SCHLUMBERGER LIMITED/NV Management report and analysis of the financial situation and operating results. (Form 10-Q)

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This section of the Form 10-Q discusses second-quarter 2022 results of
operations and comparisons to first-quarter 2022, as well as the first six
months of 2022 results of operations and comparisons to the first six months of
2021.  Detailed financial information with respect to first-quarter 2022 can be
found in Part I, Item 1, "Financial Statements" of Schlumberger's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

               Second Quarter 2022 Compared to First Quarter 2022

                                                                                          (Stated in millions)

                                               Second Quarter 2022                   First Quarter 2022
                                                           Income Before                        Income Before
                                          Revenue              Taxes           Revenue              Taxes
Digital & Integration                    $      955       $           379     $      857       $           292
Reservoir Performance                         1,333                   195          1,210                   160
Well Construction                             2,686                   470          2,398                   388
Production Systems                            1,893                   171          1,604                   114
Eliminations & other                            (94 )                 (56 )         (107 )                 (60 )
Pretax segment operating income                                     1,159                                  894
Corporate & other (1)                                                (148 )                               (164 )
Interest income (2)                                                     3                                    2
Interest expense (3)                                                 (121 )                               (120 )
Charges and credits (4)                                               259                                   26
                                         $    6,773       $         1,152     $    5,962       $           638


(1) Consisting mainly of certain corporate charges not allocated to the

segments, stock-based compensation costs, related amortization expense

with certain intangible assets, certain centrally managed initiatives and

other non-functioning items.

(2) Interest income excludes amounts that are included in segment income

($16 million in Q2 2022; $12 million in Q1 2022).

(3) Interest expense excludes amounts that are included in segment revenue

($3 million in Q2 2022; $3 million in Q1 20221).

(4) Charges and credits are described in detail in note 2 of the appendix

Financial state.

The second quarter was marked by a strong acceleration in revenue and profit growth, with revenue growth of 14% sequentially, driven by an increase in international activity, in North Americaand in all Divisions.

Sequentially, all Divisions posted double-digit revenue growth-outpacing rig
count growth both in North America and internationally. The quarter was also
characterized by a favorable mix of exploration and offshore activity and the
increasing impact of improved pricing, resulting in the largest sequential
quarterly growth since 2010.

Second-quarter sequential revenue growth was broad-based, with international
revenue increasing 12% and North America revenue growing 20%. The international
growth was widespread across all areas with almost all of the GeoUnits
experiencing revenue growth. International revenue growth was led by
Europe/CIS/Africa, which experienced a 20% sequential increase. Latin America
experienced sequential revenue growth of 10% while revenue in the Middle East &
Asia increased 7%. In North America, the 20% sequential revenue growth was
driven by a significant increase in land and offshore drilling activity and
higher exploration data licensing in the US Gulf of Mexico.

Overall, second-quarter pretax segment operating income increased 30%
sequentially, and pretax segment operating margin expanded sequentially by 212
basis points ("bps") to 17.1%-the highest quarterly operating margin level since
2015. All four Divisions expanded their margins sequentially.

Despite near-term concerns over a global economic slowdown, the combination of
energy security, favorable break-even prices, and the urgency to grow oil and
gas production capacity is expected to continue to support strong upstream E&P
spending growth. Consequently, Schlumberger expects a decoupling of upstream
spending from near-term demand volatility, resulting in resilient global oil and
gas activity growth in 2022 and beyond.


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The strength of the second-quarter performance highlights Schlumberger's ability
to comprehensively participate in drilling and completion activity growth
globally. The multiyear upcycle continued to gain momentum with upstream
activity and service pricing steadily increasing both internationally and in
North America, resulting in a strengthened outlook for Schlumberger.

Digital & Integration

Digital Revenue & Integration of $955 million increased 11% sequentially, primarily due to higher sales of exploration data licenses, including $95 million
in transfer fees.

Digital & Integration pretax operating margin of 40% increased 570 basis points sequentially due to higher U.S. exploration data license sales Gulf of Mexico and increased profitability of APS projects, particularly in Canada.

Tank performance

Reservoir Performance revenue of $1.3 billion increased 10% sequentially due to
higher activity on land and offshore beyond the impact of the seasonal rebound
in the Northern Hemisphere, along with improved pricing.

Reservoir Performance pretax operating margin of 15% expanded 143 bps
sequentially. Profitability was boosted by the seasonal recovery in the Northern
Hemisphere, higher offshore and exploration activity, favorable technology mix,
and improved pricing.

Well Construction

Well construction income from $2.7 billion increased 12% sequentially due to increased onshore and offshore drilling activity in both North America and internationally, beyond the impact of the seasonal rebound in the Northern Hemisphere, in addition to the improvement in prices.

Well Construction pretax operating margin of 18% expanded 134 bps sequentially
due to improved profitability across most of its business lines, particularly in
the Europe/CIS/Africa and Middle East & Asia areas. Margin expansion was due to
the seasonal recovery in the Northern Hemisphere, higher offshore and
exploration activity, favorable technology mix, and improved pricing.

Production systems

Revenue from production systems $1.9 billion increased 18% sequentially as supply chain and logistics constraints eased, facilitating increased product shipments and backlog conversion, primarily international .

Production Systems pretax operating margin of 9% expanded 190 bps sequentially
due to improved profitability from higher sales of surface, well, and subsea
production systems.


                  Six Months 2022 Compared to Six Months 2021


                                                           (Stated in millions)

                                    Six Months 2022          Six Months 2021
                                               Income                   Income
                                               Before                   Before
                                  Revenue       Taxes      Revenue       Taxes
Digital & Integration             $  1,813     $   671     $  1,590     $   521
Reservoir Performance                2,543         355        2,119         258
Well Construction                    5,083         858        4,045         482
Production Systems                   3,497         285        3,271         309
Eliminations & other                  (201 )      (115 )       (168 )       (99 )
Pretax segment operating income                  2,054                    1,471
Corporate & other (1)                             (313 )                   (288 )
Interest income (2)                                  5                        9
Interest expense (3)                              (241 )                   (264 )
Charges and credits (4)                            285                        -
                                  $ 12,735     $ 1,790     $ 10,857     $   928


                                       18
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(1) Consisting mainly of certain corporate charges not allocated to the

segments, stock-based compensation costs, related amortization expense

with certain intangible assets, certain centrally managed initiatives and

other non-functioning items.

(2) Interest income excludes amounts that are included in segment income

($28 million in 2022; $1 million in 2021).

(3) Interest expense excludes amounts that are included in segment revenue

($6 million in 2022; $8 million in 2021).

(4) Charges and credits are described in detail in note 2 of the appendix

    Financial Statements.



Six-month 2022 revenue of $12.7 billion increased 17% year-on-year driven by an
increase in activity internationally, in North America, and across all
Divisions.  International revenue increased 13% and North America revenue grew
37%.  International growth was widespread, led by Latin America, which increased
21% due to higher drilling and stimulation activity.  Europe/CIS/Africa
experienced 14% growth, while revenue in the Middle East & Asia increased 7%.
In North America, the revenue growth was driven by robust onshore drilling
activity and higher sales of production systems, coupled with a strong
contribution from the APS project in Canada and increased exploration data
licensing in the US Gulf of Mexico.

Segment pretax operating margin of 16% for the half of 2022 was 258 basis points higher than the same period last year due to improved operating leverage resulting from higher activity , a favorable business mix and an improving pricing environment.

Digital & Integration

Six-month 2022 revenue of $1.8 billion increased 14% year-on-year, primarily in
North America, driven by higher exploration data license sales and increased
revenue from APS projects due to higher production and improved oil prices,
particularly in Canada.

Year-on-year, pretax operating margin expanded 425 bps to 37% primarily due to
the higher revenue from exploration data licenses and improved profitability
from APS projects.

Reservoir Performance

Six-month 2022 revenue of $2.5 billion increased 20% year-on-year driven by
strong international activity led by Latin America and the Middle East & Asia.
Double-digit growth was posted in intervention, evaluation, and stimulation
services both on land and offshore, with higher exploration-related activity and
improved pricing.

Year-over-year, pretax operating margin increased by 178 basis points to 14% driven by improved profitability in the assessment and response business.

Well construction

Six-month 2022 revenue of $5.1 billion grew 26% year-on-year with growth across
all areas, led by North America and Latin America which grew 57% and 45%,
respectively. Double-digit growth was recorded in drilling fluids, measurements,
and integrated drilling-both on higher land and offshore activity-along with
improved pricing.

Year-over-year, pretax operating margin increased 497 basis points to 17%, driven by higher activity and improved pricing.

Production systems

2022 half-year revenue of $3.5 billion increased by 7% mainly due to new projects and increased commercial activity mainly in Europe/IEC/Africa, North Americaand Latin America. Double-digit growth was recorded in the subsea and midstream generation systems.

Year-on-year, pretax operating margin decreased 131 bps to 8% due to reduced
profitability in midstream and well production systems largely as a result of
higher logistics costs and less favorable revenue mix.

                                       19

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Interest and other income

Interest and other income consisted of the following:

                                                                                       (Stated in millions)

                                          Second Quarter       First Quarter             Six Months
                                               2022                2022              2022           2021
Gain on sale of Liberty shares           $            216     $            26     $      242     $        -
Gain on sale of real estate                            43                   -             43              -
Earnings of equity method investments                  33                  10             43             25
Interest income                                        19                  14             33             10
                                         $            311     $            50     $      361     $       35


Other

Research & engineering and General & administrative expenses, as a percentage of
Revenue, for the second quarter and first quarter of 2022 and six months ended
June 30, 2022 and 2021 were as follows:

                          Second
                         Quarter       First Quarter        Six Months
                           2022            2022           2022      2021
Research & engineering        2.3 %               2.4 %     2.3 %     2.5 %
General & administrative      1.3 %               1.6 %     1.4 %     1.4 %



The effective tax rate for the second quarter of 2022 was 15.8%, as compared to
18.4% for the first quarter of 2022. The decrease in the effective tax rate was
primarily due to the credits described in Note 2 to the Consolidated Financial
Statements. These credits reduced the effective tax rate during the second
quarter by three percentage points.

The effective tax rate for the six months of 2022 was 16.8%, as compared to
18.6% for the same period of 2021. The decrease in the effective tax rate was
primarily due to the credits described in Note 2 to the Consolidated Financial
Statements. These credits reduced the effective tax rate during the first six
months of 2022 by two percentage points.

Fees and credits

Schlumberger recorded the following credits in 2022, all of which are classified as Interest and other income in the consolidated income statement.

                                        (Stated in millions)

                                Pretax       Tax       Net
First quarter:
Gain on sale of Liberty shares $    (26 )   $  (4 )   $  (22 )
Second quarter:
Gain on sale of Liberty shares     (216 )     (13 )     (203 )
Gain on sale of real estate         (43 )      (2 )      (41 )
                               $   (285 )   $ (19 )   $ (266 )


Schlumberger recorded no charges or credits in the first six months of 2021.

                                       20

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Cash and capital resources

Details of the components of liquidity as well as changes in liquidity follow:

                                                                   (Stated in millions)

                                                Jun. 30,       Jun. 30,       Dec. 31,
Components of Liquidity:                          2022           2021           2021
Cash                                           $    1,893     $    1,439     $    1,757
Short-term investments                                923          1,243          1,382
Short-term borrowings and current portion of
long-term debt                                       (901 )          (36 )         (909 )
Long-term debt                                    (12,946 )      (15,687 )      (13,286 )
Net debt (1)                                   $  (11,031 )   $  (13,041 )   $  (11,056 )




                                                           Six Months Ended Jun. 30,
Changes in Liquidity:                                      2022                2021
Net income                                             $       1,490       $         755
Gain on sale of Liberty shares                                  (242 )                 -
Gain on sale of real estate                                      (43 )                 -
Depreciation and amortization (2)                              1,065        

1,058

Income from equity method investments, less dividends received

                                                         (22 )               (15 )
Deferred taxes                                                    11                 (18 )
Stock-based compensation expense                                 160        

156

Increase in working capital (3)                               (1,884 )              (758 )
US Federal tax refund                                              -                 477
Other                                                              4                  (6 )
Cash flow from operations                                        539               1,649
Capital expenditures                                            (664 )              (421 )
APS investments                                                 (311 )              (188 )
Exploration data costs capitalized                               (64 )               (12 )
Free cash flow (4)                                              (500 )             1,028
Dividends paid                                                  (352 )              (349 )
Proceeds from employee stock plans                                93        

62

Taxes paid on net-settled stock-based compensation awards

                                                           (85 )      

(18 ) Business acquisitions and investments, net of cash acquired and debt assumed

                                        (8 )               (35 )
Proceeds from sale of Liberty shares                             513                   -
Proceeds from sale of real estate                                120                   -
Other                                                            (86 )      

(12 ) Change in net debt before impact of exchange rate changes on net debt

                                      (305 )      

676

Impact of exchange rate variations on net debt

                                                             330        

163

(Increase) decrease in net debt                                   25        

839

Net debt, beginning of period (1)                            (11,056 )           (13,880 )
Net debt, end of period (1)                            $     (11,031 )     $     (13,041 )


(1) “Net debt” represents gross debt less cash and

investments. Management believes that net debt provides useful information

regarding Schlumberger’s level of indebtedness reflecting cash and

    investments that could be used to repay debt. Net debt is a non-GAAP
    financial measure that should be considered in addition to, not as a
    substitute for or superior to, total debt.

(2) Includes depreciation of property, plant and equipment and depreciation of

intangible assets, exploration data costs and APS investments.

(3) Includes severance pay from $38 million and $184 million during the six

months ended June 30, 2022 and 2021, respectively.

(4) “Free cash flow” represents operating cash flow less capital

expenses, APS investments and capitalized exploration data costs.

Management believes that free cash flow is an important measure of liquidity for

business and is useful to investors and management as a measure of

our ability to generate cash. Once the needs and obligations of the company have been met,

this cash can be used to reinvest in the business for future growth or to

return to shareholders through the payment of dividends or share buybacks. Free

the cash flow does not represent the residual cash flow available for

discretionary spending. Free cash flow is a non-GAAP financial measure

which should be seen as a complement, not a substitute or superior

operating cash flow.

                                       21

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The main liquidity events in the first six months of 2022 and 2021 included: • Capital investments (comprising capital expenditures, APS investments and

capitalized exploration data) have been $1.0 billion during the first six months of

2022 vs. $0.6 billion during the first half of 2021. Capital

investments during the year 2022 should be around $2

billion compared to $1.7 billion for the whole of 2021.

• In the first six months of 2022, working capital consumed $1.9 billion of

liquidity compared to $758 million during the same period of 2021. The

the year-on-year increase in working capital consumption was mainly due to

an increase in receivables due to significant revenue growth. Inventory

also increased as timelines were managed in anticipation of continued growth

in the second half of the year.

• In the first six months of 2022, Schlumberger sold 33.8 million of its

shares of Liberty and received the proceeds of $513 million.

• During the second quarter of 2022, Schlumberger sold certain real estate and

received the product from $120 million.

• On January 21, 2016the Board approved a $10 billion share buyback program

for Schlumberger common stock. Schlumberger had acquired $1.0 billion of

ordinary shares of Schlumberger under this program from June 30, 2022. Schlumberger

has not redeemed any of its common shares during the first six months of

2022.


As of June 30, 2022, Schlumberger had $2.82 billion of cash and short-term
investments on hand. Schlumberger had committed debt facility agreements
aggregating $6.54 billion, all of which was available and unused. Schlumberger
believes these amounts are sufficient to meet future business requirements for
at least the next 12 months.

There was no borrowing under the commercial paper programs in June 30, 2022.

In April 2022Schlumberger announced a 40% increase in its quarterly cash dividend from $0.125 per common share outstanding at $0.175 per share.

Schlumberger maintains an allowance for doubtful accounts in order to record
accounts receivable at their net realizable value.  Judgment is involved in
recording and making adjustments to this reserve.  Allowances have been recorded
for receivables believed to be uncollectible, including amounts for the
resolution of potential credit and other collection issues such as disputed
invoices.  Adjustments to the allowance may be required in future periods
depending on how such potential issues are resolved, or if the financial
condition of Schlumberger's customers were to deteriorate resulting in an
impairment of their ability to make payments.  As a large multinational company
with a long history of operating in a cyclical industry, Schlumberger has
extensive experience in working with its customers during difficult times to
manage its accounts receivable.

Schlumberger generates revenue in more than 120 countries.  As of June 30, 2022,
only four of those countries individually accounted for greater than 5% of
Schlumberger's net receivable balance, of which only the United States accounted
for greater than 10% of such receivables.

Further information

In March 2022Schlumberger has decided to immediately suspend the deployment of new investments and technologies in its Russia operations.

Russia represented approximately 5% of Schlumberger's worldwide revenue during
the first six months of 2022. The carrying value of Schlumberger's net assets in
Russia was approximately $1.0 billion as of June 30, 2022. This consisted of
$0.4 billion of receivables, $0.5 billion of other current assets, $0.4 billion
of fixed assets, $0.1 billion of other non-current assets and $0.4 billion of
current liabilities.

Schlumberger continues to actively monitor the dynamic situation in Ukraine and
comply with applicable international laws and sanctions. The extent to which
Schlumberger's operations and financial results may be affected by the ongoing
conflict in Ukraine will depend on various factors, including the extent and
duration of the conflict; the effects of the conflict on regional and global
economic and geopolitical conditions; the effect of further international
sanctions and trade control restrictions on Schlumberger's business, the global
economy and global supply chains; and the impact of fluctuations in the exchange
rate of the ruble. Continuation or escalation of the conflict may also aggravate
the risk factors that Schlumberger identified in its Annual Report on Form 10-K
for the year ended December 31, 2021, including cybersecurity risks.

                                       22

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FORWARD-LOOKING STATEMENTS

This second-quarter 2022 Form 10-Q, as well as other statements we make,
contains "forward-looking statements" within the meaning of the federal
securities laws, which include any statements that are not historical facts.
Such statements often contain words such as "expect," "may," "can," "believe,"
"predict," "plan," "potential," "projected," "projections," "precursor,"
"forecast," "outlook," "expectations," "estimate," "intend," "anticipate,"
"ambition," "goal," "target," "scheduled," "think," "should," "could," "would,"
"will," "see," "likely," and other similar words. Forward-looking statements
address matters that are, to varying degrees, uncertain, such as statements
about Schlumberger's financial and performance targets and other forecasts or
expectations regarding, or dependent on, its business outlook; growth for
Schlumberger as a whole and for each of its Divisions (and for specified
business lines, geographic areas or technologies within each Division); oil and
natural gas demand and production growth; oil and natural gas prices; forecasts
or expectations regarding energy transition and global climate change;
improvements in operating procedures and technology; capital expenditures by
Schlumberger and the oil and gas industry; the business strategies of
Schlumberger, including digital and "fit for basin," as well as the strategies
of Schlumberger's customers; Schlumberger's effective tax rate; Schlumberger's
APS projects, joint ventures, and other alliances; Schlumberger's response to
the COVID-19 pandemic and its preparedness for other widespread health
emergencies; the impact of the ongoing conflict in Ukraine on global energy
supply; access to raw materials; future global economic and geopolitical
conditions; future liquidity; and future results of operations, such as margin
levels. These statements are subject to risks and uncertainties, including, but
not limited to, changing global economic and geopolitical conditions; changes in
exploration and production spending by Schlumberger's customers and changes in
the level of oil and natural gas exploration and development; the results of
operations and financial condition of Schlumberger's customers and suppliers;
Schlumberger's inability to achieve its financial and performance targets and
other forecasts and expectations; Schlumberger's inability to achieve net-zero
carbon emissions goals or interim emissions reduction goals; general economic,
geopolitical and business conditions in key regions of the world; the ongoing
conflict in Ukraine; foreign currency risk; inflation; pricing pressure; weather
and seasonal factors; unfavorable effects of health pandemics; availability and
cost of raw materials; operational modifications, delays or cancellations;
challenges in Schlumberger's supply chain; production declines; the extent of
future charges; Schlumberger's inability to recognize efficiencies and other
intended benefits from its business strategies and initiatives, such as digital
or Schlumberger New Energy, as well as its cost reduction strategies; changes in
government regulations and regulatory requirements, including those related to
offshore oil and gas exploration, radioactive sources, explosives, chemicals and
climate-related initiatives; the inability of technology to meet new challenges
in exploration; the competitiveness of alternative energy sources or product
substitutes; and other risks and uncertainties detailed in this Form 10-Q and
our most recent Form 10-K and Forms 8-K filed with or furnished to the SEC. If
one or more of these or other risks or uncertainties materialize (or the
consequences of any such development changes), or should our underlying
assumptions prove incorrect, actual results or outcomes may vary materially from
those reflected in our forward-looking statements. Forward-looking and other
statements in this Form 10-Q regarding our environmental, social and other
sustainability plans and goals are not an indication that these statements are
necessarily material to investors or required to be disclosed in our filings
with the SEC. In addition, historical, current, and forward-looking
environmental, social and sustainability-related statements may be based on
standards for measuring progress that are still developing, internal controls
and processes that continue to evolve, and assumptions that are subject to
change in the future. Statements in this second-quarter 2022 Form 10-Q are made
as of July 27, 2022, and Schlumberger disclaims any intention or obligation to
update publicly or revise such statements, whether as a result of new
information, future events or otherwise.

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