Schlumberger LTD [PDF]

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Table of Contents Year of Establishment .......................................................................................................................................... 1 History/Introduction............................................................................................................................................ 1 Organogram......................................................................................................................................................... 4 Missions ............................................................................................................................................................... 4 Vision ................................................................................................................................................................... 5 Ambitions ............................................................................................................................................................ 5 Management Approach....................................................................................................................................... 5 Organization Culture ........................................................................................................................................... 5 Managing in a Global Environment ......................................................................................................................6 Managing Workforce Diversity ............................................................................................................................ 8 Managing Creativity and Innovation ................................................................................................................... 8 Decision Making .................................................................................................................................................. 9 Strategic Management ........................................................................................................................................ 9 Basic Organization Design ................................................................................................................................. 10 Organization Communication............................................................................................................................ 11 Motivation and Teamwork ................................................................................................................................ 11 Human Resource Management ......................................................................................................................... 12 Managing Operations ........................................................................................................................................ 12 Refrences ........................................................................................................................................................... 12

YEAR OF ESTABLISHMENT Conrad and Marcel Schlumberger the two French brothers founded the Schlumberger Company in 1926 by the name of “Société de prospection électrique“(mean: Electric Prospecting Company).

HISTORY/INTRODUCTION Schlumberger is the largest oilfield supplying company in the world. It offers the latest technology to search and produce the oil and gas in an efficient and safe manner. Primarily the Schlumberger was built for the prospecting (fossicking) of minerals specimen but with the passage of time it enlarged its circle and included the activities of oil exploration and production in it. The company first ever characterized the geologic formations by measuring its electrical resistivity directly with a probe named sonde. This was first done by a team under the supervision of experimental physicist Henri Doll who was the Conrad’s son in law. The team took its measurements from a 500 meter deep well in MerkwillerPechelbronn, in France. It was called electrical resistivity well log.

The electrical resistivity well log proved to be a land mark in the history of oil exploration. In no time similar well logs were functional all around the world including United States, the Soviet Union, Japan and India. In 1929, the first ever well log was made in United States in Kern County, California. In 1935, the “Schlumberger Well Surveying Corporation” was established in Houston, United States. It was later evolved into “Schlumberger Well Services” and finally changed its name to” Schlumberger Wireline and Testing”. Following the death of Conrad Schlumberger in 1936, the company’s headquarters were moved to Houston in 1940 because at that time United States was emerging 1

as a new global leader in technology. But Marcel Schlumberger continued to work in France. In 1948 Henry Doll established a new research center in Ridgefield, Connecticut that is still operational till now and is playing a significant role in Research and Development activities of the company. However it is now moved to Cambridge, Massachusetts. Pierre Schlumberger (son of Marcel Schlumberger) became the company ‘President after the death of Marcel in 1953 .Schlumberger officially became a holding company in 1956, when it acquired Johnston Testers which was a testing and production company of United States. Same year, Schlumberger initiated the program of grooming new and young field engineers by assigning senior technical and trained technical staff to them. This proved to be a vital move in serving the company well ever since. Over the years, the company continued to grow slowly and steadily by purchasing its competitors. In 1960, Schlumberger formed a joint venture with Dow Chemical to provide oil-well completion services and named it Dowell Schlumberger (50% Schlumberger, 50%Dow Chemical). A year later Schlumberger purchased Daystrom, a maker of electronic instruments mainly for military purpose in South Boston, Virginia. In 1962, Schlumberger Limited succeeded in getting its name listed on the New York Stock Exchange. In 1964, Schlumberger created Neptune Drilling Company by purchasing 50% Forex and 50% Languedocienne. In 1965, the Schlumberger board of directors decided to make Jean Riboud as the new President of the company who was a close friend of Conrad and Marcel Schlumberger. Five years later, with the revolution in computer world, Schlumberger introduced SARABAND the first computer based reservoir analysis.Schlumberger limited bought the remaining 50% of Forex the following year and renamed Neptune Drilling Company to Forex Neptune Drilling Company. In 1979, Schlumberger continued it drives and purchased Fairchild Camera and Instrument Corporation. In 1981, in order to bring Schlumberger’s globally spread operations together the company made its first international data links with the facility of electronic mail (e-mail). Two years later Schlumberger opened a new research center in England by the name of Cambridge Research Center .Recently in 2012 it was renamed to Schlumberger Gould Research Center to give credit to company's former Chief Executive Officer( CEO ) Andrew Gould. In 1984, Anadrill drilling segment was formulated prior to the acquisition of 50 percent of Dowell of North America and the SEDCO drilling rig company. Later with 2

the merging of SEDCO and Forex Neptune, a new company Sedco Forex Drilling Company was created. Three years later Flopetrol and Wireline group merged to form Schlumberger Wireline & Testing. In the same year Schlumberger limited purchased the remains of Neptune (North America), Bosco and Cori (Italy), and Allmess (Germany) companies and sold the money losing Fairchild to National Semiconductors at a loss of 220 million dollars. In 1991, PRAKLA-SEISMOS became the part of Schlumberger limited followed by purchase of Camco International, Oilphase and GeoQuest Systems in upcoming years. In 1995, for the sake of improving performance and expertise in various processes, Schlumberger launched Integrated Project Management (IPM) that is operational till now. In 1999, Smith International and Schlumberger entered into a joint venture and created the world’s largest drilling fluids company M-I L.L.C. It comprised of the 40 percent of the Schlumberger and 60 percent of the Smith International. In 2000, the Geco-Prakla division and Western Geophysical combined their seismic units to form a joint venture by the name of WesternGeco. Schlumberger and Baker Hughes held a 70% and 30% stakes of this company respectively. After 6 years Schlumberger bought the remaining stake from the Baker Hughes for US $2.4 billion to take full control of the company. In 2000, the Sedco Forex segregated from its parental company Schlumberger and merged with Transocean Drilling. Schlumberger acquired Sema plc. Phoenix and Sensa in 2001.Two years later, Baird resigned from the Schlumberger and Andrew Gould named new CEO of the company. In 2005, Schlumberger purchased several companies related to ground water industry including Waterloo Hydrogeologic, Westbay Instruments, and Van Essen Instruments. Same year the company again moved its U.S headquarters from New York to Houston. In 2006, several research centers of Schlumberger from different parts of the world joined Schlumberger-Doll Research Center including Stavanger, Norway, Moscow, Russia, Dhahran, Saudi Arabia and Cambridge, England.. In 2010, Schlumberger limited acquired Smith International Company for $11.3 Billion. This was the biggest acquisition deal in the history of Schlumberger. The company also announced to acquire a French-based company Geosevices for $1.1 Billion. In 2012,

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Schlumberger opened the China Petroleum Institute in the capital city of Beijing to meet the technical challenges related to China.

ORGANOGRAM

Source : http://www.apisingapore2012.org

MISSIONS The mission statement of Schlumberger is: “One of the world’s largest leading oilfield service providers.” 4

VISION The vision statement of the company is as follows: “To be the world’s leading supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry worldwide.”

AMBITIONS  To outperform every market where we choose to work  To create supreme shareholder value by effectively using the business models and efficiently using the resources  To provide same and high standards of safety and business practices all over the place we work  To fulfill the expectations of our investors, employees and customers. Source: http://www.slb.com

MANAGEMENT APPROACH Schlumberger has adopted the quantitative and contemporary approach to management. Emerging trends in market are driving the oil and field industry to embrace the fresh approaches to efficiently manage its business. Schlumberger is using different statistical and optimization model to squeeze the finest value from the petroleum assets which starts from extraction of oil from the reservoir to its sale and export in the market.

ORGANIZATION CULTURE Schlumberger limited is a globally diverse organization consisting of more than 120,000 employees in 85 different countries. Its culture can’t be described in terms of a unique nationality, lifestyle or values. Its culture varies from region to region, country to country and even place to place within a country. It depends upon the field area you are working in. Schlumberger’s culture highly ensures the wellbeing, safety and health of its employees regardless of their backgrounds. The company does not have a unique dress code. You can find people working in Schlumberger wearing casual jeans to 3-piece formal suits. 5

The true culture of an organization can be read from its values stated as follows:

VALUES People: Our people thrive on the challenge to excel in any environment and their dedication to safety and customer service worldwide is our greatest strength. Technology: Our commitment to technology and quality is the basis for our competitive advantage. Profit: Our determination to produce superior profits is the cornerstone for our future independence of action and growth. Source: http://www.slb.com Like many other old companies the culture of Schlumberger evolved over the years. The company is highly decentralized and this empowerment at the lower levels produces a strong level of accountability on each employee’s part. From the very beginning the freedom of thought and character are the part of the Schlumberger’s culture it has earned the reputation of placing the right person on the right job.

MANAGING IN A GLOBAL ENVIRONMENT Schlumberger is a global organization and in order to meet the global challenges the needs and desires of employees, clients, suppliers, shareholders and contractors should be fulfilled. Schlumberger has developed a framework to overcome these challenges. The organization is geographically divided into five major regional suborganizations. Each of them is addressing to its particular area.      

NAM (North America) EAF (Europe and Africa) RCA (Russia and Central Asia) ASA (Asia) MEA (Middle East) LAM (Latin America)

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Source : http://www.apisingapore2012.org

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MANAGING WORKFORCE DIVERSITY Schlumberger is a global and ethnically diverse company including men and women of different nationalities working together to achieve a common objective. This ethnic diversity is one of the main strength of the company. The company is functional in a rightly global fashion all over the world. It provides equal and fair opportunities of work to all of its employees without any discrimination.

Source: http://www.slb.com

MANAGING CREATIVITY AND INNOVATION Schlumberger limited is trying to develop an atmosphere of creative human potential enabling its employees to improve and alter their personal lives by working together with other employees to solve complex dilemmas and problems. Schlumberger Limited has built a network of technology centers all over the world supporting creativity and innovation including 8

         

Schlumberger Kabushiki Kaisha Center Schlumberger Rosharon Technology Center Stonehouse Technology Center Schlumberger Riboud Product Center Sugar Land Technology Centers Schlumberger Rosharon Technology Center Sugar Land Technology Centers Beijing Geoscience Center Abingdon Technology Center EMI Technology Center

Apart from these, with more than 125 research and engineering facilities all over the world, Schlumberger is highly committed to revolutionize the oil field industry by the latest technology and innovation. In 2010, the company invested $919 million in the research and development sector. In 2012, Schlumberger invested $1.2 billion in R& E. The products and tools offered by the company have versatility in terms of their uses working at different conditions and environments.

DECISION MAKING Since the Schlumberger is geographically dispersed, it is highly decentralized in terms of decisions making. The company has transferred decision making rights to the lower managers and employees who are closest to the actual operation of the task. In this way the headquarters staff remained at a low level. On the other hand, the lower levels employees to whom the rights have been relegated are totally responsible for their actions and performances. In this way a strong sense of accountability is produced on each employee’s part.

STRATEGIC MANAGEMENT Strategic Management is done to increase the overall performance of the organization. Making the right decision at right time is fundamental to success. In order to meet the challenges of the time Schlumberger is accomplishing world class products from the leading companies. It is also hiring staff from top educational institutions. Schlumberger is spending a massive capital in energy sector to get technical and operation expertise and to maintain its top position. Schlumberger limited is capable of organizing and deploying teams anywhere the company operates. 9

BASIC ORGANIZATION DESIGN The company is not overspecialized. The tasks /duties in the organization are divided up to certain extent. This proper work specialization has reduced the human diseconomies such as fatigue, tension, bad quality of work, boredom and stress in the company .The Schlumberger is functionally departmentalized as shown by the following figure

Source: http://www.slb.com

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ORGANIZATION COMMUNICATION The organization communication network of Schlumberger follows the chain model that supports high accuracy but moderate speed of flow of information.The principal offices of Schlumberger limited is located in three different cities i.e. Houstan, Paris and The Hague. The company directs all the operation from these offices. The Executive Management team of Schlumberger, which controls all forms and patterns of communication occuring within the organization, consists of following members:

Source: http://www.slb.com/about/execmanagement.aspx The organization communication network of Schlumberger follows the chain model that supports high accuracy but moderate speed of flow of information.

MOTIVATION AND TEAMWORK Schlumberger Limited promotes an environment that supports the teamwork. Since Schlumberger is a global organization having approximately 120,000 employees from 85 different countries, it understands the customers’ needs diversely. Adequate and fantastic pay packages are awarded to the company employees. Schlumberger also provide the flexible working hours to its employees and give them a month vacation after a specific period of service. The company is trying its best to fulfill the desires of its customers regardless of geographic boundaries. Schlumberger has registered itself in a teamwork challenges program by Hoang Teambuilding. People belonging to different countries meet there and feel free and comfortable with each other. 11

HUMAN RESOURCE MANAGEMENT Schlumberger limited considers the personnel of its organization as a greatest asset of the company. Therefore it supports every talented and skillful person who joins the company. The company domain experts are always in search of those people who want to excel in any kind of environment. Stephanie Cox, who is the director of personnel of Schlumberger’s North and South America branch, has recently initiated a “PeopleMatch” program to exactly point the managerial talent of the employees. Schlumberger limited understands the reality that in order to maintain its top position, the human resources of the company should be managed properly. Although Human Resource professionals of the Schlumberger limited are playing diverse roles yet they all are important contributors to the company’s productivity and competitiveness.

MANAGING OPERATIONS Managing operations is the backbone of any organization. Any organization working in the natural resource department must be able to handle hitches arising in real time. They employ different algorithms to predict and forecast the future. This not only cut costs, but also helps in making timely delivery of goods to the consumers. Since the oilfield business is increasing day by day, the competition between different oilfield companies is staggeringly high. Schlumberger wants to stay at the top when it comes to services by providing reduced costs, lesser risks and optical performance to its customers. Schlumberger is investing a lot of capital and resources to achieve this goal.

REFRENCES http://www.slb.com https://en.wikipedia.org/wiki/Schlumberger http://en.wikipedia.org/wiki/Dow_Chemical http://www.apisingapore2012.org

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