US lawmakers press Biden on SLB’s ongoing presence in Russia

Dozens of US lawmakers are raising red flags with President Joe Biden’s administration over the continued presence of Houston-based oilfield service giant SLB in Russia, where its operations have reportedly grown over the last two years despite the ongoing Russia-Ukraine war.

Of that imported equipment, $3.3 million would be subject to controls if it had been exported from Europe or the US to Russia, reads the letter, released Monday by the office of US Representative Lloyd Doggett, a Texas Democrat.

In March 2022, SLB said it would not make new investments or deploy any new technologies to Russia.

The State Department declined to comment on the letter, which Reuters first reported on Monday. Officials from SLB and the Treasury department did not immediately respond to Upstream’s request for comment.

“This US-based company is keeping Vladimir Putin’s war machine well-oiled with financing for the barbaric invasion of Ukraine,” the letter says. “We urge you to continue supporting our Ukrainian allies by pursuing more rigorous oil sanctions to effectively restrict Putin’s profits.”

The House members — the overwhelming majority of whom are Democrats — claim SLB provided Russian oil company Lukoil with drilling tools and hydraulic packers in 2022 and 2023.

They also say SLB signed a contract in December 2023 with VNIGNI, a Russian oil and gas research institute, to build models of oil and gas deposits. The contract lists an account with PJSC Rosbank, a Russian bank that was sanctioned by the US in 2022.

The House members said providing Western technology to Russia “only increases the resiliency of their oil and gas sector against Western sanctions and prolongs its ability to finance its illegal offensive”.

“In concert with our allies in the G7, we must tighten oil sanctions to prevent the billions in revenue currently flowing into the Kremlin’s budget.”

State Department officials have also reportedly claimed that a Treasury Department general licence issued in June 2022 authorises some energy-related transactions with “certain sanctioned Russian financial institutions”, the letter says.

The letter also noted that Ukraine’s National Agency on Corruption Prevention (NACP) added SLB to its “international sponsor of war” blacklist last year.

“We and our G7 allies can hold SLB accountable for its complicity in Russian war crimes while still preserving stability in the global oil market,” the letter says.

SLB has 11,500 employees in Russia, according to the NACP. The company generated 5% of its 2023 revenue from Russia and had roughly $600 million worth of assets in the country, according to its latest annual report.

In SLB’s third quarter earnings call in 2023, chief executive Olivier Le Peuch said the company was expecting its Russia revenue to decline, “but not to zero in 2024.”

“I remind you that we continue to ensure that our remaining presence in Russia meets and exceeds all international sanctions,” Le Peuch said in response to an analyst's question.

The House members are asking the Treasury and State departments what exceptions SLB has utilised to increase its presence in Russia. They are also asking the agencies what would prevent other US companies from buying equipment from foreign countries and importing them into Russia, even with sanctions in place.

Though the signatories say that any damage done to Ukraine because of the SLB investments “cannot be fully undone”, the group is asking what steps are being taken to prevent any future US business growth in Russia and what other investments, if any, SLB has made in the country.

“The permissibility of these contracts highlights an alarming weakness in what has been a united effort with our allies to crush Russia’s ability to continue its illegal war,” the letter says. “Our sanctions cannot be symbolic; our enforcement at home and in concert with our partners must continue to improve.”