The Big Blue Goes Green

Schlumberger addresses environmental challenges in highly regulated international markets.

SCHLUMBERGER

Schlumberger is the world’s leading provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. Working in more than 85 countries and employing approximately 100,000 people who represent over 140 nationalities. 1

Schlumberger culture is rooted in environmental and social stewardship of the country in which operates. 2 The company believes in hiring local talent that better understand the challenges of the market and integrating the local workforce with internationals colleagues to create a diverse mix of talents. Development of local workforce goes along with creating deep expertise and understanding of increasingly challenging and intricate local government regulation aimed at addressing climate change.

In North America, for example, engineering and deployment of surface vehicles for hydraulic fracturing applications have been heavily affected by emission standards issued by the Federal Government. Revised standards lead to structural modification to the engines provided by third party suppliers, which in turn affect Schlumberger’s equipment design. Teams are assembled to proactively work with engine manufactures to redesign the equipment around the new engine and be in compliance, in some cases, years before the regulation’s directions become mandatory.

 

GLOBAL STEWARDSHIP

In 2014 the company launched the Global Stewardship initiative to consolidate and standardize reporting on Schlumberger’s action taken to reduce emission, waste and ultimately reduce environmental footprint. The report is developed according to Global Reporting Initiative (GRI). 3

Schlumberger is working to improve greenhouse gas emissions performance and to increase its ability to manage emissions through new technologies, better data collection, and more accurate measurement. Progresses are reported annually to CDP Climate, which rates companies on disclosure and performance. Schlumberger proudly reported a 2015 score of 94, up from 2014 score of 84. 4

Performance Data

Continuously seeking opportunities to reduce direct consumption of resources, reduce greenhouse gas emissions, and reduce the quantity of wastes we generate. In 2015, Schlumberger continued to improve internal data-gathering procedures, database systems, and reporting practices for greenhouse gas emissions, water consumption, electricity generation, and waste. Each year continuing to increase the number of sources from which the company is able to track data. 5 

Technology Advantage

Schlumberger focuses heavily on technology to deliver its client the best services. Additionally, it creates values for the customer by using fewer resources, improving efficiencies, reducing emission and minimizing water consumption. Schlumberger technologies and processes also address sustainability issues by meeting or exceeding challenging international regulatory requirements and by addressing the growing expectations of society for cleaner services and products. 6

Water Use Optimization is an example of a newly developed technology (NT5) that brings together financial savings, reduce operational complexity and environmental benefits. Through the HiWay technology the company was able to reduce water usage requirement during hydraulic fracturing via engineering solutions. Water volumes was reduced by 35%, while increasing well productivity by 26%. 7

Employee Engagement

In 2010 Schlumberger launched the Lean and Green program to leverage its employee technical abilities and reduce resource consumption, build green facilities and impact local communities.

The program achieved its annual objective in 2015, with 29 locations undertaking a total of 34 projects to increase efficiency and generate substantial financial and environmental savings.

The program positively engages employees across disciplines and provides a means to showcase innovations, environmental technologies, and best practices for environmental improvement. The return on investment for most projects is achieved within one to three years and more importantly, the majority of the initiatives will continue to benefit the environment well into the future. 8

NEXT STEPS

Schlumberger has already been impacted by increasingly stringent regulations that worldwide governments are putting in place to mitigate and reverse the risk associated with global warming. The company approached these challenging leveraging its core strengths and values: People, Technology and Profit. While focusing on technological innovation to maintain a healthy profit for shareholder, Schlumberger has been able to focus on efficiency and carbon footprint reduction and at the same time inform and motivate its employee to address environmental issues in both the professional and private sphere.

Moving forward the company should increasingly engage and partner with its clients to provide outstanding value while preserving the environment. Demonstrating to the world the impact that Schlumberger can achieve by creating strong partnership with national and international oil companies would be the best way to defend an industry constantly under attack.

Schlumberger can take substantive actions to further demonstrate its efforts in defense of the environment. The company can dream big and aim at developing a full self-sustained rig. The company invested $1.1B in 2015 in R&D, part of this budget can be dedicated to renewable energy generation and development on efficient electric motors. Aggressive objectives can be set to increase the percentage of energy consumption from renewable and replacing internal combustion engines with electrical ones.

(794 words)

 

1 http://www.slb.com

2 ibid.

3 Schlumberger Limited, “2015 Global Stewardship Report”

4 ibid.

5 ibid.

6 ibid.

7 ibid.

8 ibid.

 

 

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2 thoughts on “The Big Blue Goes Green

  1. Gregorio – interesting stuff. Do you believe that the government should be further regulating and monitoring SLB’s progress? The “lean and green” initiative sounds creative. What was the employee response to the program? Did people seem to buy in or view the programs as an annoyance that interrupted their day to day productivity? Let’s chat more when you have a minute.

  2. That quite the list of initiatives Schlumberger is taking. Would be great to see some of the numbers in context of a) competition and whether they are being a leader in social stewardship and b) whether these initiatives are actually enough of a buffer to reduce risk from regulatory and environmental shocks that may occur due to climate change. It would also be interesting to know whether these initiatives are stemmed from internal realizations of social responsibility / resource scarcity / incoming volatility, or whether it is pushed from their customers due to their need for increased efficiencies.

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