surveys and multiclient sales.
In the Europe/CIS/Africa Area, results were driven by higher
revenue in the Continental Europe GeoMarket on a combination of strong
drilling activity and fracturing work on unconventional plays in Poland.
Russia/Central Asia saw strong land and offshore exploration activity
benefiting Wireline, Testing Services, Drilling & Measurements and M-I
SWACO Technologies?in addition to the full-quarter effect of the
activity increase generated from the strategic alliance formed with the
Eurasia Drilling Company Limited. The North Sea GeoMarket grew on higher
exploration activity in the UK, Greenland and Denmark. In the Middle
East & Asia Area, revenue declined sequentially due to decreased
WesternGeco activity. The effect of this was partially mitigated by
strong Wireline and Testing Services revenues in the East Asia and China
GeoMarkets. Excluding WesternGeco, the Middle East & Asia Area increased
sequentially driven by strong drilling and production activity in the
Saudi Arabia, Bahrain; Iraq; and East Asia GeoMarkets.

Third-quarter pretax operating income of $1.93 billion increased 10%
sequentially and 59% year-on-year. Pretax operating margin increased 77
basis points (bps) sequentially to 20.2% primarily due to increasing
higher-margin exploration activities that benefited Wireline, Testing
Services, Drilling & Measurements and M-I SWACO. The rebound from the
spring break-up in Canada also contributed significantly to margin
improvements for Well Services and for all Drilling Group Technologies.
These improvements, however, were partially offset by the lower
WesternGeco activity during the quarter.

A number of technology highlights, both in North America and
international areas, underscored the changes in the activity mix as
deepwater and exploration activity continued to strengthen.

In the Pechora Sea in the Russian Arctic, Gazprom-Bureniye, LLC awarded
Schlumberger a tender for the integrated services to drill the first
three wells on Prirazlomnoye oilfield. The contract will include the
full scope of Schlumberger well construction services. Operations will
be conducted from a stationary platform 60 km from the coast and 1,000
km from Murmansk. The general contractor for the drilling operations on
the Priraslomnoye oilfield is Gazprom-Bureniye, LLC, while the license
holder and field operator is Gazprom Neft Shelf, LLC.

In French Guiana, Tullow Oil chose to deploy advanced Wireline InSitu
Fluid Analyzer* technology to assess a hydrocarbon discovery and a new
play in an offshore exploration well. By providing accurate fluid
measurements of hydrocarbon composition, gas-oil ratio, live fluid
density and viscosity, carbon dioxide concentration, fluorescence and
color, the sample acquisition could be optimized. The fluid properties
were used in real time to remove uncertainty on fluid distributions from
evaluation of pressure gradients and petrophysical results. To meet
Tullow Oil′s targets, available tools were rapidly located and shipped
making the operation a logistical and commercial success. Fluid property
characteristics were delivered within 30 minutes of starting to pump out
formation fluid. After the samples had been retrieved and further
analyzed, the customer noted close tolerance to preliminary
pressure-volume-temperature (PVT) results.

Combined Drilling & Measurements technologies formed the most complex
bottomhole assembly ever run while drilling a single run in a deepwater
exploration well offshore Angola. PowerDrive* rotary steerable,
EcoScope* multifunction logging-while-drilling, TeleScope* high-speed
telemetry, and StethoScope* formation-pressure-while-drilling services
together with proVISION* reservoir steering, sonicVISION*
sonic-while-drilling and seismicVISION* seismic-while-drilling
technologies all transmitted data in real time to remotely monitor the
drilling process, optimize pore pressure, perform formation evaluation,
select pressure tests and acquire checkshot times. Net-to-gross and
continuous permeability values were estimated for perforation interval
selection and completion design optimization.

In Iraq, Wireline MSCT* mechanical sidewall coring technology has been
deployed on two exploration wells. Core recovery in the tight and
fractured carbonate reservoirs was 100% for each job and the cores will
yield the petrophysical properties needed to evaluate these difficult
reservoirs accurately. The information will be integrated with other log
data for better reservoir characterization and to subsequently design
optimal testing and completion programs.

Also in Iraq, Techlog* petrophysical analysis software has been
introduced on a project on the Siba field to provide an independent
evaluation on three wells as a first step to evaluate future exploration
wells and build the reservoir simulation model. The workscope includes
recommendations for further data acquisition and technical work, which
will help reduce uncertainties in future field development plans. The
project was conducted jointly by Data & Consulting Services and
Schlumberger Information Solutions.

Elsewhere in Iraq, Schlumberger has been awarded a new contract by
PETRONAS Carigali. The PETRONAS contract covers well testing services
for the Garraf field appraisal and development program that includes two
exploration and nine development wells.

High-temperature wireline production logging services were run in
Thailand to identify fluid type and individual zone contributions in a
PTTEP exploration well where static bottomhole temperatures were
expected to reach 277 degC. The evaluation of potential production was
considered critical to guiding further exploration activity in the area.
Two runs were successfully completed in separate zones of interest using
a combination of production logging sensors including digital fluid
entry tool technology. Onsite evaluation of the recorded data was
consistent with surface measurements and the success of the operation
was underpinned by careful risk mitigation during operational
preparation that included simulation to ensure that the downhole
equipment would have sufficient temperature holding time.

In the Caspian, Well Services expertise and technology helped LUKOIL
develop an economical solution for the stimulation of offshore fields
where existing platform infrastructure did not provide sufficient deck
space. Using a supply vessel provided by LUKOIL, Schlumberger supplied
FlexSTIM* modular offshore stimulation equipment and engineering to
ensure sea fastening, stability and safety. Equipment montage, test and
certification were performed in Astrakhan to meet a tight three-week
schedule. One exploration well has already been stimulated with FlexSTIM
technology in a timely, safe and efficient manner. Early production data
are encouraging and FlexSTIM technology has become an accepted solution
for Caspian Sea field development.

In Brazil, the Schlumberger Brazil Research and Geoengineering Center
(BRGC) has successfully performed its first fluid analysis on reservoir
fluid samples acquired by Testing Services for PVT measurement and fluid
characterization on an Anadarko field. This is an important milestone
for BRGC, which was inaugurated in November 2010, as it begins support
for clients engaged in pre-salt exploration and development.

Exploration technology highlights also included operations in shale gas
areas, particularly outside North America.

In West Bengal, India, ONGC created an exploration landmark when gas
flowed out from the Barren Measure shale at a depth of around 1700 m in
its first R&D well. Schlumberger collaborated with ONGC to provide
services and technology. As part of the project, Data & Consulting
Services defined four exploratory well locations in two sub-basins in
the Damodar Valley and provided technical expertise during operations
while IPM managed drilling and field operations. All four wells have
been drilled, and the first well was hydraulically fractured following a
comprehensive data acquisition and coring program to quantify reservoir
and completion quality with TerraTek core analysis. Based on detailed
evaluation of the formation properties, which were significantly
different to commercial US shale plays, it was concluded that the
original fracture design could be reduced in scale and use 80% less
proppant. The first well to be completed tested gas at surface during
flowback operations. Close cooperation between Schlumberger Technologies
transformed this project from a TerraTek-based core evaluation to a full
Schlumberger integrated execution and evaluation project. This
successful R&D pilot testing of the first-ever shale gas on surface
opened up new opportunities to meet India′s energy needs.

In Poland, integrated Drilling Group technologies have been deployed for
Lane Energy to drill the Warblino-LE-1H horizontal well to enable
detailed core and log analysis of the lower gas-bearing shales.
PathFinder measurement-while-drilling, mud motor and resistivity tools
were used to drill the 17 1/2-in and 12 1/4-in upper hole sections as
well as the 8 1/2-in curve section, while Drilling & Measurements
PowerDrive X6*, EcoScope, TeleScope and SonicVision advanced rotary
steerable and logging-while-drilling technologies were utilized to drill
and position the 8 1/2-in lateral section. Successful delivery of the
well enabled Schlumberger to demonstrate both technology platforms in
the region?backed by successful transfer of relevant shale drilling
expertise from North America to Europe and operational integration of
Pathfinder and Drilling & Measurements services.

In Poland, Well Services technology was also used to successfully
complete hydraulic fracturing operations in a horizontal shale gas well
for Lane Energy. The well was completed with 13 stages using operational
best practices acquired through unconventional gas operations worldwide.

Reservoir Characterization Group

Third-quarter revenue of $2.49 billion was 1% higher sequentially and
increased 9% year-on-year. Pretax operating income of $610 million was
1% higher sequentially and increased 16% year-on-year. Pretax operating
margins remained unchanged sequentially at a strong 24.5%.

Wireline and Testing Services posted significant sequential increases
with revenue and margins up on stronger offshore exploration activities
in Brazil, East Asia, Russia and the North Sea as well as from increased
deepwater work in the US Gulf of Mexico. WesternGeco activity decreased,
however, from lower marine vessel utilization due to higher transit and
docking times while moving between contracts. WesternGeco also declined
from reduced land seismic activity while mobilizing crews and equipment
in preparation for a large contract survey in the Middle East.

Sequentially, pretax operating margins remained unchanged at 24.5% as
significant margin improvements in Wireline and Testing Services from
strong exploration activities were largely offset by the margin declines
in WesternGeco.

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

In the Wolfbone formation in West Texas, Wireline Dielectric Scanner*
technology was deployed for operator J. Cleo Thompson to identify
productive intervals in complex lithology, low porosity zones. Data &
Consulting Services helped evaluate the data using ELAN* multimineral
log analysis software to guide the operator's decision to eliminate a
lower zone in future development wells that would yield cost savings of
approximately 15% per well. The oil-bearing Wolfbone reservoir, where
optimal economics are crucial, can produce significant amounts of water.

In Venezuela, Schlumberger Wireline successfully deployed Scanner
Family* services for PDVSA West Lake Maracaibo in the Tia Juana heavy
oil field. Dielectric Scanner multifrequency dielectric dispersion
measurements proved critical to obtaining total water volume, estimating
salinities and assessing oil mobility, while MR Scanner* expert magnetic
resonance technology was key to identifying free water fraction,
assessing viscosity and determining reservoir fluids displaced by the
drilling process.

In Venezuela East, PDVSA Anaco Gas incorporated Wireline Scanner Family
services to reduce uncertainties in their reservoir evaluation process
due to variable water salinity environments and complex laminated
lithologies. MR Scanner magnetic resonance technology was critical for
fluids identification?clearly distinguishing between gas, condensate,
oil and water?while the Rt Scanner* triaxial induction tool determined
anisotropy values in the main reservoirs.

In Ecuador, Schlumberger Wireline Dielectric Scanner multifrequency
dielectric dispersion technology helped Petroamazonas EP in finding oil
in a new reservoir that had been difficult to evaluate and characterize
with conventional technologies. The newly introduced Dielectric Scanner
service has already provided great value in Petroamazonas fields.

In the Neutral Zone between Kuwait and Saudi Arabia, advanced real-time
Wireline fluid sampling technology has been successfully deployed to
recover heavy oil samples from shallow, low-mobility carbonate
reservoirs with low formation pressures. An MDT* modular formation
dynamics tester system with extended dual packers and an InSitu Fluid
Analyzer module provided accurate downhole analysis of fluid viscosity,
density, flowing fluid resistivity, fluorescence and pH as well as
flowline pressure and temperature. Sampling intervals were chosen from
available openhole logs that included FMI* formation microimager and MR
Scanner magnetic resonance technologies. Early detection of heavy oil
arrival was clearly seen and judged critical to success. Further jobs
that establish the technology in Kuwait are now in planning.

In the UK North Sea, new Wireline perforating technology was deployed on
the Taqa Bratani Falcon development well. After evaluating perforating
options using SPAN* perforating analysis, PowerJet Nova*
extra-deep-penetrating shaped charge technology was selected as its
design, optimized for stressed-rock, can dramatically increase
penetration and formation contact. Post-perforation production of the
Falcon well showed productivity more than 10% above best expectation,
reaching 9,900 bbl/d. Following the success of this well, Taqa Bratani
have requested PowerJet Nova perforations on two additional wells.

An innovative approach to identify and evaluate bypassed reservoirs in
offshore fields in the Adriatic Sea has now been deployed by Eni in
wells in which depleted zones overlay unproduced thinly laminated
natural gas reservoirs. Before introduction of a new high-tension
wireline logging technique, formation evaluation was performed using
conventional wireline units which were not capable of avoiding frequent
cable and tool sticking and consequent fishing operations. Eni and
Schlumberger worked together to ensure that the rigs used could
withstand the higher loads imposed by new logging units and extra strong
cables with the result that sticking problems were drastically reduced
with consequent operational time savings and shorter times to
production. As part of the new approach, a new wireline formation
testing approach for thin beds was also deployed using a dual packer
string with downhole fluid analysis capability that included fluid
density measurement.

WesternGeco has acquired 14,000km² of multiazimuth data as
part of the BP Nile Delta seismic program. Conducted by the Geco Eagle,
the 11-month campaign was the largest survey ever acquired in the Nile
Delta and continues the trend towards high-end, full-azimuth seismic
acquisition techniques in the Middle East. Acquisition was completed
ahead of schedule and a strong emphasis on health, safety and
environment led to zero recordable incidents. The data quality confirms
the value of increased azimuthal distribution, which is the imaging and
viewing of complex hydrocarbon reservoirs from multiple perspectives.

Offshore Australia, WesternGeco has completed the first commercial
survey for Apache using the SimSource* simultaneous seismic source
acquisition and processing technique. The project follows Apache′s
successful evaluation of the technique in the North Sea, and includes
Q-Marine* point-receiver marine seismic system technology in conjunction
with SimSource acquisition followed by data processing in Perth. The
SimSource technique can improve final data quality by increasing the
density of the raw data acquired, without extending the project duration.

BP has awarded WesternGeco a contract for three additional ocean bottom
cable surveys in the North Sea using Q-Seabed* technology. The surveys
will commence in Q2 2012 following completion of an extensive
acquisition program for BP Trinidad and Tobago. The North Sea surveys
are expected to last up to four months.

Schlumberger inaugurated the WesternGeco Penang Product Center in
Malaysia, a world-class facility established to support global demand
for geophysical services and expand manufacturing presence in Asia. The
center is dedicated to the manufacturing and repair of high-end
geophysical equipment and adds capacity to an expanding global network
of manufacturing facilities.

In Malaysia, Wireline production services technologies were utilized for
PETRONAS Carigali as part of a workover program in a highly deviated
well. In order to remove the tubing strings from the well, the MaxTRAC*
downhole well tractor system was used to convey a sequence of tubing
cutter services to cut the strings above their packers to enable their
successful retrieval. The TuffTRAC* cased-hole services tractor was then
deployed to monitor casing condition and cement quality with the USI*
ultrasonic imager, and to evaluate residual oil saturation using the
RST* reservoir saturation tool prior to completion of the targeted zones
with tubing-conveyed perforation. Overall, 15 tractor runs for a total
of 50,000 ft were performed without problem, clearly demonstrating the
reliability and efficiency of the technology as well as its value in
rig-time savings.

ACTive PS* integrated coiled tubing production services technology has
now been introduced in Asia through a job for PETRONAS Carigali on the
Dulang B platform offshore West Malaysia. The operation was run to
evaluate cement isolation as part of a workover plan to improve
production. ACTive* technology provided a practical solution to running
the Wireline SCMT* slim cement mapping tool on coiled tubing after
squeezing cement to confirm water shut-off. The successful job also
represents the first time that this Wireline technology has been
conveyed by the ACTive system?opening other opportunities for such
cost-effective deployment.

Drilling Group

Third-quarter revenue of $3.68 billion was 6% higher sequentially and
79% higher year-on-year. Pretax operating income of $613 million was 14%
higher sequentially and increased 99% year-on-year.

Among Drilling Group Technologies, M-I SWACO recorded the largest
sequential revenue increase through continued growth in unconventional
shale plays on land in the US with higher asset utilization, as well as
from the seasonal rig count recovery in Canada and Russia, and the
increased deepwater activity in the US Gulf of Mexico and Brazil.
Drilling & Measurements revenue increased sequentially on the strong
summer drilling campaign in Russia and stronger deepwater activities in
the US Gulf of Mexico and Brazil and increased shelf activity in Mexico.
Pathfinder reported increased revenue from a more favorable technology
mix on land in the US. In addition, Pathfinder, Geoservices and Bits &
Advanced Technologies registered activity rebounds following the spring
break-up in Canada.

Sequentially, pretax operating margins grew 111 bps to 16.7% driven by
the ?rebound in activity in Canada, an improved technology mix, and
further integration and expansion of Smith and Schlumberger drilling
technologies. Bits & Advanced Technologies contributed to this
improvement with increased sales and rentals of higher-margin drill bits
while Pathfinder improved on higher-technology integration with Drilling
& Measurements. M-I SWACO margins improved through increased exploration
activities in the US Gulf of Mexico, Russia and Brazil, as well as
through the seasonal rig count recovery in Canada. Better pricing on IPM
land projects in Mexico and improved efficiencies on a well construction
project in Algeria further contributed to this result.

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

In South Texas, operator Murphy Oil saved 4 1/2 days of drilling time
versus neighboring wells in its Eagle Ford prospect by utilizing
PowerDrive Archer* high build rate rotary steerable technology combined
with a Smith MDSi613 polycrystalline diamond compact cutter (PDC) bit.
The PowerDrive Archer rotary steerable assembly enabled a tight 8 ?/100
ft curve to be drilled at 38 ft/hr compared to 12 ft/hr in offset wells.
In addition, the smooth wellbore trajectory associated with rotary
steerable systems improved the ease of completion installation.

In East Texas, operator Anadarko Petroleum ran the PowerDrive Archer
high build rate rotary steerable system combined with a Smith SDi711
Spear* shale-optimized steel-body PDC drill bit to drill the 6 3/4-in
curve on a recent Haynesville shale well. With traditional downhole
motors, Haynesville curves typically take five to six days to land. With
the combined PowerDrive Archer and Smith Bits technologies, the section
was landed in just three days. PowerDrive Archer technology allows curve
sections to be drilled at higher buildup rates than other rotary
steerable systems and increases rate of penetration (ROP) significantly.

In Iraq, as part of IPM operations on the Rumaila field for the Rumaila
Operating Organization, Drilling & Measurements PowerPak* ERT
high-performance steerable motors have been deployed in combination with
Smith ONYX* PDC drill bits and M-I SWACO drilling fluids to drill the
geologically challenging 8 1/2-in hole section. This was drilled in one
run, with no service quality incidents, at a rate of penetration that
reached section total depth three days ahead of plan.

In South Texas, Drilling Group technologies helped Forest Oil save three
days rig time on a well in the Lobo sandstone reservoir. The combination
of Smith Bits 8 3/4-in MSi516 SHARC* high-abrasion-resistance PDC drill
bit technology with the Drilling & Measurements PowerV* vertical
drilling system doubled rate of penetration relative to offset median
drill time in the 7,694-ft interval.

In Ecuador, the integrated technologies from Schlumberger Drilling &
Measurements, Smith Bits and M-I SWACO helped Andes Petroleum drill the
well 10 days under plan. Close collaboration between Schlumberger and
Andes Petroleum resulted in an efficient operation that saved on both
rig time and logistics. The PowerDrive Xceed* rotary-steerable
technology run as part of the bottomhole assembly has been selected for
future wells for Andes Petroleum.

In the Daqing Field, North China, Drilling & Measurements PowerDrive
Xceed rotary steerable technology for harsh and rugged environments
helped PetroChina complete a 2,660-m horizontal section in a record time
of 275 hours, corresponding to an overall 40% improvement in ROP
compared to an offset well. The section was drilled with M-I SWACO
MEGADRIL* invert oil-based mud that helped improve wellbore stability,
lowered equivalent circulating density and provided excellent lubricity.

In Iraq, Gazprom Neft Badra, B.V. has awarded Schlumberger a 3-year
contract for well construction services covering 11 wells and requiring
3 drilling rigs. The contract includes technologies from IPM, Bits &
Advanced Technologies, Drilling & Measurements, Geoservices, M-I SWACO,
Wireline and Well Services, as well as the supply of third-party
drilling rigs, coring, casing and well heads.

In Central China, Drilling & Measurements MicroScope resistivity
imaging-while-drilling technology helped PetroChina SWOGC SuiNing
identify structural dips, faults and fractures for optimum well
placement and production enhancement in a 810-m horizontal section in
its first carbonate oil reservoir horizontal well development. The
MicroScope service was run as part of a series of Drilling &
Measurements technologies that completed the section in one run that
totaled 265 circulating and 155 drilling hours.

In Oman, Drilling & Measurements MicroScope* resistivity
imaging-while-drilling technology in combination with the PeriScope* bed
boundary mapper tool was used for the first time to help Consolidated
Contractors Energy Development (CCED) position a well in a thin, highly
fractured sand reservoir to secure maximum reservoir contact. As a
result, 60% of the section was placed within the target zone?a first in
this highly challenging reservoir.

In Indonesia, joint M-I SWACO and Schlumberger Sand Management Services
cooperation helped Kangean Energy eliminate incompatibility issues
between drilling and completion fluids on a subsea horizontal
development well to be gravel-packed in openhole in the Terang field.
The fluid required to drill the reservoir needed to be capable of
densities greater than 11 ppg while providing shale inhibition and good
rheological properties for hole cleaning and stability. The initial
FloPro* NT fluid design using calcium chloride base brine was rejected
as this would have been incompatible with the Schlumberger ClearPac*
gravel pack fluid and MudSOLV* filtercake removal systems needed in
gravel packing. Based on laboratory tests in Kuala Lumpur, a change to
sodium base brine with Kla-Stop* additive for shale inhibition was
designed and successfully tested to ensure compatibility with all other
fluids to be employed.

Offshore Azerbaijan, the M-I SWACO Ultradril* higher performance
water-base mud system was successfully used to drill the 26-in and 28-in
top-hole sections in a BP well using dual gradient drilling techniques.
The surface formations are known to be particularly problematic with
salt water flows, reactive claystone formations, bit balling and stuck
pipe risks, but the Ultradril system ensured the sections were drilled
with minimal non-productive time.

In Egypt, M-I SWACO wellbore clean-up technologies were deployed on the
re-entry of the Taurt 6 subsea well for PhP?a joint venture of Egypt
Natural Gas Holding Company (EGAS), British Petroleum (BP) and
International Egypt Oil Company (IEOC)?when the high pressure riser
system was unable to boost the flow rate to bring suspended debris and
solids to the surface. First, the Well Commander* tool was deployed
above the subsea wellhead to boost the flow rate of the fluids inside
the 21-in riser to jet the BOPs in one run. Then, M-I SWACO Riser
Cleaning Tool* technology was used in conjunction with a 16-in short
trip jetting sub to give jetting action across the BOP stack to dislodge
any debris from the BOP cavities. Finally, the Well Patroller* advanced
wellbore capture tool was utilized to catch the dislodged debris and
solids removed by the jetting and brushing operation.

Reservoir Production Group

Third-quarter revenue of $3.37 billion increased 10% sequentially and
47% year-on-year. Pretax operating income of $707 million was 16% higher
sequentially and increased 87% year-on-year.

Among Reservoir Production Group Technologies, Well Services sequential
revenue growth in North America was driven by the rebound from the
spring break-up in Canada, stronger activity in liquids-rich
unconventional plays, capacity additions and continuing improvements in
asset utilization. Internationally, Well Services posted high
double-digit growth in Latin America from higher stimulation and
coiled-tubing activities in Argentina, Mexico, Venezuela and Brazil.
Europe/CIS/Africa increased significantly from shale fracturing services
in Poland, increased deepwater cementing work in the Black Sea, and
strong land activities in Russia. In addition, strong stimulation vessel
activity was seen in the Nigeria and the Gulf of Guinea Africa
GeoMarket. Artificial Liftrevenue grew sequentially across all
Areas led by the North America and the Middle East & Asia Areas.

Sequentially, third-quarter pretax operating margins increased 96 bps to
21.0% as Well Services activity in Canada rebounded following the end of
the spring break-up. In addition, Well Services exacted better cost
efficiency and asset utilization on land in the US and in Russia and
recorded increased higher-margin stimulation activities in the
Europe/CIS/Africa Area.

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

In North Africa, Well Services HiWAY* flow-channel hydraulic fracture
technology was pumped for Eni. After thorough well candidate screening
and final well preparation, the treatment was executed flawlessly using
roughly one half the amount of proppant typically required on a
conventional job. Initial indications of the success of the technique in
this well included rapid cleanup and promising early production results.
Additional wells are being studied for further implementation of the
HiWAY technique in the near future.

In West Siberia, Well Services HiWAY flow-channel hydraulic fracturing
and AbrasiFRAC* abrasive perforating and fracturing technologies have
been deployed for Rosneft as a cost-effective and efficient solution to
complete wells in the Priobskoe multilayered reservoir. Integration of
the technologies is leading to higher productivity making the
combination an economically practical option to develop marginal targets
not possible with conventional technology.

In North Dakota, operator Petro Hunt utilized Well Services HiWAY
flow-channel fracturing technology to stimulate two wells in the Three
Forks and Middle Bakken formations. After treatment, the wells' initial
production rates were 50% to 100% higher than those of neighboring
wells. Current production at the Three Forks well is 25% higher than
similar wells completed with traditional stimulation techniques.

A large independent operator in South Texas realized significant
production and efficiency benefits from a recent HiWAY stimulation
treatment in the Eagle Ford play. Two of the four wells on the pad were
completed conventionally, and two were completed with HiWAY technology.
In the first 60 days after stimulation, the HiWAY wells produced 43% and
61% more condensate and gas at higher flowing pressure than the wells
completed with conventional stimulation techniques. Furthermore, 10
million gallons of water and 2.6 million pounds of proppant were saved
in these two wells.

In the Barnett shale, Chesapeake Energy was the first operator to apply
the HiWAY channel fracturing technique by completing a well in late
July. The HiWAY technique was applied on one well in a three-well pad so
that direct offset comparisons could be made. Initial production results
were encouraging, with Chesapeake and Schlumberger agreeing to conduct a
multiple well study before publishing production data. The HiWAY
fracture geometry was monitored using the Schlumberger StimMAP*
microseisimic monitoring service that showed fracture geometries using
cross-linked HiWAY fluids to be very similar to slickwater-treated
offsets but that height growth was not an issue with HiWAY technology.
Additionally, Chesapeake noted savings associated with the reduced water
and proppant used during the HiWAY completions.

Following a successful field test in Canada, Wyatt Oil & Gas continued a
successful multistage stimulation program completing 5 wells with a
total of 38 stages utilizing the FALCON* openhole multistage stimulation
fracturing system for uncemented applications. Flawless execution of the
system ensured a rapid and efficient stimulation program.

In Colombia, Schlumberger Well Services has successfully introduced OCA*
organic clay stimulation in the Barco formation in the Cusiana and
Buenos Aires fields for Equion Energia Limited. On the first two wells
where this technology was applied, oil production increased by
approximately 500 bbl/d on each well. Based on these results, the client
has planned a stimulation campaign for eight more wells. Also in
Colombia, Well Services and Equion Energia Limited technical staff
selected a candidate on the Buenos Aires field to deploy ABRASIJET*
hydraulic pipe-cutting and perforating technology to perforate five
stages on a single coiled-tubing run in a gas injector well. The results
of this successful technology introduction have now led to plans to
combine ABRASIJET and AbrasiFRAC services on future matrix stimulation
operations in the country.

On the Abramut field in Romania, Well Services FUTUR* active set-cement
technology was deployed on cement jobs that historically had been
difficult to complete without annular pressure. The FUTUR cement was
pumped as a buffer to provide a seal that prevented gas migration. As a
result, remedial operations were unnecessary with consequent rig time
savings. The technology is now planned for deployment for the liner
overlap on the same well and is being considered for similar wells in
the future.

In Uganda, Schlumberger Completions installed the first IntelliZone
Compact* modular multizonal management for Tullow Uganda Operations Pty
Ltd. as part of an efficient single-trip system to control flow and to
monitor production during planned production testing. Compared to
conventional systems, the IntelliZone system for each test is delivered
to the wellsite pre-configured and pre-tested to enable fast and
reliable deployment without the interface complexity inherent with
conventional flow control and monitoring systems that rely on disparate
components. The ?Tullow Uganda Operations Pty Ltd. system, which was
delivered with a demanding eight-week lead time, was deployed safely and
successfully.

In Bolivia, the Schlumberger Completions COLOSSUS* rotational liner
hanger system was used in the San Alberto field operated by Petrobras
in ?consortium with YPFB-Andina and Total to run the first 5-in by 7-in
assembly using a new 5-in hydraulic running tool at a target measured
depth record of 18,635 ft. The new running tool was fully tested at the
Schlumberger Cameron test facility in record time demonstrating the
capability of the operation teams. In a second well, installation of a
liner hanger at 17,621 ft measured depth set a new Schlumberger depth
record for 7-in by 9 5/8-in tool sizes.

In Argentina, YPF S.A. has utilized Schlumberger Completions COPPERHEAD*
drillable bridge and flow-through frac plug technology with over 55
plugs now having been deployed in 19 wells in both shale and tight-sand
reservoirs. Other operators in Argentina have also successfully run
COPPERHEAD Extreme technology in high pressure and temperature wells in
unconventional reservoirs leading to the successful development of those
reservoirs. COPPERHEAD technology was developed by the Smith Completions
engineering group.

Schlumberger Artificial Lift has successfully completed the first
electrical submersible pump (ESP) drillstem test for Chevron in Angola
as part of an integrated project combining Artificial Lift, Testing and
Completions technologies. The test objective was to appraise the
Likouala and Vermelha reservoirs in the Lifua Field over a wide range of
potential flow rates and involved six separate completion trips,
perforation and testing of two separate zones, and the use of the ESP to
perform a step-rate test. Zero time was lost on a total operating time
of more than 500 hours.

In the UK North Sea, Artificial Lift successfully deployed REDA Maximus*
ESP technology in a new well on the EnQuest Thistle Alpha installation.
Initial well production was sufficient to result in the highest daily
production from the Thistle field for several years. The commencement of
ESP operation on this well was an important achievement in the
implementation of EnQuest's Late Life Extension strategy for the field.

Also in the UK sector of the North Sea, Valiant Petroleum has awarded
Artificial Lift a contract to supply, install, and provide operational
support for ESP systems for the Causeway subsea field development
project. The project involves subsea deployment of two DualLife* tandem
ESP completion systems with a 16-km tie back to the North Cormorant
platform. This will be the longest subsea tieback deployment using the
Schlumberger dual POD system. The award was based on the ability to
provide an integrated technology solution covering ESPs, variable speed
drives and electrical connectors as well as a proven track record in
subsea installations worldwide.

In the US, Noble Energy ?recently awarded Smith Lift a 30-unit order for
the hydraulic diaphragm insert (HDI) pump. Key decision criteria in
favor of HDI are reductions in maintenance and operational support along
with proven performance during a 90-day three-well trial. The HDI pump
is suitable for vertical wells less than 3000 ft in depth and less than
50 bbl/d of water.

In Ecuador, Well Services ScavengerPlus* scavenger slurry stabilizer was
introduced for EP Petroecuador to improve zonal isolation on large
openhole sections through a secondary production reservoir. Increased
mud removal, wellbore stability and zonal isolation together with safer
operations have led to this new technology being selected for all future
9 5/8-in casing cement jobs for this client.

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, October 21, 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 +1-800-230-1059 within
North America, or +1-612-234-9959 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 November 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 211522.

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 information 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