AI is the X factor of digital transformation in the energy industry, says SLB CEO Olivier Le Peuch

Summary

In this interview, Olivier Le Peuch, CEO of SLB, discusses the company's position in the global energy market amidst geopolitical tensions and economic uncertainty. He highlights SLB's commitment to sustainability and the transformative impact of AI on the energy industry through their Loomi platform. Despite a stock downturn, Le Peuch expresses optimism about the company's growth, emphasizing its market position, international presence, and alignment with digital and decarbonization trends. He also addresses SLB's operations in Russia, stating that they are minimal and focused on employee safety.

Takeaways

• 🕒 The discussion spans 16 hours, 39 minutes, and 8 seconds, indicating a comprehensive conversation.
• 🌐 The guest, Olivier Le Peuch, CEO of SLB, addresses the global energy market and geopolitical hotspots.
• 🤖 AI is highlighted as a transformative 'X factor' in the energy industry, with SLB positioning itself as an AI player through the Loomi platform.
• 📉 SLB's stock has experienced a downturn, being down 20% for the year and 32% over the last year, which Barrons suggests is an opportunity for reevaluation.
• 📈 Despite stock performance, SLB is committed to growth, increasing cash returns to shareholders, and expanding margins.
• 🌐 SLB's international market strength and alignment with digital and decarbonization trends are emphasized as key to its future.
• 🔗 The Loomi platform is introduced as a means to leverage AI for efficiency, innovation, and operational transformation in the energy sector.
• 📊 The industry's data-rich environment is a unique asset, with AI and deep learning being used to extract insights and optimize operations.
• 🌱 SLB's commitment to sustainability and decarbonization is a strategic focus, aligning with global trends and customer expectations.
• 🏛️ The geopolitical context, including SLB's operations in Russia amidst the invasion of Ukraine, is discussed, with SLB clarifying its stance and operations.

Q & A

What is the current status of SLB's stock performance?

SLB's stock has been down 20% for the year to date and 32% over the last year, which Barrons suggests might be due to a market beat down.

What does Olivier Le Peuch attribute the stock downturn to?

Olivier Le Peuch suggests that the stock downturn is due to uncertainty in economics, impacting the demand outlook and industry cycle, despite a favorable investment environment.

What is SLB's strategy to grow and maintain its market position?

SLB is poised to grow by continuing to commit cash to increase returns to shareholders, expanding margins, and aligning with market, international technology, digital, and decarbonization trends.

How does AI fit into SLB's plans for the energy industry?

AI is considered the 'X factor' for SLB, set to transform the way they provide services, planning, and operations by unlocking efficiency and innovation.

What is the Loomi platform and how does it relate to AI?

The Loomi platform is SLB's digital event and platform that showcases AI's role in the industry, connecting AI tools like deep learning and generative AI to operational data for insights and decision-making.

How does SLB utilize data within its industry?

SLB's industry is data-rich, and they use AI to connect and analyze this data, leading to autonomous operations, automation, and optimization, enhancing performance and efficiency.

What is the significance of the Loomi platform announcement?

The Loomi platform announcement signifies SLB's commitment to digital transformation and AI adoption, aiming to provide a platform for customers to leverage AI for more efficient operations.

What is SLB's stance on geopolitics and its international operations?

SLB has a clear stance on geopolitics, focusing on the safety and security of its people and adhering to international standards, as evidenced by their operations in Russia.

How has SLB responded to the Financial Times' report on its operations in Russia?

SLB has been transparent, publishing FAQs on their website, and has stated that their revenue in Russia is small and diminishing, focusing on safety and security without expanding operations.

What is the current state of SLB's operations in Russia?

SLB's operations in Russia are ongoing but not expanding, with a focus on safety and security, and a diminishing revenue stream.

How does SLB's commitment to sustainability align with its international operations?

SLB's commitment to sustainability is integral to its international operations, ensuring that their practices and technologies are aligned with global decarbonization trends.

Outlines

00:00

📈 CEO Interview on Energy Market and AI Innovation

In this segment, the CEO of SLB, Olivier Le Peuch, discusses the current state of the global energy market, geopolitical challenges, and the transformative role of AI in the industry. Despite the company's stock being down 20% for the year and 32% over the last year, Le Peuch expresses optimism, attributing the downturn to economic uncertainty and market cycles. He emphasizes SLB's strengths in international markets, digital capabilities, and commitment to sustainability as key drivers for future growth. The conversation shifts to the company's AI platform, Loomi, which Le Peuch describes as the 'X factor' for digital transformation in the energy sector, focusing on efficiency, innovation, and operational change through data analysis and automation.

05:00

🌐 SLB's Geopolitical Stance and Operations in Russia

The second paragraph delves into SLB's geopolitical stance, particularly regarding its operations in Russia. In contrast to competitors Baker Hughes and Halliburton, which have withdrawn from Russia following the invasion of Ukraine, SLB has maintained a presence. However, the company has clarified that it will not expand in Russia and that its revenue there is minimal and decreasing. Le Peuch addresses concerns by stating that SLB is transparent about its operations, focusing on the safety and security of its personnel and adhering to international standards and regulations. The discussion highlights the company's commitment to ethical practices and its response to the geopolitical situation.

Keywords

💡Global Energy Market

The global energy market refers to the worldwide trading and distribution of energy resources, including oil, natural gas, and electricity. In the script, the discussion centers around the dynamics of this market, its current state, and how geopolitical factors and technological advancements like AI are reshaping it. The interviewee, Olivier Le Peuch, CEO of SLB, discusses the company's position within this market and how it is adapting to changes.

💡Geopolitical Hotspots

Geopolitical hotspots are regions where tensions between countries or political groups could lead to conflicts or have significant impacts on global politics and trade. The script mentions these hotspots in relation to their influence on the energy market, particularly how they can affect energy supply and demand, as well as the strategic decisions of companies operating within the sector.

💡AI (Artificial Intelligence)

AI refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the context of the video, AI is highlighted as a transformative technology in the energy industry, with the potential to increase efficiency, drive innovation, and change operational practices. The Loomi platform mentioned in the script is an example of AI being utilized in the industry.

💡Digital Transformation

Digital transformation involves the integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers. The script discusses how SLB is embracing digital transformation through AI and other technologies to enhance its services and offerings in the oil field services industry.

💡Decarbonization

Decarbonization is the process of reducing carbon emissions to achieve a低碳 economy. In the script, the term is used to describe the trend towards cleaner energy sources and the reduction of greenhouse gas emissions. Companies like SLB are aligning themselves with this trend to meet environmental goals and regulatory requirements.

💡Stock Performance

Stock performance refers to the changes in the price and value of a company's shares over time. The script discusses the decline in SLB's stock value, which the CEO attributes to various factors including economic uncertainty and market conditions. Despite the downturn, the CEO expresses optimism about the company's future growth and commitment to shareholder returns.

💡Investment Cycle

The investment cycle refers to the periodic nature of investment activities, often influenced by economic conditions and industry trends. In the script, the CEO mentions the investment cycle in relation to the energy industry, suggesting that despite current challenges, the environment remains favorable for investment in the sector.

💡International Markets

International markets refer to the global economic environments where businesses operate and trade. The script highlights the importance of international markets for SLB, emphasizing the company's strengths in these areas and its commitment to growing its presence globally.

💡Sustainability

Sustainability in a business context refers to practices that ensure a company's operations are environmentally responsible, socially equitable, and economically viable in the long term. The script mentions SLB's commitment to sustainability, indicating that the company is focused on reducing its environmental impact and supporting sustainable practices within the energy industry.

💡Loomi Platform

The Loomi platform is a digital platform introduced by SLB that leverages AI to provide insights and optimize operations in the energy industry. The script discusses the platform as a key component of SLB's digital strategy, enabling customers to use AI to unlock efficiency and innovation in their operations.

💡Autonomous Operation

Autonomous operation refers to the ability of a system or process to function with minimal human intervention. In the script, autonomous operation is mentioned as a goal for the energy industry, with AI and digital technologies like the Loomi platform playing a crucial role in achieving this by automating and optimizing various aspects of energy production and distribution.

Highlights

Olivier Le Peuch, CEO of SLB, discusses the global energy market and geopolitical hotspots.

SLB is compared to NVIDIA in the 1980s by Barrens, suggesting a reevaluation of the stock.

SLB's stock has declined by 20% YTD and 32% over the last year, raising questions about market perception.

Le Peuch attributes the stock's performance to economic uncertainty and industry cycles.

SLB remains committed to increasing cash returns to shareholders despite market conditions.

The company is poised for growth, with a focus on international markets, digital transformation, and sustainability.

AI is identified as a transformative 'X factor' in the digital industry by SLB.

The Loomi platform is introduced as a key AI tool for the energy industry.

AI is being used to unlock efficiency and innovation in the energy sector.

SLB's industry is data-rich, with AI helping to extract insights and optimize operations.

The Loomi platform aims to provide autonomous operation and automation in the energy industry.

SLB's customers are aligning with the company's digital and decarbonization strategies.

Geopolitical issues are affecting SLB's international operations, including in Russia.

SLB's stance on operations in Russia is one of maintaining safety and security without expansion.

Financial Times reports on SLB's job advertisements in Russia despite other companies' exits.

SLB is clear about its operations in Russia, with a focus on safety and compliance.

Transcripts

16 HOURS, 39 MINUTES AND 8

SECONDS.

>> CAN'T GET HERE FAST ENOUGH.

>>> ALL RIGHT.

OUR NEXT GUEST JOINS US TO TALK

ABOUT THE GLOBAL ENERGY MARKET.

GEOPOLITICAL HOT SPOTS AND HOW

AI PROMISES TO CHANGE THE ENERGY

INDUSTRY.

WANT TO WELCOME OLIVIER LE PEUCH

CEO OF SLB, THE WORLD'S LARGEST

OIL FIELD SERVICES COMPANY.

SIR, THANK YOU FOR BEING WITH US

TODAY.

>> THANK YOU FOR HAVING ME.

>> LET'S TALK A LITTLE BIT ABOUT

THE SHOUTOUT YOU ALL GOT FROM

BARRENS THIS PAST WEEK.

BARRENS LOOKED AT YOU AND SAID

YOU ARE -- LIKE THE NVIDIA OF

THE 1980s.

SAID THAT IT'S WORTH TAKING

ANOTHER LOOK AT THIS STOCK.

BUT A BIG PART OF THE REASON

THEY SAID THAT IS BECAUSE THE

STOCK IS DOWN 20% FOR THE YEAR

TO DATE, DOWN 32% OVER THE LAST

YEAR.

AND THINKS THAT THERE'S

DEFINITELY SOME BEAT DOWN

ASPECTS TO IT.

WHY DO YOU THINK THE STOCK HAS

BEEN DOWN?

>> I THINK MANY REASONS FOR

THIS.

UNCERTAINTY ON THE ECONOMICS IS

PUTTING DEMAND OUTLOOK THAT THE

CYCLE, THE INDUSTRY, THE BACK

DOOR OF INVESTMENTS INCREASING

IS STILL HIGHLY FAVORABLE IN

VERY UNSTEADY ENVIRONMENTS,

STRENGTHS IN INTERNATIONAL

MARKETS, DIGITAL THAT WE CAN

TALK ABOUT LATER AND COMMITMENT

TO SUSTAINABILITY AND COMMITMENT

TO SUSTAINABILITY.

SO WE ARE STILL VERY POISED TO

GROW GOING FORWARD.

CONTINUE TO COMMIT CASH INCREASE

TO RETURNS GIVING BACK TO OUR

SHAREHOLDERS.

COMMITTED TO NEXT YEAR AND WE

STILL HAVE SIGHTS TO CONTINUE TO

EXPAND MARGIN, HIGHLY FAVORABLE

FOR MARKET POSITION,

INTERNATIONAL TECHNOLOGY,

DIGITAL, AND DECARBONIZATION,

TRENDS WE ARE VERY WELL ALIGNED

WITH.

>> OKAY.

LET'S TALK A LITTLE BIT ABOUT

SOME OF THOSE TRENDS YOU JUST

MENTIONED.

AI, YOU'RE NOW AN A-I PLAY, I

GUESS W THE LOOMI PLATFORM.

WHAT IS THAT?

>> ABSOLUTELY.

WE BELIEVE THAT AI IS THE X

FACTOR WE CALL IT, X FACTOR OF

DIGITAL INDUSTRY.

CHANGING THE WAY WE PROVIDE,

PLANNING PROVISIONS, ALL ASPECTS

IS TRANSFORMATIVE.

AND I THINK THIS WEEK WE HAVE

BEEN INVITING MORE THAN 1,000

CUSTOMERS AND PARTNERS HERE IN

MONACO TO DO THIS -- FIRST AND

LEADING DIGITAL EVENT IN OUR

INDUSTRY.

THE NUMBERS ARE SHOWING REALLY

AROUND WHAT WE CAN -- DIGITAL,

BEING CREATED BY CUSTOMERS USING

OUR PLATFORM, USING THE

PLATFORMS OF OUR PARTNERS.

BUT I THINK WHAT IS UNIQUE THIS

YEAR IS AI IS THERE, THE TIME IS

NOW FOR AI TO UNLOCK EFFICIENCY,

TO UNLOCK INNOVATION AND TO

CHANGE THE WAY WE OPERATE IN THE

INDUSTRY.

>> HOW DOES IT DO THAT?

I DON'T KNOW THAT I UNDERSTAND

HOW ANY OF THAT WORKS?

>> SO, IT WORKS SIMPLY -- WE

USE -- WHAT IS UNIQUE ABOUT OUR

INDUSTRY?

OUR INDUSTRY HAS BEEN SWIMMING

IN DATA.

AND USING SCIENCE TO EXECUTE ITS

WORK FORCE, FACE, DRILLING,

PRODUCTION, A LOT OF DATA.

NOW WHAT WE ARE CONNECTING, WE

ARE CONNECTING THE AI TOOL BOX,

THE DEEP LEARNING, THE

GENERATIVE AI TO THE TRENDS, TO

THE ATTRIBUTES OF THE

OPERATIONAL DATA AND EXTRACTING

INSIGHTS, EXTRACTING DECISIONS

FOR OUR CUSTOMERS AND STARTING

TO TOUCH AUTONOMOUS OPERATION,

AUTOMATION AND OPTIMIZATION.

THAT'S WHAT IS CHANGING.

WHILE USING THE TOOL BOX OF OUR

PARTNERS AND WE ARE CONNECTING

THE DATA FOR OUR CUSTOMERS TO

GIVE THEM INSIGHTS AND GO BEYOND

THIS TO GIVE AUTONOMOUS

OPERATION AND TO AUTOMATE AND TO

CHANGE THE PERFORMANCE

EFFICIENCY AND START TO DO MORE

AND MORE OPERATION, MORE

EFFICIENT OPERATION AND LESS

CARBON OPERATION.

AND ALL OF THE CUSTOMERS THE

IOCs, THE NATIONAL COMPANY, THE

WHOLE GATHERING HERE, THEY ARE

REALLY ALIGNED.

THEY HAVE SEEN THE LIGHTS.

THEY ARE WILLING TO ADOPT.

AND THEY'RE LOOKING FOR

PLATFORM, HENCE THE LOOMI

PLATFORM ANNOUNCED YESTERDAY.

>> OLIVIER, YOU MENTIONED

GEOPOLITICS AND YOUR STRENGTH

INTERNATIONALLY.

IN AUGUST, THE FINANCIAL TIMES

REPORTED THAT THEY HAD LOOKED

INTO YOUR OPERATIONS IN RUSSIA,

WHICH YOU POINT OUT THAT YOUR

TWO MAIN RIVALS BAKER HUGHES AND

HALL BURTON BOTH PULLED OUT OF

RUSSIA AFTER THE INVASION OF

UKRAINE.

YOU ALL STAYED BUT SAID YOU

WOULD NOT BE EXPANDING THERE AT

THE TIME.

THE FINANCIAL TIMES IN AUGUST

SAID THAT THEY IDENTIFIED MORE

THAN 1,000 JOB ADVERTISEMENTS

POSTED BY THE COMPANY IN RUSSIA

FOR ROLES RANGING FROM DRIVERS

TO CHEMISTS TO GEOLOGISTS.

CAN YOU EXPLAIN WHAT YOUR

OPERATIONS ARE IN RUSSIA?

>> WE HAVE BEEN CLEAR.

WE HAVE BEEN PUBLISHING FAQ ON

OUR WEBSITES, DISCLOSING THIS

ARTICLE.

AND REVENUE IS VERY SMALL AND

DIMINISHING OVER TIME.

WE'RE FOCUSSED ON THE SAFETY,

THE SECURITY OF OUR PEOPLE

OPERATING THERE.

AND TO REACH OR EXCEED ALL

INTERNATIONA