Ladies and gentlemen good morning.

My thanks to Jim Wicklund and Credit Suisse for the opportunity to be here today.

Last year was a record year for Schlumberger, and for the oilfield services industry in general. However, it was a year in which the price of Brent averaged $99 per barrel. In 2015, the EIA forecasts a much lower $58 for the same barrel, and it is clear that the coming year or so will be very different. Indeed, views on the supply-demand balance and competition between various marketed sources of supply are likely to lead to a significantly different environment for the industry once the market recovers.

Against this landscape, I’d like to do three things today. First I will discuss how capital spending could evolve in a lower commodity price market and what this means for Schlumberger. Second, I will show how the fundamental changes we began making more than six years ago are now accelerating to a degree that we are very well-positioned to benefit from the opportunities that the current market presents, and third, I’m going to review our recent financial results to illustrate how our wide geographical footprint, extensive portfolio, and financial strength enable us to outperform in current market conditions.

But before we start, let’s get the formalities out of the way. Some of the following statements are forward-looking. Actual results may differ materially. Please see our most recent Form 10-K filed with the SEC.

Thank you, let’s move on.

Late last year, the International Energy Agency published its annual World Energy Outlook. As part of that outlook the agency continues to expect that three-quarters of world energy demand in 2050 will be met by fossil fuels, with oil and gas making up one-half of total demand. With conventional supplies often taking years to bring on line, and unconventional supplies requiring potentially lengthy changes in infrastructure or regulation, industry investment is increasingly more complex.

When we look at E&P capital investment over the past 12 years for example, we see that it tracked rising oil prices until sometime in 2012. And we see that supply increased to meet demand, while maintaining a comfortable cushion to cater for supply outages, geopolitical events, and periods of sudden demand growth. Yet the five-fold rise in investment over the period has only yielded a 10% increase in oil production. This does not tell the whole story since we also know that the investment made in fighting decline is much greater than that made to add new capacity.

When looked at in this way, it has been clear for a while that the rise in E&P investment was becoming less and less sustainable as it outpaced the rise in commodity prices even before the dramatic fall in oil price that we have seen since last October. This has now made it even more obvious that the profitability of the industry as a whole, and the service industry in particular, depends on changing the way we work through adopting new technologies, learning from other industries, leveraging scale, and aligning technical and commercial interests across the value chain.

Looked at as a series of challenges, we believe that the service industry can respond in four distinct ways. At Schlumberger, we consider these to be the drivers of our clear differentiation in the marketplace.

The first is the speed of technology innovation. Today, service industry research and engineering investment is focused on evolutionary products that not only do what is already being done, but do it better and at lower cost per barrel. In meeting the need to accelerate the pace of technology innovation, Schlumberger benefits from long-standing engagements with academia, honed over 30 years through locating research centers close to hubs of academic excellence, collaborating with customers on joint projects, and identifying the right M&A targets, closing them in a timely manner and then integrating them successfully.

The second driver is reliability where we need to take a completely new approach to product development, job planning and design, as well as to job execution. As part of a six-year effort to transform our research and engineering organization, we have already invested over $350 million in organizational structure, test equipment and manufacturing facilities. In doing so, we have learned from the experience of other high-technology industries such as automotive and aerospace. The tools and processes that come from our R&E transformation are reaching field service in increasing numbers. Our success in this lies partly in the maturity of our global operations that deploy some 150,000 mobile assets through approximately 2,500 operating facilities.

The third driver is efficiency by leveraging scale in both field operations and back office systems. This lowers both capex requirements and operating costs. This has been enhanced by the unmatched maturity and flexibility of our GeoMarket and Product Group structure that has been developed over more than 15 years to provide the means to continuously improve operating performance. Every month our product lines combined conduct more than one million operating hours, representing a massive reach in serving customer needs and seizing market opportunities.

The fourth driver is integration. In many operations, a number of different companies are involved, working sequentially or concurrently. Each interfaces with the customer, but each looks after their own commercial interests leading to less than perfect value chain interfaces. Integrating services, sharing resources, and deploying people more efficiently can yield performance gains. Just as importantly, integrating technologies both across operations and through the life of the field adds significant value.

Taken independently, these four transformational drivers already provide opportunities to change the way we work. Taken together, they yield even greater opportunities.

The combination of technology and integration for example boosts revenue growth through the premium pricing of new technologies—which contributed more than 27% of Schlumberger revenue in 2014—and through the expansion of integrated operations that currently make up 20% of our total revenue.

In addition, the combination of reliability and efficiency lowers the cost of service delivery. This is a key benefit of our transformational program—which targets a 10-fold reduction in non-productive time, a doubling in asset utilization, a 25% reduction in inventory days, a 20% increase in workforce productivity and a 10% lowering in support structure.

The differentiation that the four drivers of technology, reliability, efficiency and integration bring is further widened by a workforce that arguably represents the industry’s most capable, most driven and most diverse group of people—complete with their own strong global culture. This is the result of a unique approach over more than 40 years in recruiting graduates from top universities around the world, training them in world-class learning centers, and developing them to their full potential.

We believe that the Schlumberger approach to industry challenges of harnessing unique strengths to performance drivers can fundamentally change the way in which we work, and represents an advantage that is exceedingly difficult to replicate. Moreover, it lies at the heart of our transformation program, which was already set to deliver industry leading performance when commodity prices were much higher. It is even more of an advantage in today’s significantly lower-priced market.

Within that market we have already made changes that will directly impact our financial performance. So before looking at our performance by geography I would just like to quickly review those changes.

First, lower exploration activity has led us to restructure the WesternGeco marine seismic fleet by retiring older vessels with higher operating costs, by converting lower-end vessels to source boats, and by cancelling most of our third-party charters. We do not see a rapid recovery in this market, where pricing levels are now exceedingly low. However, we are only working on contracts that are above a certain return, and we are ready to make further changes in our fleet in line with future activity changes as required.

In spite of this, it is worth noting that only three billion barrels of recoverable oil and condensate were discovered in 2014—the lowest volume in 25 years. This is not a sustainable performance from a long-term reserve replacement standpoint.

On the positive side, however, the entry into service of our new fit-for-purpose Amazon-class vessels with increased operational efficiency, new technologies such as IsoMetrix acquisition, and the industry’s largest group of petrophysical and geophysical experts position us well once that market improves.

Second we have reduced overall headcount—something we began early in the fourth quarter of 2014. This has enabled us to enter 2015 with the right size to match activity and we are ready to adapt further as activity changes. Our approach is flexible, and is enabled by our transformation program that deploys our people as efficiently as possible through multiskilling using personnel trained for multiple roles; modularity with crews in specialized units; and remote operations from support hubs covering wide areas.

Last, some international operations have suffered from widely changing foreign exchange rates in a number of countries, specifically in Russia and Venezuela, and we have taken a charge in restating our bolivar-denominated assets in Venezuela. In the future, this will reduce the US-dollar amount of revenue and earnings in local currency, and had we done this over full-year 2014, our earnings per share would have been reduced by approximately eight cents.

I’d now like to move on to our financial performance for the fourth quarter and full year.

North America results set a new record for the Area in 2014. Land activity improved, new technologies successfully penetrated the market, and operational efficiencies drove performance to offset some of the pricing pressure seen late in the year. Offshore activity recovered after the loop currents of the third quarter, and multiclient seismic sales increased somewhat. Margins expanded on the back of stronger activity and new technology uptake as well as through solid execution and supply chain improvement.

Among new technologies, BroadBand hydraulic stimulation services saw more rapid market penetration than HiWAY flow channel fracturing, and our footprint in the artificial lift market expanded in both geography and in engineering and manufacturing.

However, as rig count started to fall in the fourth quarter, pricing pressure increased, particularly for land hydraulic fracturing and drilling services and we began to work actively with customers in all basins to help lower overall drilling and completions costs. As a result, we have been able to focus on how to create savings from new technologies and workflows as well as from improved operational planning and efficiency. In this process, the transformation program has been an asset.

Looking forward, we are not yet in a position to call the bottom in North America, particularly as this downturn has been both sharper and faster than that of 2008 to 2009. This has meant that activity forecasts have been obsolete almost as soon as they were made, and pricing discounts have been much steeper. The US land rig count for example has now fallen by more than 35% since the October peak, and we expect lowering activity and pricing pressure to continue. Activity is reducing fairly uniformly across the major basins with some variation in pricing levels, but these are likely to even out during the second quarter. At the same time, we still expect overall offshore drilling activity in the Gulf of Mexico to be flat from the fourth quarter of 2014 to the first quarter of 2015, while activity will be solid in Canada.

In terms of overall spend, indications are that North America will fall by more than 30% in 2015. In a falling market, decrementals are driven by both activity and price. While reduced activity can be met by scaling back resources, pricing remains a significant factor and we are already very close to the pricing trough of the 2008/9 downcycle with more reductions possible.

It is inevitable, however, that lower land activity will show its effects on production. Unconventional oil and gas wells exhibit high rates of decline and have short productive lives. January’s oil production growth in North America slowed from that of previous quarters and monthly gains will eventually fall to a plateau and then to a decline as activity reductions undershoot the level actually needed to sustain production.

Turning now to our international business, we expect the impact of this downturn to be about half that of North America. Our full-year 2014 performance was strong in spite of customer E&P investment spend remaining flat with 2013. Year-on-year revenue grew by 4%, income by 12%, and incremental margins were up by 69%. International margin reached 24% and we generated more than 70% of our worldwide operating income internationally. This performance puts us head and shoulders above our closest competitors combined.

The fourth quarter was strongest in Middle East & Asia where activity reached a record high, particularly in Saudi Arabia where we expect to see continuing strong levels of both rig-based and rigless work in 2015. Land seismic activity was strong in Kuwait while Oman continued to be driven by wireline services and hydraulic fracturing work. Activity was also higher in the United Arab Emirates, particularly for well construction services both offshore and on the island drilling project. Southeast Asia, however, remained flat as growth in some markets was offset by weakness in others.

In Latin America, strength in Colombia and Venezuela balanced a decline in Mexico on reduced customer spend and delays in Argentina and Brazil—particularly toward the end of the year. Performance in Europe, CIS, and Africa also weakened late in the year from a combination of currency effects in Russia, the onset of the winter weather season, and a fall in the North Sea in response to lowering oil prices.

The significant drop in oil prices has also put pressure on international customers to reduce their cost per barrel of oil. As in North America, we are actively engaged to help find ways to generate the required savings from more than just price reductions by exploring better ways of working together while maintaining our strong focus on service quality and operational integrity.

In the outlook for the international market, we agree with consensus in an overall reduction in spend between 10 and 15% in 2015, and we are already starting to see the effects. These, however, will not be uniform, and will favor geographical regions and technology portfolios differently. We should not forget that 2014 spend was flat with that of 2013, and that discovered reserves and oil production capacity both fell year over year. We therefore expect that reduced investment will lead to a reduction in supply and a narrowing of spare supply as decline rates impact production capacity and lower activity delays supply additions.

I would now like to briefly discuss how activity intensity can vary, and create opportunities.

To find oil, you have to drill, and drilling makes up the major part of exploration, development and production cost. When we look at the markets of Saudi Arabia, Russia and the United States, each of which produces similar volumes of oil, we see different characteristics. While the huge number of land wells in the US is increasingly skewed by unconventional resource production from horizontal wells with short productive lives, there are many thousands of other conventional land wells with different profiles, production characteristics, and drilling technology needs. The market in Russia is similar, but with a smaller number of conventional resource wells drilled from pads presenting different drilling challenges. In Saudi Arabia, high-flowrate wells are becoming more and more complex with many lateral sections joining a common surface section. In all of these cases, the technologies of drilling may be similar, but their integration and the manner of that integration may be very different.

The Drilling Group has become Schlumberger’s largest since the Smith acquisition and now offers the most complete portfolio in the service industry. Each product line brings new capabilities and the current step change is coming from technology integration through common bottomhole assembly architecture and software platforms for specific market requirements.

At the same time, integrated operations where project economics are driven by time-related costs, have shown that technology and factory drilling methods can reduce well drilling times by half and that the drilling rig is becoming an essential part of the integrated design of the drilling process.

To allow for this, we have always maintained that success in integrated operations depends upon access to drilling rigs—either wholly owned or available through exclusive agreements or joint ventures.

For more than 50 years we have held a highly successful minority position in the Arabian Drilling Company in the Middle East. Through the recent acquisition of Saxon we have expanded our integrated project management operations and acquired some of the best land drilling rigs available. Last month’s announcement of an agreement to acquire a minority share in Eurasia Drilling Company Limited is one further step to take advantage of the opportunity that new technology, new processes and greater integration can bring to the vast land drilling market. We see this as one of opportunities that our technology, footprint and scale can enable.

Ladies and gentlemen, let me now conclude with a few final thoughts.

The recent drop in oil price resulting from higher marketed supply and competing resource types has brought lower and more volatile customer spend and a severe reduction in short-term visibility. We are therefore focused on what we can control to manage our business and deliver better decrementals than in previous downturns.

At the same time, our ability to generate free cash has given us confidence to increase our dividend to a level double that of five years ago, and to accelerate our share buyback program within our target period. This performance has been further boosted by a reduction in capital expenditure in 2014 to $4 billion—the lowest percentage level in a decade—and which has been achieved in part through the early effects of the transformation program. We are planning for a further fall in capex to $3 billion in 2015.

Given current commodity prices the year ahead will be challenging. We are actively engaged with customers to tailor resources to activity, and to manage pricing through the most cost-effective solutions.

But we see also see this year as one offering multiple opportunities that we intend to leverage as we strengthen our technology and service offering. With our wide geographical footprint, extensive business portfolio and integration opportunities, we remain confident in our ability to outperform.

Thank you very much.