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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2013

Commission file No.: 1-4601

SCHLUMBERGER N.V.

(SCHLUMBERGER LIMITED)

(Exact name of registrant as specified in its charter)

CURAÇAO		52-0684746
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

42 RUE SAINT-DOMINIQUE
PARIS, FRANCE		75007

5599 SAN FELIPE, 17th FLOOR
HOUSTON, TEXAS, U.S.A.		77056

PARKSTRAAT 83 THE HAGUE,
THE NETHERLANDS		2514 JG
(Addresses of principal executive offices)		(Zip Codes)

Registrant’s telephone number: (713) 375-3400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at September 30, 2013
COMMON STOCK, $0.01 PAR VALUE PER SHARE	1,316,954,935

SCHLUMBERGER LIMITED

Third Quarter 2013 Form 10-Q

Table of Contents

		Page
PART I	Financial Informaiton

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28

Item 4.	Controls and Procedures	28

PART II	Other Information

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

	Certifications

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

	(Stated in millions, except per share amounts)

	Third Quarter				Nine Months
	2013		2012		2013			2012
Revenue	$	11,608	$	10,498	$	33,360		$	30,648
Interest & other income		43		44		105			137
Gain on formation of OneSubsea		—		—		1,028			—
Expenses
Cost of revenue		8,926		8,237		26,047			24,124
Research & engineering		286		291		870			849
General & administrative		110		95		305			294
Merger & integration		—		32		—			68
Impairment & other		—		—		456			—
Interest		98		89		294			246
Income before taxes		2,231		1,798		6,521			5,204
Taxes on income		506		436		1,361			1,268
Income from continuing operations		1,725		1,362		5,160			3,936
Income (loss) from discontinued operations		—		65		(69	)		211
Net income		1,725		1,427		5,091			4,147
Net income attributable to noncontrolling interests		10		3		23			20
Net income attributable to Schlumberger	$	1,715	$	1,424	$	5,068		$	4,127

Schlumberger amounts attributable to:
Income from continuing operations	$	1,715	$	1,359	$	5,137		$	3,916
Income (loss) from discontinued operations		—		65		(69	)		211
Net income	$	1,715	$	1,424	$	5,068		$	4,127

Basic earnings per share of Schlumberger:
Income from continuing operations	$	1.30	$	1.02	$	3.87		$	2.94
Income (loss) from discontinued operations		—		0.05		(0.05	)		0.16
Net income	$	1.30	$	1.07	$	3.82		$	3.10

Diluted earnings per share of Schlumberger:
Income from continuing operations	$	1.29	$	1.02	$	3.84		$	2.92
Income (loss) from discontinued operations		—		0.05		(0.05	)		0.16
Net income	$	1.29	$	1.07	$	3.79		$	3.08
Average shares outstanding:
Basic		1,322		1,328		1,326			1,331
Assuming dilution		1,333		1,336		1,336			1,340

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)

		(Stated in millions)

	Third Quarter						Nine Months
	2013			2012			2013			2012
Net income	$	1,725		$	1,427		$	5,091		$	4,147
Currency translation adjustments
Unrealized net change arising during the period		95			138			(139	)		45
Marketable securities
Unrealized (loss) gain arising during the period		(25	)		—			58			—
Derivatives
Net derivatives gain (loss) on hedge transactions (see Note 11)		76			142			(27	)		(35	)
Reclassification to net income of net realized (gain) loss (see Note 11)		(30	)		(92	)		15			58
Pension and other postretirement benefit plans
Actuarial loss
Actuarial loss arising during the period		(18	)		(14	)		(23	)		(35	)
Amortization to net income of net actuarial loss (see Note 15)		73			51			224			137
Prior service cost
Amortization to net income of net prior service cost (see Note 15)		31			31			94			93
Income taxes on pension and other postretirement benefit plans		(9	)		(8	)		(40	)		(31	)
Comprehensive income		1,918			1,675			5,253			4,379
Comprehensive income attributable to noncontrolling interests		10			3			23			20
Comprehensive income attributable to Schlumberger	$	1,908		$	1,672		$	5,230		$	4,359

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

		(Stated in millions)

	Sept. 30, 2013 (Unaudited)			Dec. 31, 2012
	Sept. 30, 2013 (Unaudited)			Dec. 31, 2012
ASSETS
Current Assets
Cash	$	3,149		$	1,905
Short-term investments		3,286			4,369
Receivables less allowance for doubtful accounts
(2013—$254; 2012—$202)		12,057			11,351
Inventories		4,895			4,785
Deferred taxes		278			343
Other current assets		1,428			1,403
		25,093			24,156
Fixed Income Investments, held to maturity		363			245
Investments in Affiliated Companies		3,298			1,502
Fixed Assets less accumulated depreciation		14,828			14,780
Multiclient Seismic Data		650			518
Goodwill		14,623			14,585
Intangible Assets		4,732			4,802
Other Assets		1,536			959
	$	65,123		$	61,547
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	8,366		$	8,453
Estimated liability for taxes on income		1,471			1,426
Long-term debt—current portion		1,876			1,163
Short-term borrowings		622			958
Dividends payable		418			368
		12,753			12,368
Long-term Debt		9,916			9,509
Postretirement Benefits		1,833			2,169
Deferred Taxes		1,479			1,493
Other Liabilities		1,111			1,150
		27,092			26,689
Equity
Common stock		12,108			11,912
Treasury stock		(7,208	)		(6,160	)
Retained earnings		36,711			32,887
Accumulated other comprehensive loss		(3,726	)		(3,888	)
Schlumberger stockholders’ equity		37,885			34,751
Noncontrolling interests		146			107
		38,031			34,858
	$	65,123		$	61,547

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

		(Stated in millions)
	Nine Months Ended Sept. 30,
	2013			2012
Cash flows from operating activities:
Net income	$	5,091		$	4,147
Less: Loss (income) from discontinued operations		69			(211	)
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization ⁽¹⁾..................................................................................................		2,737			2,570
Non-cash charges		459			—
Gain on formation of OneSubsea		(1,028	)		—
Earnings of companies carried at equity, less dividends received		(46	)		(87	)
Deferred income taxes		16			(88	)
Stock-based compensation expense		255			251
Pension and other postretirement benefits expense		388			298
Pension and other postretirement benefits funding		(468	)		(462	)
Change in assets and liabilities: ⁽²⁾
Increase in receivables		(1,292	)		(2,180	)
Increase in inventories		(96	)		(787	)
Decrease (increase) in other current assets		28			(392	)
Increase in other assets		(614	)		(104	)
Increase in accounts payable and accrued liabilities		189			340
Increase in liability for taxes on income		15			131
Increase (decrease) in other liabilities		2			(23	)
Other		233			33
NET CASH PROVIDED BY OPERATING ACTIVITIES		5,938			3,436
Cash flows from investing activities:
Capital expenditures		(2,753	)		(3,161	)
Multiclient seismic data capitalized		(300	)		(260	)
Business acquisitions, net of cash acquired		(544	)		(713	)
Payment for OneSubsea transaction		(600	)		—
Sale of investments, net		963			221
Other		131			(124	)
NET CASH USED IN INVESTING ACTIVITIES		(3,103	)		(4,037	)
Cash flows from financing activities:
Dividends paid		(1,196	)		(1,067	)
Proceeds from employee stock purchase plan		270			247
Proceeds from exercise of stock options		145			139
Stock repurchase program		(1,526	)		(972	)
Proceeds from issuance of long-term debt		2,267			2,788
Repayment of long-term debt		(1,211	)		(1,718	)
Net (decrease) increase in short-term borrowings		(306	)		223
Other		3			15
NET CASH USED IN FINANCING ACTIVITIES		(1,554	)		(345	)
Cash flows from discontinued operations—operating activities		(2	)		76
Cash flows from discontinued operations—investing activities		(28	)		1,011
Cash flows from discontinued operations		(30	)		1,087
Net increase in cash before translation effect		1,251			141
Translation effect on cash		(7	)		6
Cash, beginning of period		1,905			1,705
Cash, end of period	$	3,149		$	1,852

⁽¹⁾	Includes multiclient seismic data costs.

⁽²⁾	Net of the effect of business acquisitions and divestitures.

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

											(Stated in millions)
	Common Stock									Accumulated Other Comprehensive Loss					Total
January 1, 2013—September 30, 2013	Issued			In Treasury			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests		Total
Balance, January 1, 2013	$	11,912		$	(6,160	)	$	32,887		$	(3,888	)	$	107	$	34,858
Net income								5,068						23		5,091
Currency translation adjustments											(139	)				(139	)
Changes in unrealized gain on marketable securities											58					58
Changes in fair value of derivatives											(12	)				(12	)
Pension and other postretirement benefit plans											255					255
Shares sold to optionees, less shares exchanged		(31	)		176											145
Vesting of restricted stock		(48	)		48											—
Shares issued under employee stock purchase plan		18			252											270
Stock repurchase program					(1,526	)										(1,526	)
Stock-based compensation expense		255														255
Dividends declared ($0.9375 per share)								(1,244	)							(1,244	)
Other		2			2									16		20
Balance, September 30, 2013	$	12,108		$	(7,208	)	$	36,711		$	(3,726	)	$	146	$	38,031

											(Stated in millions)
	Common Stock									Accumulated Other Comprehensive Loss
January 1, 2012—September 30, 2012	Issued			In Treasury			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance, January 1, 2012	$	11,639		$	(5,679	)	$	28,860		$	(3,557	)	$	129		$	31,392
Net income								4,127						20			4,147
Currency translation adjustments											40						40
Changes in fair value of derivatives											23						23
Pension and other postretirement benefit plans											164						164
Shares sold to optionees, less shares exchanged		(63	)		202												139
Vesting of restricted stock		(16	)		16												—
Shares issued under employee stock purchase plan		16			231												247
Stock repurchase program					(972	)											(972	)
Stock-based compensation expense		251															251
Dividends declared ($0.825 per share)								(1,098	)								(1,098	)
Other		13			2						5			(42	)		(22	)
Balance, September 30, 2012	$	11,840		$	(6,200	)	$	31,889		$	(3,325	)	$	107		$	34,311

SHARES OF COMMON STOCK

(Unaudited)

				(Stated in millions)
	Issued		In Treasury			Shares Outstanding
Balance, January 1, 2013		1,434		(106	)		1,328
Shares sold to optionees, less shares exchanged		—		3			3
Vesting of restricted stock		—		1			1
Shares issued under employee stock purchase plan		—		4			4
Stock repurchase program		—		(19	)		(19	)
Balance, September 30, 2013		1,434		(117	)		1,317

See Notes to Consolidated Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Schlumberger Limited and its subsidiaries (“Schlumberger”) have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Schlumberger management, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the nine-month period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2013. The December 31, 2012 balance sheet information has been derived from the Schlumberger 2012 financial statements. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Schlumberger Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on January 31, 2013.

2. Charges and Credits

Schlumberger recorded the following charges and credits during the first nine months of 2013 and 2012:

2013

Second quarter 2013:

•	Schlumberger recorded a pretax and after-tax gain of $1.028 billion as a result of the deconsolidation of its subsea business in connection with the formation of the OneSubsea joint venture with Cameron International Corporation (“Cameron”). Refer to Note 4 – Acquisitions for further details.

•	Schlumberger recorded a $222 million pretax ($203 million after-tax) impairment charge relating to an investment in a company involved in developing drilling-related technology and a $142 million pretax and after-tax impairment charge relating to an investment in a contract drilling business.

The following is a summary of the charges and credits recorded during the second quarter of 2013:

	(Stated in millions)
									Consolidated Statement of Income Classification
	Pretax			Tax		Net			Consolidated Statement of Income Classification
Gain on formation of OneSubsea joint venture	$	(1,028	)	$	—	$	(1,028	)	Gain on formation of OneSubsea
Impairment of equity-method investments		364			19		345		Impairment & other
	$	(664	)	$	19	$	(683	)

First quarter 2013:

•

Although the functional currency of Schlumberger’s operations in Venezuela is the US dollar, a portion of the transactions are denominated in local currency. In February 2013, Venezuela’s currency was devalued from the prior exchange rate of 4.3 Bolivar Fuertes per US dollar to 6.3 Bolivar Fuertes per US dollar. As a result of this devaluation, Schlumberger recorded a pretax and after-tax foreign currency loss of $92 million during the first quarter of 2013.

The following is a summary of the charges and credits recorded during the first nine months of 2013:

	(Stated in millions)
									Consolidated Statement of Income Classification
	Pretax			Tax		Net			Consolidated Statement of Income Classification
Gain on formation of OneSubsea joint venture	$	(1,028	)	$	—	$	(1,028	)	Gain on formation of OneSubsea
Impairment of equity-method investments		364			19		345		Impairment & other
Currency devaluation loss in Venezuela		92			—		92		Impairment & other
	$	(572	)	$	19	$	(591	)

2012

Schlumberger recorded the following merger and integration-related charges in connection with its 2010 acquisitions of Smith International, Inc. and Geoservices.

These amounts are classified in Merger & integration in the Consolidated Statement of Income.

	(Stated in millions)
	Pretax		Tax		Net
First Quarter	$	14	$	1	$	13
Second Quarter		22		1		21
Third Quarter		32		4		28
	$	68	$	6	$	62

3. Earnings Per Share

The following is a reconciliation from basic earnings per share of Schlumberger to diluted earnings per share of Schlumberger:


							(Stated in millions, except per share amounts)
	Third Quarter 2013						Third Quarter 2012
	Schlumberger Income from Continuing Operations		Average Shares Outstanding		Earnings per Share from Continuing Operations		Schlumberger Income from Continuing Operations		Average Shares Outstanding		Earnings per Share from Continuing Operations
Basic	$	1,715		1,322	$	1.30	$	1,359		1,328	$	1.02
Assumed exercise of stock options		—		7				—		5
Unvested restricted stock		—		4				—		3
Diluted	$	1,715		1,333	$	1.29	$	1,359		1,336	$	1.02


	Nine Months 2013						Nine Months 2012
	Schlumberger Income from Continuing Operations		Average Shares Outstanding		Earnings per Share from Continuing Operations		Schlumberger Income from Continuing Operations		Average Shares Outstanding		Earnings per Share from Continuing Operations
Basic	$	5,137		1,326	$	3.87	$	3,916		1,331	$	2.94
Assumed exercise of stock options		—		6				—		6
Unvested restricted stock		—		4				—		3
Diluted	$	5,137		1,336	$	3.84	$	3,916		1,340	$	2.92

The number of outstanding options to purchase shares of Schlumberger common stock which were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect, was as follows:

		(Stated in millions)
	2013		2012
Third Quarter		13		21
Nine Months		13		21

4. Acquisitions

On June 30, 2013, Schlumberger and Cameron completed the formation of OneSubsea, a joint venture to manufacture and develop products, systems and services for the subsea oil and gas market. Schlumberger and Cameron each contributed all of their respective subsea businesses to the joint venture and Schlumberger made a $600 million cash payment to Cameron. Schlumberger owns 40% of OneSubsea and accounts for this investment under the equity method. Schlumberger recognized a pretax and after-tax gain of $1.028 billion, which is classified as Gain on formation of OneSubsea in the Consolidated Statement of Income, as a result of the deconsolidation of its subsea business. This gain is equal to the difference between the fair value of the Schlumberger subsea business, which was determined based on the present value of its estimated future cash flows, and its carrying value at the time of closing.

During the first nine months of 2013, Schlumberger made certain other acquisitions and investments, none of which were significant on an individual basis, for cash payments, net of cash acquired, of $544 million.

5. Inventories

A summary of inventories follows:

	(Stated in millions)
	Sept. 30, 2013		Dec. 31, 2012
Raw materials & field materials	$	2,642	$	2,519
Work in process		296		349
Finished goods		1,957		1,917
	$	4,895	$	4,785

6. Fixed Assets

A summary of fixed assets follows:

	(Stated in millions)
	Sept. 30, 2013		Dec. 31, 2012
Property, plant & equipment	$	34,571	$	33,168
Less: Accumulated depreciation		19,743		18,388
	$	14,828	$	14,780

Depreciation expense relating to fixed assets was as follows:

	(Stated in millions)
	2013		2012
Third Quarter	$	788	$	730
Nine Months	$	2,324	$	2,144

7. Multiclient Seismic Data

The change in the carrying amount of multiclient seismic data for the nine months ended September 30, 2013 was as follows:

	(Stated in millions)
Balance at December 31, 2012	$	518
Capitalized in period		300
Charged to expense		(168	)
Balance at September 30, 2013	$	650

8. Goodwill

The changes in the carrying amount of goodwill by reporting unit for the nine months ended September 30, 2013 were as follows:

	(Stated in millions)
	Reservoir Characterization			Drilling			Production			Total
Balance at December 31, 2012	$	3,760		$	8,337		$	2,488		$	14,585
Acquisitions		4			3			247			254
Divestiture of business		—			—			(150	)		(150	)
Impact of changes in exchange rates		(24	)		(23	)		(19	)		(66	)
Balance at September 30, 2013	$	3,740		$	8,317		$	2,566		$	14,623

9. Intangible Assets

The gross book value, accumulated amortization and net book value of intangible assets were as follows:

										(Stated in millions)
	Sept. 30, 2013						Dec. 31, 2012
	Gross Book Value		Accumulated Amortization		Net Book Value		Gross Book Value		Accumulated Amortization		Net Book Value
Technology/Technical Know-How	$	1,958	$	563	$	1,395	$	1,967	$	474	$	1,493
Tradenames		1,647		240		1,407		1,647		188		1,459
Customer Relationships		2,235		381		1,854		2,115		312		1,803
Other		407		331		76		369		322		47
	$	6,247	$	1,515	$	4,732	$	6,098	$	1,296	$	4,802

Amortization expense charged to income was as follows:

	(Stated in millions)
	2013		2012
Third Quarter	$	80	$	84
Nine Months	$	244	$	245

The weighted average amortization period for all intangible assets is approximately 20 years.

Based on the net book value of intangible assets at September 30, 2013, amortization charged to income for the subsequent five years is estimated to be: remainder of 2013—$89 million; 2014—$349 million; 2015—$339 million; 2016—$321 million; 2017—$307 million; and 2018—$300 million.

10. Long-term Debt

A summary of Long-term Debt follows:

	(Stated in millions)
	Sept. 30, 2013		Dec. 31 2012
3.30% Senior Notes due 2021	$	1,596	$	1,595
4.50% Guaranteed Notes due 2014		—		1,324
2.75% Guaranteed Notes due 2015		1,347		1,318
1.95% Senior Notes due 2016		1,099		1,099
4.20% Senior Notes due 2021		1,099		1,099
1.25% Senior Notes due 2017		999		999
2.40% Senior Notes due 2022		998		998
2.65% Senior Notes due 2016		500		500
Floating Rate Senior Notes due 2014		—		300
Commercial paper borrowings		1,700		—
Other		578		277
	$	9,916	$	9,509

The estimated fair value of Schlumberger’s Long-term Debt at September 30, 2013 and December 31, 2012, based on quoted market prices, was $10.0 billion and $9.9 billion, respectively.

11. Derivative Instruments and Hedging Activities

Schlumberger is exposed to market risks related to fluctuations in foreign currency exchange rates and interest rates. To mitigate these risks, Schlumberger utilizes derivative instruments. Schlumberger does not enter into derivative transactions for speculative purposes.

Foreign Currency Exchange Rate Risk

As a multinational company, Schlumberger conducts business in more than 85 countries. Schlumberger’s functional currency is primarily the US dollar, which is consistent with the oil and gas industry. However, outside the United States, a significant portion of Schlumberger’s expenses is incurred in foreign currencies. Therefore, when the US dollar weakens (strengthens) in relation to the foreign currencies of the countries in which Schlumberger conducts business, the US dollar–reported expenses will increase (decrease).

Schlumberger is exposed to risks on future cash flows to the extent that local currency expenses exceed revenues denominated in local currency that are other than the functional currency. In addition, Schlumberger is also exposed to risks on future cash flows relating to certain of its long-term debt which is denominated in currencies other than the functional currency. Schlumberger uses foreign currency forward contracts and foreign currency options to provide a hedge against a portion of these cash flow risks. These contracts are accounted for as cash flow hedges, with the effective portion of changes in the fair value of the hedge recorded on the Consolidated Balance Sheet and in Accumulated Other Comprehensive Loss. Amounts recorded in Accumulated Other Comprehensive Loss are reclassified into earnings in the same period or periods that the hedged item is recognized in earnings. The ineffective portion of changes in the fair value of hedging instruments, if any, is recorded directly to earnings.

At September 30, 2013, Schlumberger recognized a cumulative net $18 million gain in Equity relating to revaluation of foreign currency forward contracts and foreign currency options designated as cash flow hedges, the majority of which is expected to be reclassified into earnings within the next 12 months.

Schlumberger is also exposed to changes in the fair value of assets and liabilities which are denominated in currencies other than the functional currency. Schlumberger uses foreign currency forward contracts and foreign currency options to hedge this exposure as it relates to certain currencies. These contracts are accounted for as fair value hedges with the fair value of the contracts recorded on the Consolidated Balance Sheet and changes in the fair value recognized in the Consolidated Statement of Income along with the change in fair value of the hedged item.

At September 30, 2013, contracts were outstanding for the US dollar equivalent of $6.4 billion in various foreign currencies, of which $3.2 billion related to hedges of debt denominated in currencies other than the functional currency.

Interest Rate Risk

Schlumberger is subject to interest rate risk on its debt and its investment portfolio. Schlumberger maintains an interest rate risk management strategy that uses a mix of variable and fixed rate debt combined with its investment portfolio and occasionally interest rate swaps to mitigate the exposure to changes in interest rates.

At September 30, 2013, Schlumberger had fixed rate debt aggregating $9.0 billion and variable rate debt aggregating $3.4 billion.

Short-term investments and Fixed income investments, held to maturity, totaled $3.6 billion at September 30, 2013, and were comprised primarily of money market funds, eurodollar time deposits, certificates of deposit, commercial paper, euro notes and Eurobonds, and were substantially all denominated in US dollars. The carrying value of these investments approximated fair value, which was estimated using quoted market prices for those or similar investments.

The fair values of outstanding derivative instruments are summarized as follows:

	(Stated in millions)
	Fair Value of Derivatives				Consolidated Balance Sheet Classification
	Sept. 30, 2013		Dec. 31, 2012
Derivative Assets
Derivatives designated as hedges:
Foreign exchange contracts	$	66	$	26	Other current assets
Foreign exchange contracts		3		22	Other Assets
Interest rate swaps		—		2	Other Assets
	$	69	$	50
Derivatives not designated as hedges:
Foreign exchange contracts	$	12	$	10	Other current assets
Foreign exchange contracts		5		6	Other Assets
	$	17	$	16
	$	86	$	66
Derivative Liabilities
Derivatives designated as hedges:
Foreign exchange contracts	$	12	$	80	Accounts payable and accrued liabilities
Foreign exchange contracts		3		19	Other Liabilities
	$	15	$	99
Derivatives not designated as hedges:
Foreign exchange contracts	$	6	$	3	Accounts payable and accrued liabilities
	$	21	$	102

The fair value of all outstanding derivatives was determined using a model with inputs that are observable in the market or can be derived from or corroborated by observable data.

The effect of derivative instruments designated as fair value hedges and those not designated as hedges on the Consolidated Statement of Income was as follows:

	(Stated in millions)
	Gain (Loss) Recognized in Income
	Third Quarter					Nine Months						Consolidated Statement of Income Classification
	2013		2012			2013			2012			Consolidated Statement of Income Classification
Derivatives designated as fair value hedges:
Foreign exchange contracts	$	—	$	(58	)	$	—		$	(58	)	Cost of revenue
Interest rate swaps		—		1			(2	)		2		Interest expense
	$	—	$	(57	)	$	(2	)	$	(56	)
Derivatives not designated as hedges:
Foreign exchange contracts	$	31	$	(22	)	$	8		$	10		Cost of revenue
	$	31	$	(22	)	$	8		$	10

The effect of derivative instruments in cash flow hedging relationships on income and Accumulated other Comprehensive Loss (AOCL) was as follows:

	(Stated in millions)
	Gain (Loss) Reclassified from AOCL into Income
	Third Quarter						Nine Months						Consolidated Statement of Income Classification
	2013			2012			2013			2012			Consolidated Statement of Income Classification
Foreign exchange contracts	$	33		$	97		$	(8	)	$	(48	)	Cost of revenue
Foreign exchange contracts		(3	)		(5	)		(7	)		(10	)	Research & engineering
	$	30		$	92		$	(15	)	$	(58	)

	(Stated in millions)
	Gain (Loss) Recognized in AOCL
	Third Quarter				Nine Months
	2013		2012		2013			2012
Foreign exchange contracts	$	76	$	142	$	(27	)	$	(35	)

12. Income Tax

Income before taxes which was subject to US and non-US income taxes was as follows:

	(Stated in millions)
	Third Quarter				Nine Months
	2013		2012		2013		2012
United States	$	494	$	455	$	1,425	$	1,578
Outside United States		1,737		1,343		5,096		3,626
	$	2,231	$	1,798	$	6,521	$	5,204

There were no charges or credits in the third quarter of 2013. Schlumberger recorded pretax charges of $32 million ($20 million in the US and $12 million outside of the US) during the third quarter of 2012.

Schlumberger recorded net pretax credits of $572 million during the nine months ended September 30, 2013 ($53 million of charges in the US and $625 million of net credits outside of the US) and pretax charges of $68 million during the nine months ended September 30, 2012 ($41 million in the US and $27 million outside the US). These charges and credits are included in the table above and are more fully described in Note 2 — Charges and Credits.

The components of net deferred tax assets (liabilities) were as follows:

	(Stated in millions)
	Sept. 30, 2013			Dec. 31, 2012
Postretirement benefits, net	$	486		$	543
Intangible assets		(1,464	)		(1,490	)
Investments in non-US subsidiaries		(317	)		(317	)
Other, net		94			114
	$	(1,201	)	$	(1,150	)

The above deferred tax balances at September 30, 2013 and December 31, 2012 were net of valuation allowances relating to net operating losses in certain countries of $237 million and $256 million, respectively.

The components of consolidated Taxes on income were as follows:

	(Stated in millions)
	Third Quarter						Nine Months
	2013			2012			2013			2012
Current:
United States — Federal	$	116		$	195		$	435		$	556
United States — State		16			16			51			51
Outside United States		313			283			859			749
	$	445		$	494		$	1,345		$	1,356
Deferred:
United States — Federal	$	36		$	(66	)	$	12		$	(91	)
United States — State		2			(2	)		(1	)		(4	)
Outside United States		26			10			28			3
Valuation allowance		(3	)		—			(23	)		4
	$	61		$	(58	)	$	16		$	(88	)
	$	506		$	436		$	1,361		$	1,268

A reconciliation of the US statutory federal tax rate of 35% to the consolidated effective income tax rate follows:

	Third Quarter						Nine Months
	2013			2012			2013			2012
US federal statutory rate		35	%		35	%		35	%		35	%
US state income taxes		—			—			—			1
Non-US income taxed at different rates		(12	)		(10	)		(12	)		(11	)
Charges and credits (See Note 2)		—			—			(2	)		—
Other		—			(1	)		—			(1	)
Effective income tax rate		23	%		24	%		21	%		24	%

13. Contingencies

In 2009, Schlumberger learned that United States officials began a grand jury investigation and an associated regulatory inquiry, both related to certain Schlumberger operations in specified countries that are subject to United States trade and economic sanctions. Governmental agencies and authorities have a broad range of civil and criminal penalties that they may seek to impose for violations of trade and economic sanction laws including, but not limited to, disgorgement, fines, penalties and modifications to business practices. In recent years, these agencies and authorities have obtained a wide range of penalties in settlements with companies arising from trade and economic sanction investigations, including in some cases fines and other penalties in the tens and hundreds of millions of dollars. Schlumberger is cooperating with the governmental authorities and cannot currently predict the outcome or estimate the possible impact of the ultimate resolution of these matters.

On April 20, 2010, a fire and explosion occurred onboard the semisubmersible drilling rig Deepwater Horizon, owned by Transocean Ltd. and under contract to a subsidiary of BP plc. Pursuant to a contract between M-I SWACO and BP, M-I SWACO provided certain services under the direction of BP. A number of legal actions, certain of which named an M-I SWACO entity as a defendant, were filed in connection with the Deepwater Horizon incident. Many of these claims were consolidated into multidistrict litigation pending in federal court (the “MDL”). During the first quarter of 2013, the federal court entered its order dismissing all claims against M-I SWACO that were consolidated as part of the MDL.

Schlumberger and its subsidiaries are party to various other legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss is remote. However, litigation is inherently uncertain and it is not possible to predict the ultimate disposition of these proceedings.

14. Segment Information

	(Stated in millions)
	Third Quarter 2013						Third Quarter 2012
	Revenue			Income before taxes			Revenue			Income before taxes
Oilfield Services
Reservoir Characterization	$	3,232		$	983		$	2,835		$	799
Drilling		4,415			894			4,035			727
Production		4,024			707			3,655			537
Eliminations & other		(63	)		(88	)		(27	)		21
		11,608			2,496			10,498			2,084
Corporate & other		—			(179	)		—			(177	)
Interest income⁽¹⁾		—			6			—			8
Interest expense ⁽²⁾		—			(92	)		—			(85	)
Charges and credits (see Note 2)		—			—			—			(32	)
	$	11,608		$	2,231		$	10,498		$	1,798

⁽¹⁾Excludes interest income included in the segment results ($3 million in 2013; $— million in 2012).

⁽²⁾Excludes interest expense included in the segment results ($6 million in 2013; $3 million in 2012).

	(Stated in millions)
	Nine Months 2013						Nine Months 2012
	Revenue			Income before taxes			Revenue			Income before taxes
Oilfield Services
Reservoir Characterization	$	8,996		$	2,616		$	8,066		$	2,183
Drilling		12,820			2,429			11,772			2,102
Production		11,708			1,888			10,896			1,746
Eliminations & other		(164	)		(193	)		(86	)		(26	)
		33,360			6,740			30,648			6,005
Corporate & other		—			(529	)		—			(516	)
Interest income⁽¹⁾		—			15			—			24
Interest expense ⁽²⁾		—			(277	)		—			(241	)
Charges and credits (see Note 2)		—			572			—			(68	)
	$	33,360		$	6,521		$	30,648		$	5,204

⁽¹⁾Excludes interest income included in the segment results ($5 million in 2013; $— million in 2012).

⁽²⁾Excludes interest expense included in the segment results ($17 million in 2013; $5 million in 2012).

15. Pension and Other Postretirement Benefits

Net pension cost for the Schlumberger pension plans included the following components:

	(Stated in millions)
	Third Quarter												Nine Months
	2013						2012						2013						2012
	US			Int’l			US			Int’l			US			Int’l			US			Int’l
Service cost — benefits earned during period	$	19		$	28		$	17		$	21		$	60		$	95		$	51		$	63
Interest cost on projected benefit obligation		38			65			38			62			113			189			114			178
Expected return on plan assets		(47	)		(88	)		(46	)		(82	)		(150	)		(288	)		(139	)		(242	)
Amortization of prior service cost		3			29			3			30			9			88			9			90
Amortization of net loss		28			42			26			22			91			116			72			52
	$	41		$	76		$	38		$	53		$	123		$	200		$	107		$	141

The net periodic benefit cost for the Schlumberger US postretirement medical plan included the following components:

	(Stated in millions)
	Third Quarter						Nine Months
	2013			2012			2013			2012
Service cost — benefits earned during period	$	12		$	7		$	36		$	21
Interest cost on accumulated postretirement benefit obligation		14			14			42			44
Expected return on plan assets		(9	)		(8	)		(28	)		(22	)
Amortization of prior service cost		(1	)		(2	)		(3	)		(6	)
Amortization of net loss		2			3			17			13
	$	18		$	14		$	64		$	50

16. Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss consists of the following:

	(Stated in millions)
	Currency Translation Adjustments			Fair Value of Derivatives			Pension and Other Postretirement Benefit Plans			Unrealized Gains on Marketable Securities		Total
Balance, January 1, 2013	$	(918	)	$	30		$	(3,141	)	$	141	$	(3,888	)
Other comprehensive income (loss) before reclassifications		(139	)		(27	)		(23	)		58		(131	)
Amounts reclassified from accumulated other comprehensive loss		—			15			318			—		333
Income taxes		—			—			(40	)		—		(40	)
Net other comprehensive income (loss)		(139	)		(12	)		255			58		162
Balance, September 30, 2013	$	(1,057	)	$	18		$	(2,886	)	$	199	$	(3,726	)

	(Stated in millions)
	Currency Translation Adjustments			Fair Value of Derivatives			Pension and Other Postretirement Benefit Plans			Unrealized Gains on Marketable Securities		Total
Balance, January 1, 2012	$	(993	)	$	(26	)	$	(2,538	)	$	—	$	(3,557	)
Other comprehensive income (loss) before reclassifications		45			(35	)		(35	)		—		(25	)
Amounts reclassified from accumulated other comprehensive loss		—			58			230			—		288
Income taxes		—			—			(31	)		—		(31	)
Net other comprehensive income		45			23			164			—		232
Balance, September 30, 2012	$	(948	)	$	(3	)	$	(2,374	)	$	—	$	(3,325	)

17. Discontinued Operations

During the second quarter of 2013, Schlumberger completed the wind down of its operations in Iran and, therefore, has classified the historical results of this business as a discontinued operation.

During the second quarter of 2012, Schlumberger sold its Wilson distribution business to National Oilwell Varco Inc. (“NOV”) for $906 million in cash. During the third quarter of 2012, Schlumberger completed the sale of its 56% interest in CE Franklin Ltd. to NOV for $122 million in cash. As Wilson and CE Franklin comprised Schlumberger’s entire Distribution segment, the results of this segment were classified as discontinued operations in the Consolidated Statement of Income.

The following table summarizes the results of these discontinued operations (in millions):

	Third Quarter					Nine Months
	2013		2012			2013			2012
Revenue	$	—	$	110		$	102		$	1,308
Income (loss) before taxes	$	—	$	59		$	(63	)	$	221
Tax expense		—		(6	)		(6	)		(33	)
Net income attributable to noncontrolling interests		—		—			—			(5	)
Gain on divestiture, net of tax		—		12			—			28
Income (loss) from discontinued operations	$	—	$	65		$	(69	)	$	211

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Third Quarter 2013 Compared to Second Quarter 2013

Product Groups

	(Stated in millions)
	Third Quarter 2013						Second Quarter 2013
	Revenue			Income Before Taxes			Revenue			Income Before Taxes
Oilfield Services
Reservoir Characterization	$	3,232		$	983		$	3,014		$	908
Drilling		4,415			894			4,292			804
Production		4,024			707			3,926			625
Eliminations & other		(63	)		(88	)		(50	)		(59	)
		11,608			2,496			11,182			2,278
Corporate & other		—			(179	)		—			(181	)
Interest income ⁽¹⁾		—			6			—			4
Interest expense ⁽¹⁾		—			(92	)		—			(92	)
Charges and credits		—			—			—			664
	$	11,608		$	2,231		$	11,182		$	2,673

Geographic Areas

	(Stated in millions)
	Third Quarter 2013					Second Quarter 2013
	Revenue		Income Before Taxes			Revenue		Income Before Taxes
Oilfield Services
North America	$	3,602	$	730		$	3,357	$	662
Latin America		1,934		399			1,913		394
Europe/CIS/Africa		3,178		714			3,125		643
Middle East & Asia		2,801		730			2,667		655
Eliminations & other		93		(77	)		120		(76	)
		11,608		2,496			11,182		2,278
Corporate & other		—		(179	)		—		(181	)
Interest income ⁽¹⁾		—		6			—		4
Interest expense⁽¹⁾		—		(92	)		—		(92	)
Charges and credits		—		—			—		664
	$	11,608	$	2,231		$	11,182	$	2,673

⁽¹⁾	Excludes interest income and interest expense included in the Product Group and Geographical Area results.

Pretax operating income represents the segments’ income before taxes and noncontrolling interests. The pretax operating income excludes such items as corporate expenses and interest income and interest expense not allocated to the segments, as well as the charges and credits described in detail in Note 2 to the Consolidated Financial Statements, interest on postretirement medical benefits, stock-based compensation costs and amortization expense associated with intangible assets recorded as a result of Schlumberger’s 2010 acquisition of Smith.

OILFIELD SERVICES

Third-quarter revenue of $11.61 billion was up 4% sequentially with International Area revenue of $7.91 billion growing $209 million, or 3% sequentially, while North America Area revenue of $3.60 billion increased $245 million, or 7% sequentially.

Reservoir Characterization Group revenue of $3.23 billion grew 7% while Drilling Group revenue of $4.41 billion increased 3%. These increases were due to strong exploration and drilling activity, both offshore and in key international land markets that benefited Wireline, Testing Services, Drilling & Measurements and M-I SWACO Technologies. WesternGeco revenue also increased from improved global marine vessel activity leading to high asset utilization during the quarter. Production Group revenue of $4.02 billion

grew 3% despite the transfer of the Schlumberger subsea business at the end of the second quarter to OneSubsea, a Cameron/Schlumberger joint venture. Excluding this effect, the Production Group revenue grew 6% sequentially mainly from strong results in Well Services, Completions & Artificial Lift Technologies and Schlumberger Production Management (SPM) projects. The seasonal rebound in Western Canada following the spring break-up accounted for the majority of the sequential increase in Well Services activity with a significant amount also coming from improved efficiency in US land hydraulic fracturing services that enabled deployment of four additional fleets from existing equipment despite continued pricing weakness.

Geographically, North America led the increase with revenue of $3.60 billion growing 7%. The performance in North America was driven by the offshore business setting a new high for quarterly revenue, Western Canada land rebounding from the seasonal spring break-up in the previous quarter, and US land being up from improved efficiency, growing new technology penetration, and market share gains. Middle East & Asia revenue of $2.80 billion increased 5%, mainly from continued growth across a diversified portfolio of projects and activities in Saudi Arabia and Iraq, while high growth rates were posted in the United Arab Emirates and Qatar. Strong WesternGeco marine vessel activity in the Brunei, Malaysia & Philippines and Indonesia GeoMarkets, and increased land drilling and stimulation activities in China also contributed to the strong results. Europe/CIS/Africa revenue of $3.18 billion increased 2% from high WesternGeco marine vessel activity in the North Sea and Equatorial Guinea and peak summer drilling and exploration activity in Russia and Central Asia, while Angola and North Africa activity continued to be subdued by project delays. Europe/CIS/Africa revenue for the third quarter reflects the absence of the results of the subsea business that was transferred to the OneSubsea joint venture in the second quarter of 2013. Excluding the effect of this business transfer, the revenue for Europe/CIS/Africa grew 5%. Latin America revenue of $1.93 billion grew 1% with strong sequential growth posted in Venezuela and Argentina. Higher incremental production results from the SPM project in Ecuador also contributed to growth. These increases, however, were partially offset by a decrease in Brazil due to lower rig count, both on land and in deepwater.

Third-quarter pretax operating income of $2.50 billion was up 10% sequentially. International pretax operating income of $1.84 billion increased 9% sequentially, while North America pretax operating income of $730 million increased 10% sequentially.

Sequentially, pretax operating margin of 21.5% increased 114 basis points (bps), as International pretax operating margin expanded 134 bps to 23.3%. Middle East & Asia posted a 151-bps sequential margin improvement to reach 26.1%, Europe/CIS/Africa increased by 189 bps to 22.5%, while Latin America was steady at 20.6%. The expansion in International margins was due to strong results in Russia & Central Asia resulting from deployment of higher-margin technologies during the peak summer drilling and exploration campaigns. Increased high-margin wireline and seismic activities also helped boost international margins further in Middle East & Asia as exploration work increased. North America pretax operating margin increased 57 bps sequentially to 20.3% as Western Canada recovered following the previous quarter’s seasonal spring break-up. US land margin continued to expand on improving efficiency, better utilization, and lower raw material costs in pressure pumping stimulation services. North America offshore operating margin continued to grow on increasing activity and technology deployment but overall results decreased sequentially due to lower multiclient sales during the quarter.

Sequentially by Product Group, Reservoir Characterization Group pretax operating margin expanded 27 bps to 30.4% due to strong exploration activities that benefited Wireline and Testing Services Technologies. The pretax operating margin of the Drilling Group increased 154 bps to 20.3% through improved Drilling & Measurements operational performance and increased profitability on Integrated Project Management (IPM) projects in the Latin America and Middle East & Asia Areas. Production Group pretax operating margin increased 165 bps to 17.6% on improved profitability in Well Services as Western Canada recovered from the previous quarter’s spring break-up and US land margin continued to expand on improving efficiency, better utilization, and lower raw material costs. SPM projects in Latin America and Asia also continued to be accretive to the group’s expanding margins.

Reservoir Characterization Group

Third-quarter revenue of $3.23 billion increased 7% sequentially. Pretax operating income of $983 million was 8% higher sequentially.

Sequentially, the increase in revenue was driven primarily by higher use of Wireline and Testing Services technologies as a result of strong exploration activity in the Middle East & Asia and Europe/CIS/Africa Areas. This was particularly marked in Russia & Central Asia where drilling & exploration activity increased during the summer. WesternGeco revenue also increased sequentially from improved global marine vessel activity leading to high asset utilization during the quarter, although the effect of this was partially offset by sequentially lower multiclient sales.

Pretax operating margin of 30.4% increased 27 bps sequentially from robust higher-margin exploration activity for Wireline in Russia and the Middle East & Asia Area, while Testing Services across all Areas also contributed to the group’s expanding margin.

Drilling Group

Third-quarter revenue of $4.41 billion increased 3% over the prior quarter. Pretax operating income of $894 million was 11% higher than the second quarter.

Sequentially, revenue increased primarily on strong M-I SWACO performance from the rebound of Western Canada land activity, increased deepwater work in North America, and increased activity in Mexico and Russia. Strong Drilling & Measurements activity in the Middle East & Asia Area, in Russia, and offshore North America also contributed to growth.

Sequentially, pretax operating margin grew 154 bps to 20.3% as a result of improved profitability in Drilling & Measurements due to stronger activity and a more favorable geographical and technology mix. Improved profitability on IPM projects in the Middle East & Asia and Latin America Areas continued to contribute to the group’s expanding margins.

Production Group

Third-quarter revenue of $4.02 billion increased 3% sequentially. Pretax operating income of $707 million was 13% higher sequentially.

The group’s revenue increased 3% despite the transfer of the subsea business to the OneSubsea joint venture. Excluding the effect of the transfer of this business, the group grew 6% mainly from strong results in Well Services, Completions, Artificial Lift and SPM. The rebound from the seasonal spring break-up in Western Canada accounted for the majority of the sequential increase in Well Services while a significant proportion came through improved efficiency in the US land hydraulic fracturing market with the deployment of additional fleets and crews from existing assets despite continued pricing weakness. Strong sales of Completions and Artificial Lift products in the Latin America and Middle East & Asia Areas also contributed to growth.

Pretax operating margin of 17.6% increased 165 bps sequentially on improved profitability in Well Services as Western Canada recovered from the previous quarter’s seasonal spring break-up and US land margin continued to expand on improving efficiency, better utilization, and lower raw material costs. SPM projects in Latin America and Asia also continued to be accretive to the group’s expanding margins.

Third Quarter 2013 Compared to Third Quarter 2012

Product Groups

	(Stated in millions)
	Third Quarter 2013						Third Quarter 2012
	Revenue			Income Before Taxes			Revenue			Income Before Taxes
Oilfield Services
Reservoir Characterization	$	3,232		$	983		$	2,835		$	799
Drilling		4,415			894			4,035			727
Production		4,024			707			3,655			537
Eliminations & other		(63	)		(88	)		(27	)		21
		11,608			2,496			10,498			2,084

Corporate & other		—			(179	)		—			(177	)
Interest income ⁽¹⁾		—			6			—			8
Interest expense⁽¹⁾		—			(92	)		—			(85	)
Charges and credits		—			—			—			(32	)
	$	11,608		$	2,231		$	10,498		$	1,798

Geographic Areas

	(Stated in millions)
	Third Quarter 2013					Third Quarter 2012
	Revenue		Income Before Taxes			Revenue		Income Before Taxes
Oilfield Services
North America	$	3,602	$	730		$	3,303	$	612
Latin America		1,934		399			1,860		333
Europe/CIS/Africa		3,178		714			2,984		645
Middle East & Asia		2,801		730			2,244		511
Eliminations & other		93		(77	)		107		(17	)
		11,608		2,496			10,498		2,084

Corporate & other		—		(179	)		—		(177	)
Interest income ⁽¹⁾		—		6			—		8
Interest expense ⁽¹⁾		—		(92	)		—		(85	)
Charges and credits		—		—			—		(32	)
	$	11,608	$	2,231		$	10,498	$	1,798

⁽¹⁾	Excludes interest included in the Product Group and Geographical Area results.

OILFIELD SERVICES

Third-quarter 2013 revenue of $11.61 billion was 11% higher than the same period last year with International Area revenue of $7.91 billion increasing 12% while North America Area revenue of $3.60 billion was up 9%.

Internationally, higher exploration and development activities in a number of GeoMarkets both offshore and in key land markets contributed to the increase. The increase was led by the Middle East & Asia Area increasing 25%, mainly from robust results across a diversified portfolio of projects and activities in Saudi Arabia, Iraq and United Arab Emirates; increased seismic surveys across Asia; and sustained land and offshore drilling activity in the Australasia and China GeoMarkets. Europe/CIS/Africa Area increased 7% led by the Russia and Central Asia region on strong land activity in West Siberia and robust offshore projects in Sakhalin. The Sub-Saharan Africa region increased on strong development, exploration and seismic activities as well. Latin America Area was 4% higher, mainly due to solid progress on an SPM project in Ecuador and strong IPM results in Argentina.

North America growth was driven by increased offshore revenue as a result of higher drilling and exploration activities. The land business continues to experience pricing weakness in the areas of drilling, stimulation and wireline, although this was more than offset by increased service intensity, improved efficiency, market share gains and new technology penetration.

Reservoir Characterization revenue of $3.23 billion grew 14% while Drilling Group revenue of $4.41 billion increased 9%. These increases were a result of robust exploration and development activities in a number of international GeoMarkets and in North America offshore, particularly in the US Gulf of Mexico. Production Group revenue of $4.02 billion grew 10%.

Third-quarter 2013 pretax operating income of $2.50 billion grew $413 million, or 20% versus the same period last year with International pretax operating income of $1.84 billion increasing 24%, while North America pretax operating income of $730 million increased 19%.

Third-quarter 2013 pretax operating margin of 21.5% grew 166 bps versus the same period last year, as International pretax operating margin expanded 227 bps to 23.3% while North America pretax operating margin increased 176 bps to 20.3%. The expansion in International margins was due to increased high-margin exploration, seismic and deepwater activities while the North America margin improvement was from improved efficiency, better utilization and lower raw material costs despite the weak pricing environment.

Reservoir Characterization Group

Third-quarter 2013 revenue of $3.23 billion was 14.0% higher than the same period last year due to market share gains and higher exploration activity in both offshore and key international land markets.

Year-on-year, pretax operating margin increased 224 bps to 30.4% largely due to the higher-margin exploration activities that benefited Wireline and Testing Services and increased Schlumberger Information Services software sales.

Drilling Group

Third-quarter 2013 revenue of $4.41 billion was 9% higher than the previous year primarily due to the robust demand for Drilling & Measurements services as offshore drilling activity strengthened in the US Gulf of Mexico, Sub-Sahara Africa, Russia and the Middle East & Asia Area and as rig count increased in key international land markets, namely in Saudi Arabia, China and Australia. M-I SWACO and Drilling Tools & Remedial Technologies expanded across all Areas and IPM grew on projects in Iraq, Australia and Argentina.

Year-on-year, pretax operating margin increased 224 bps to 20.3% primarily due to the increase in higher-margin activities of Drilling & Measurements that benefited from higher-margin exploration activities in North America offshore and in the international markets and improved profitability on IPM projects.

Production Group

Third-quarter 2013 revenue of $4.02 billion increased 10% year-on-year on increasing Well Services and Well Intervention activity, strong international sales of Completion and Artificial Lift products and increased SPM project results. While North America land rig count declined, well & stage counts increased through drilling efficiency. Well Services revenue in North America increased despite pricing weakness on improved efficiency with the deployment of additional fleets and crews from existing assets.

Year-on-year, pretax operating margin increased 289 basis points to 17.6% mainly due to Well Services margin expansion mainly in US land due to improving efficiency, better asset utilization and lower raw material costs against the backdrop of a weak pricing environment. SPM projects in Latin America and Asia also continued to be accretive to the group’s expanding margins.

Nine Months 2013 Compared to Nine Months 2012

Product Groups

	(Stated in millions)
	Nine Months 2013						Nine Months 2012
	Revenue			Income Before Taxes			Revenue			Income Before Taxes
Oilfield Services
Reservoir Characterization	$	8,996		$	2,616		$	8,066		$	2,183
Drilling		12,820			2,429			11,772			2,102
Production		11,708			1,888			10,896			1,746
Eliminations & other		(164	)		(193	)		(86	)		(26	)
		33,360			6,740			30,648			6,005

Corporate & other		—			(529	)		—			(516	)
Interest income ⁽¹⁾		—			15			—			24
Interest expense⁽¹⁾		—			(277	)		—			(241	)
Charges and credits		—			572			—			(68	)
	$	33,360		$	6,521		$	30,648		$	5,204

Geographic Areas

	(Stated in millions)
	Nine Months 2013					Nine Months 2012
	Revenue		Income Before Taxes			Revenue		Income Before Taxes
Oilfield Services
North America	$	10,249	$	2,019		$	10,112	$	2,082
Latin America		5,751		1,164			5,483		1,010
Europe/CIS/Africa		9,154		1,865			8,485		1,666
Middle East & Asia		7,874		1,933			6,290		1,372
Eliminations & other		332		(241	)		278		(125	)
		33,360		6,740			30,648		6,005

Corporate & other		—		(529	)		—		(516	)
Interest income ⁽¹⁾		—		15			—		24
Interest expense ⁽¹⁾		—		(277	)		—		(241	)
Charges and credits		—		572			—		(68	)
	$	33,360	$	6,521		$	30,648	$	5,204

⁽¹⁾	Excludes interest included in the Product Group and Geographical Area results.

OILFIELD SERVICES

Nine-month 2013 revenue of $33.36 billion grew $2.71 billion, or 9% versus the same period last year with International Area revenue of $22.78 billion increasing $2.52 billion, or 12%, while North America Area revenue of $10.25 billion increased $136 million, or 1%.

Internationally, higher exploration and development activities in a number of GeoMarkets both offshore and in key land markets contributed to the increase. The increase was led by the Middle East & Asia Area increasing 25%, mainly from robust results across a diversified portfolio of projects and activities in Saudi Arabia, Iraq, and United Arab Emirates; increased seismic surveys across Asia; and sustained land and offshore drilling activity in the Australasia and China GeoMarkets. Europe/CIS/Africa Area increased 8%, led by the Russia and Central Asia region on strong land activity in West Siberia and robust offshore projects in Sakhalin. The Sub-Saharan Africa region increased on strong development, exploration and seismic activities as well. Latin America Area was 5% higher, mainly due to solid progress on an SPM project in Ecuador and strong IPM results in Argentina.

North America growth was driven by increased offshore revenue as a result of higher drilling and exploration activities. This increase was largely offset by a decline in land as a result of a reduction in rig count and pricing weakness in the areas of drilling, stimulation and wireline, although the downward pricing trend slowed during the second and third quarters.

Reservoir Characterization and Drilling Group (primarily Drilling & Measurements, M-I SWACO and Drilling Tools & Remedial) revenue increased 12% and 9%, respectively as a result of robust exploration and development activities in a number of international GeoMarkets and in North America offshore, particularly in the US Gulf of Mexico. Production Group revenue was up 7% mostly from Well Intervention, Completions, Artificial Lift, SPM and Well Services Technologies in the international GeoMarkets.

Year-to-date 2013 pretax operating income of $6.74 billion grew $734 million, or 12% versus the same period last year with International pretax operating income of $4.96 billion increasing 23%, while North America pretax operating income of $2.02 billion declined 3%.

Year-to-date 2013 pretax operating margin of 20.2% increased 61 bps versus the same period last year, as International pretax operating margin expanded 180 bps to 21.8% while North America pretax operating margin contracted 88 bps to 19.7%. The expansion in International margins was due to increased high-margin exploration, seismic and deepwater activities while the North American margin contraction was due to pricing weakness.

Reservoir Characterization Group

Nine-month 2013 revenue of $9.00 billion was 12% higher than the same period last year due to market share gains and higher exploration activity in both offshore and key international land markets.

Year-on-year, pretax operating margin increased 201 basis points to 29.1% largely due to the higher-margin exploration activities that benefited Testing Services, WesternGeco and Wireline Technologies.

Drilling Group

Nine-month 2013 revenue of $12.82 billion was 9% higher than the previous year primarily due to the robust demand for Drilling & Measurements services as offshore drilling activity strengthened in the US Gulf of Mexico, Sub-Sahara Africa, Russia and the Middle East & Asia Area and rig count increases in key international land markets, namely in Saudi Arabia, China and Australia. Drilling Tools & Remedial and M-I SWACO Technologies expanded across all Areas and IPM grew strongly on projects in Iraq, Australia and Argentina.

Year-on-year, pretax operating margin increased 109 bps to 18.9% primarily due to the increase in higher-margin activities of Drilling & Measurements that benefited from higher-margin exploration activities in North America offshore and in the international markets.

Production Group

Nine-month 2013 revenue of $11.71 billion increased 7% year-on-year on increasing Well Intervention activity and strong international sales of Completion and Artificial Lift products and Well Services technologies. SPM also posted strong growth. While North America land rig count declined, well & stage counts increased through drilling efficiency. Despite the efficiency-driven activity increase, Well Services revenue in North America declined on pricing weakness.

Year-on-year, pretax operating margin increased slightly by 10 bps to 16.1%. Margin expanded on improving profitability in SPM, Completions and Artificial Lift but this was offset by a decline in margins of Well Services technologies, primarily in North America, as a result of pricing pressure and cost inflation.

INTEREST & OTHER INCOME

Interest & other income consisted of the following for the third quarter and nine months ended September 30, 2013 and 2012:

	(Stated in millions)
	Third Quarter				Nine Months
	2013		2012		2013		2012
Equity in net earnings of affiliated companies	$	34	$	36	$	84	$	112
Interest income		9		8		21		25
	$	43	$	44	$	105	$	137

OTHER

Research & engineering and General & administrative expenses, as a percentage of Revenue, for the third quarter and nine months ended September 30, 2013 and 2012 were as follows:

	Third Quarter						Nine Months
	2013			2012			2013			2012
Research & engineering		2.5	%		2.8	%		2.6	%		2.8	%
General & administrative		0.9	%		0.9	%		0.9	%		1.0	%

The effective tax rate for the third quarter of 2013 was 22.7% compared to 24.2% for the same period of 2012.

The effective tax rate for the nine months ended September 30, 2013 was 20.9% compared to 24.4% for the same period of the prior year. The effective tax rate for the nine months ended September 30, 2013 was significantly impacted by the charges and credits described in Note 2 to the Consolidated Financial Statements. Excluding the impact of charges and credits, the effective tax rate for the nine months ended September 30, 2013 was 23.2% compared to 24.2% in the prior year. The decrease in the effective tax rate excluding charges and credits for the nine-month period ended September 30, 2013 as compared to the same period of the prior year, is primarily attributable to the fact that Schlumberger generated a smaller percentage of its pretax earnings in North America in 2013 as compared to 2012.

CHARGES AND CREDITS

Schlumberger recorded no charges or credits during the third quarter of 2013. The following charges and credits were recorded during the first nine months of 2013 and 2012. These charges and credits, which are summarized below, are more fully described in Note 2 to the Consolidated Financial Statements.

2013

The following is a summary of the charges and credits during the first nine months of 2013:

	(Stated in millions)
	Pretax			Tax		Net			Consolidated Statement of Income Classification
Gain on formation of OneSubsea joint venture	$	(1,028	)	$	—	$	(1,028	)	Gain on formation of OneSubsea
Impairment of equity-method investments		364			19		345		Impairment & other
Currency devaluation loss in Venezuela		92			—		92		Impairment & other
	$	(572	)	$	19	$	(591	)

2012

Schlumberger recorded the following merger and integration-related charges related to its 2010 acquisitions of Smith and Geoservices. These amounts are classified in Merger & integration in the Consolidated Statement of Income.

	(Stated in millions)
	Pretax		Tax		Net
First Quarter	$	14	$	1	$	13
Second Quarter		22		1		21
Third Quarter		32		4		28
	$	68	$	6	$	62

CASH FLOW

Net Debt represents gross debt less cash, short-term investments and fixed income investments, held to maturity. Management believes that Net Debt provides useful information regarding the level of Schlumberger indebtedness by reflecting cash and investments that could be used to repay debt.

Details of Net Debt follow:

	(Stated in millions)
	Nine Months ended Sept. 30,
	2013			2012
Net Debt, beginning of period	$	(5,111	)		$	(4,850	)
Income from continuing operations		5,160				3,936
Depreciation and amortization ⁽¹⁾		2,737				2,570
Gain on formation of OneSubsea		(1,028	)			—
Non-cash charges		459				—
Stock-based compensation expense		255				251
Pension and other postretirement benefits expense		388				298
Pension and other postretirement benefits funding		(468	)			(462	)
Increase in working capital		(1,182	)			(2,831	)
Capital expenditures		(2,753	)			(3,161	)
Multiclient seismic data capitalized		(300	)			(260	)
Dividends paid		(1,196	)			(1,067	)
Stock repurchase program		(1,526	)			(972	)
Proceeds from employee stock plans		415				386
Business acquisitions, net of cash acquired		(544	)			(713	)
Payment for OneSubsea transaction		(600	)			—
Proceeds from divestiture of Wilson distribution business		—				906
Proceeds from divestiture of CE Franklin business		—				122
Currency effect on net debt		(43	)			49
Other		(279	)			(385	)
Net Debt, end of period	$	(5,616	)		$	(6,183	)

⁽¹⁾	Includes multiclient seismic data costs.

				(Stated in millions)
Components of Net Debt	Sept. 30, 2013			Sept. 30, 2012			Dec. 31, 2012
Cash	$	3,149		$	1,852		$	1,905
Short-term investments		3,286			2,908			4,369
Fixed income investments, held to maturity		363			246			245
Short-term borrowings and current portion of long-term debt		(2,498	)		(1,792	)		(2,121	)
Long-term debt		(9,916	)		(9,397	)		(9,509	)
	$	(5,616	)	$	(6,183	)	$	(5,111	)

Key liquidity events during the first nine months of 2013 and 2012 included:

•	During the second quarter of 2013, Schlumberger paid Cameron $600 million in connection with the formation of the OneSubsea joint venture.

•

On April 17, 2008, the Schlumberger Board of Directors (the “Board”) approved an $8 billion share repurchase program for shares of Schlumberger common stock, to be acquired before December 31, 2011. On July 21, 2011, the Board approved an extension of this repurchase program to December 31, 2013. This program was completed during July r of 2013. On July 18, 2013, the Board approved a new $10 billion share repurchase program for shares of Schlumberger common stock, to be completed at the latest by June 30, 2018. Schlumberger had repurchased $0.6 billion of shares under this new share repurchase program as of September 30, 2013.

The following table summarizes the activity, during the nine months ended September 30, under these share repurchase programs:

	(Stated in millions except per share amounts)
	Total cost of shares purchased		Total number of shares purchased		Average price paid per share
Nine months ended September 30, 2013	$	1,526		19.4	$	78.61
Nine months ended September 30, 2012	$	972		14.1	$	68.99

•	Cash flow provided by operations was $5.9 billion in the first nine months of 2013 compared to $3.4 billion in the first nine months of 2012 primarily reflecting a lower increase in working capital requirements year-on-year.

•	Capital expenditures were $2.8 billion in the first nine months of 2013 compared to $3.2 billion during the first nine months of 2012. Capital expenditures for full year 2013 are expected to be approximately $3.9 billion as compared to $4.7 billion in 2012.

In recent months, Schlumberger began experiencing delays in payment from OGX Petroleo e Gas SA (“OGX”), one of its customers in Brazil. OGX is currently experiencing liquidity issues and is pursuing various options. As of September 30, 2013, Schlumberger had outstanding accounts receivable due from OGX of approximately $195 million. At this time, it is not possible to predict the ultimate outcome of this situation. Depending upon the ultimate outcome, Schlumberger may be required to write-off a portion or all of these receivables in future periods.

At times in recent quarters, Schlumberger has experienced delays in payments from its national oil company customer in Venezuela. Schlumberger operates in more than 85 countries. At September 30, 2013, only five of those countries (including Venezuela) individually accounted for greater than 5% of Schlumberger’s accounts receivable balance of which only two, the United States and Mexico, represented greater than 10%.

As of September 30, 2013, Schlumberger had $6.4 billion of cash and short-term investments on hand. Schlumberger had separate committed debt facility agreements aggregating $4.0 billion with commercial banks, of which $1.8 billion was available and unused as of September 30, 2013. This included $3.5 billion of committed facilities which support commercial paper programs in the United States and Europe. Schlumberger believes that these amounts are sufficient to meet future business requirements for at least the next 12 months.

Schlumberger had commercial paper of $1.9 billion outstanding as of September 30, 2013.

Other Matters

During the second quarter of 2013, Schlumberger completed the wind down of its service operations in Iran. Prior to this, certain non-U.S. subsidiaries of Schlumberger provided oilfield services to the National Iranian Oil Company and certain of its affiliates (“NIOC”). Schlumberger has classified the results of this business as a discontinued operation. All prior periods were restated accordingly.

Schlumberger’s residual transactions or dealings with the government of Iran in the quarter consisted of payments of taxes, duties and other typical governmental charges, along with payments for transportation and hotel accommodations. Two non-U.S. subsidiaries of Schlumberger maintain depository accounts at the Dubai branch of Bank Saderat Iran (“Saderat”) and at Bank Tejarat (“Tejarat”) in Tehran for the deposit by NIOC of amounts owed to non-US subsidiaries of Schlumberger for prior services rendered in Iran. One of the non-U.S. subsidiaries also maintains the account at Tejarat for payment of local expenses such as taxes and utilities. Schlumberger anticipates that it will discontinue its dealings with Saderat and Tejarat following the receipt of all amounts owed to Schlumberger for prior services rendered in Iran.

FORWARD-LOOKING STATEMENTS

This Form 10-Q, and other statements we make contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts, such as our forecasts or expectations regarding business outlook; growth for Schlumberger as a whole and for each of its segments (and for specified products or geographic areas within each segment); oil and natural gas demand and production growth; oil and natural gas prices; improvements in operating procedures and technology; capital expenditures by Schlumberger and the oil and gas industry; the business strategies of Schlumberger’s customers; future global economic conditions; and future results of operations. These statements are subject to risks and uncertainties, including, but not limited to, global economic conditions; changes in exploration and production spending by Schlumberger’s customers and changes in the level of oil and natural gas exploration and development; general economic, political and business conditions in key regions of the world; pricing erosion; weather and seasonal factors; operational delays; production declines; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, hydraulic fracturing services and climate-related initiatives; the inability of technology to meet new challenges in exploration; and other risks and uncertainties detailed in our third-quarter 2013 earnings release, our most recent Form 10-K and other filings that we make with the Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize (or the consequences of such a development changes), or should our underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. Schlumberger disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

For quantitative and qualitative disclosures about market risk affecting Schlumberger, see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of the Schlumberger Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Schlumberger’s exposure to market risk has not changed materially since December 31, 2012.

Item 4. Controls and Procedures.

Schlumberger has carried out an evaluation under the supervision and with the participation of Schlumberger’s management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of Schlumberger’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by this report, Schlumberger’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that Schlumberger files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Schlumberger’s disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to its management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure. There has been no change in Schlumberger’s internal control over financial reporting that occurred during the quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, Schlumberger’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The information with respect to Item 1 is set forth under Note 13—Contingencies, in the Consolidated Financial Statements.

Item 1A. Risk Factors.

As of the date of this filing, there have been no material changes from the risk factors previously disclosed in Part 1, Item 1A, of Schlumberger’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

On April 17, 2008, the Schlumberger Board of Directors (the “Board”) approved an $8 billion share repurchase program for Schlumberger common stock (the “2008 Program”). On July 21, 2011, the Board approved an extension of this repurchase program to December 31, 2013. The program was completed during July of 2013. On July 18, 2013, the Board approved a new $10 billion share repurchase program for shares of Schlumberger common stock, to be completed at the latest by June 30, 2018 (the “2013 Program”). As of September 30, 2013, $9.4 billion remained available for repurchase under the 2013 Program.

Schlumberger’s common stock repurchase program activity for the three months ended September 30, 2013 was as follows:

										(Stated in thousands, except per share amounts)
	2008 Program								2013 Program
	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program		Maximum value of shares that may yet be purchased under the program		Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program		Maximum value of shares that may yet be purchased under the program
July 2013		2,468.6	$	75.72		2,468.6	$	—		312.8	$	82.33		312.8	$	9,972,244
August 2013		—		—		—		—		2,728.0	$	81.67		2,728.0	$	9,751,436
September 2013		—		—		—		—		4,577.3	$	86.91		4,577.3	$	9,353,626
		2,468.6	$	75.72		2,468.6				7,618.1	$	84.85		7,618.1

During the three months ended September 30, 2013, Schlumberger repurchased a total of 10.09 million shares of common stock under both the 2008 Program and the 2013 Program at an average price of $82.61 for a total of $833 million.

In connection with the exercise of stock options under Schlumberger’s incentive compensation plans, Schlumberger routinely receives shares of its common stock from optionholders in consideration of the exercise price of the stock options. Schlumberger does not view these transactions as requiring disclosure under this Item as the number of shares of Schlumberger common stock received from optionholders is not material.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

The barite and bentonite mining operations of M-I LLC, an indirect wholly-owned subsidiary, are subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Report.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit 3.1—Articles of Incorporation of Schlumberger Limited (Schlumberger N.V.) (incorporated by reference to Exhibit 3 to Schlumberger’s Current Report on Form 8-K filed on April 7, 2011)

Exhibit 3.2—Amended and Restated By-laws of Schlumberger Limited (Schlumberger N.V.) (incorporated by reference to Exhibit 3.1 to Schlumberger’s Current Report on Form 8-K filed on July 20, 2012)

* Exhibit 10.1—Form of 2013 One Year Performance Share Unit Award Agreement (Employees in France) under the Schlumberger 2010 Omnibus Stock Option Plan (+)

Exhibit 10.2— Form of Indemnification Agreement (incorporated by reference to Exhibit 10 to Schlumberger’s Current Report on Form 8-K filed on October 21, 2013)

* Exhibit 31.1—Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

* Exhibit 31.2—Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

** Exhibit 32.1—Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

** Exhibit 32.2—Certification Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Exhibit 95—Mine Safety Disclosures

* Exhibit 101—The following materials from Schlumberger Limited’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statement of Income; (ii) Consolidated Statement of Comprehensive Income; (iii) Consolidated Balance Sheet; (iv) Consolidated Statement of Cash Flows; (v) Consolidated Statement of Equity and (vi) Notes to Consolidated Financial Statements

* Filed with this Form 10-Q.

** Furnished with this Form 10-Q.

(+) Compensatory plans or arrangements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized and in his capacity as Chief Accounting Officer.

		Schlumberger Limited (Registrant)
Date:	October 23, 2013	/s/ Howard Guild
		Howard Guild
		Chief Accounting Officer and Duly Authorized Signatory

Exhibit 10.1

SCHLUMBERGER 2010 OMNIBUS STOCK INCENTIVE PLAN 2013 ONE YEAR PERFORMANCE SHARE UNIT AWARD AGREEMENT FOR FRANCE

(“FRENCH QUALIFIED PERFORMANCE SHARE UNITS”)

This Performance Share Unit Award Agreement (“Agreement”) is entered into effective by and between Schlumberger Limited (the “Company”), and (“Employee”), pursuant to the Schlumberger 2010 Omnibus Stock Incentive Plan (the “Plan”) and the sub-plan for France which governs the Performance Share Units granted to employees who are resident of France or who are or may become subject to French tax (i.e. income tax and / or social security tax) as a result of Performance Share Units granted under the 2010 Schlumberger Omnibus Stock Incentive Plan for Employees in France (the “French sub-plan”) (The Plan and the French sub-plan are collectively called the “Plans”). The Performance Share Units granted under this French sub-plan will be deemed French Qualified Performance Share Units and shall be eligible for the specific income and social security tax regime applicable to shares granted for no consideration under Articles L.225-197-1 to L.225-197-5 of the French Commercial Code.

Employee and the Company agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

1. Award. In consideration of Employee’s continued employment as hereinafter set forth, the Company hereby grants to Employee an award of “Performance Share Units”, provided that (except as otherwise provided in this Agreement) the final number of Performance Share Units shall be determined in accordance with the performance criteria set forth on Attachment I. The Target Performance Share Units subject to this award is set forth in an award notice previously delivered to Employee. The Performance Share Units are notional units of measurement denominated in shares of Common Stock. Each Performance Share Unit represents a right to receive one share of Common Stock or equivalent value, subject to the conditions and restrictions on transferability set forth below and in the Plan.

2. Vesting of Performance Share Units. The period of time between the date of grant specified in the award notice (the “Grant Date”) and the vesting of Performance Share Units (and the termination of restrictions thereon) shall be referred to herein as the “Performance Period.” On January 17, 2014 (the “Vesting Date”), a number of Performance Share Units shall vest based on the extent to which the Company has satisfied the performance condition set forth on Attachment I to this Agreement, provided that Employee is continuously employed by the Company in a position eligible to receive Performance Share Units pursuant to this Agreement (as determined by the Committee in its sole and absolute discretion) (an “Eligible Position”) through the Vesting Date and has not experienced a Termination of Employment as of such date.

3. Delivery. Notwithstanding the vesting date of the Performance Share Units, under no circumstances, except in case of employee’s death as provided for in section 3 (a) below or in case of disability of the employee as provided for in section 3 (b) below, shall the delivery of the shares related to a French Qualified Performance Share Unit occur prior to the second anniversary of the Grant Date. The sale of shares issued pursuant to the conversion of the French Qualified Performance Share Units may occur as soon as the shares are delivered to the employee provided the closed periods in section 5 below are respected.

(a) Acceleration on Death. Upon Termination of Employment from the Company by reason of Employee’s death, all French Qualified Performance Share Units that are not vested at that time immediately will become vested in full. The Company shall issue the underlying shares to the Employee’s heirs, at their request, within six months following the death of the Employee. Notwithstanding the foregoing, the Employee’s heirs must comply with the closed periods set forth in Section 5, to the extent and as long as applicable under French law. However, the employee’s heirs shall not need to comply with the restriction on the sale of the shares set forth in Section 4 below.

(b) Acceleration in case of Disability. In case of Disability of the employee, defines as 2^ndor 3^rd category disability under Article L.341-4 of the French Social Security Code, all French Qualified Performance Share Units that are not vested at that time immediately will become vested in full. Notwithstanding the foregoing, the Employee must comply with the closed periods set forth in Section 5, to the extent and as long as applicable under French law. However, the employee shall not need to comply with the restriction on the sale of the shares set forth in Section 4 below.

4. Sale Restrictions. The sale of shares issued pursuant to the conversion of the French Qualified Performance Share Units may not occur prior to the expiration of a two-year period as calculated from the date the Performance Share Units are converted into shares or such other period as is required to comply with the minimum mandatory holding period applicable to French Qualified Performance Units under Article L. 225-197-1 of the French Commercial Code. Notwithstanding the above, in case of employee’s death, the employee’s heirs shall not need to comply with the restriction on the sale of shares. In addition, in the event of the 2nd or 3rd category disability (as defined under Article L.341-4 of the French Social Security Code) of an employee, the employee shall not need to comply with the restriction on the sale of Shares.

5. Closed Periods. Shares underlying French Qualified Performance Share Units may not be sold during the following period (“Closed Periods”):

(a) within the 10 days before or after the publication of the annual accounts;

(b) within a period beginning with the date at which executives of Schlumberger Limited become aware of any information which, were it to be public knowledge, could have a significant impact on the price of shares in and ending 10 trading days after the information becomes public knowledge.

These Closed Periods will apply to grant of French Qualified Performance Share Units as long as and to the extent such Closed Periods are applicable under French law.

6. Settlement of Performance Share Units. Payment of vested Performance Share Units shall be made in shares of Common Stock.

7. Forfeitures of Performance Share Units.

(a) Until the Performance Period specified in Section 2 has expired, upon Employee’s Termination of Employment or Employee ceasing to be employed in an Eligible Position, Employee shall immediately forfeit all Performance Share Units, without the payment of any consideration. Upon forfeiture, neither Employee nor any successors, heirs, assigns, or legal representatives of Employee shall thereafter have any further rights or interest in the Performance Share Units.

(b) Notwithstanding any provision in this Agreement to the contrary, if Employee engages in Detrimental Activity (as defined below) prior to the Settlement Date, Employee shall immediately forfeit all Performance Share Units without the payment of any consideration.

8. Restrictions on Transfer.

(a) Performance Share Units granted hereunder to Employee may not be sold, assigned, transferred, pledged or otherwise encumbered, whether voluntarily or involuntarily, by operation of law or otherwise, other than to the Company as a result of the forfeiture of units as provided herein or pursuant to Section 13.

(b) Consistent with the foregoing, except as contemplated by Section 13, no right or benefit under this Agreement shall be subject to transfer, anticipation, alienation, sale, assignment, pledge, encumbrance or charge, whether voluntary, involuntary, by operation of law or otherwise, and any attempt to transfer, anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits. If Employee shall attempt to transfer, anticipate, alienate, assign, sell, pledge, encumber or charge any right or benefit hereunder, other than as contemplated by Section 13, or if any creditor shall attempt to subject the same to a writ of garnishment, attachment, execution, sequestration, or any other form of process or involuntary lien or seizure, then such attempt shall have no effect and shall be void.

9. Rights as a Stockholder. Employee shall have no rights as a stockholder with regard to the Performance Share Units. Rights as a stockholder shall arise only if the Performance Share Units are settled in shares of Common Stock as set forth in Section 6.

10. Taxes. To the extent that the receipt of the Performance Share Units or the payment upon lapse of any restrictions results in income to Employee for federal or state income tax purposes or in any other cases where the Company holds the view that it is obligated to withhold taxes, Employee shall deliver to the Company immediately prior to the time of such receipt or lapse, as the case may be, such amount of money or shares of Common Stock owned by Employee, at Employee’s election, as the Company may require to meet its obligation under applicable tax laws or regulations, and, if Employee fails to do so, the Company is authorized to withhold from the payment for vested Performance Share Units or from any cash or other form of remuneration then or thereafter payable to Employee an amount equal to any tax required to be withheld by reason of such resulting compensation income. The

Performance Share Units are intended to be “short-term deferrals” exempt from Section 409A and shall be construed and interpreted accordingly.

11. Changes in Capital Structure. As more fully described in the Plan, if the outstanding shares of Common Stock shall at any time be changed or exchanged by declaration of a stock dividend, stock split, combination of shares, or recapitalization, the number and kind of Performance Share Units shall be appropriately and equitably adjusted so as to maintain their equivalence to the proportionate number of shares.

12. Compliance With Securities Laws. The Company shall not be required to deliver any shares of Common Stock pursuant to this Agreement if, in the opinion of counsel for the Company, such issuance would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations or the laws of any other country. Prior to the issuance of any shares pursuant to this Agreement, the Company may require that Employee (or Employee’s legal representative upon Employee’s death or Disability) enter into such written representations, warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws or with this Agreement.

13. Assignment. The Performance Share Units are not transferable (either voluntarily or involuntarily) by the recipient except by will or the laws of descent and distribution. Payment of the Performance Share Units after your death shall be made to your estate or, in the sole and absolute discretion of the Committee, to the person or persons entitled to receive such payment under the laws of descent and distribution. No purported assignment or transfer, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the purported assignee or transferee any interest or right therein whatsoever but immediately upon any such purported assignment or transfer, or any attempt to make the same, the Performance Share Units shall terminate and become of no further effect.

14. Successors and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by Employee, the Company and their respective permitted successors or assigns (including personal representatives, heirs and legatees). Employee may not assign any rights or obligations under this Agreement except to the extent, and in the manner, expressly permitted herein.

15. Limitation of Rights. Nothing in this Agreement or the Plan may be construed to:

(a) give Employee any right to be awarded any further Performance Share Units (or other form of stock incentive awards) other than in the sole discretion of the Committee;

(b) give Employee or any other person any interest in any fund or in any specified asset or assets of the Company (other than the Performance Share Units); or

confer upon Employee the right to continue in the employment or service of the Company or any Subsidiary.

16. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

17. No Waiver. The failure of Employee or the Company to insist upon strict compliance with any provision of this Agreement or the failure to assert any right Employee or the Company may have under this Agreement shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

18. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth in the Plan. Certain other terms used herein have definitions given to them in the first place in which they are used. In addition, the following terms shall have the meanings set forth in this Section 18.

(a) “Detrimental Activity” means activity that is determined by the Committee in its sole and absolute discretion to be detrimental to the interests of the Company or any of its Subsidiaries, including but not limited to situations where a Employee: (i) divulges trade secrets, proprietary data or other confidential information relating to the Company or to the business of the Company and any Subsidiaries, (ii) enters into employment with or provides services to Baker Hughes Incorporated, Halliburton Company, Weatherford International Ltd. or any company listed on the Philadelphia Oil Service Sector Index as of the Grant Date (or any affiliate thereof), (iii) engages or employs, or solicits or contacts with a view to the engagement or employment of, any person who is an officer or employee of the Company or its Subsidiaries, (iv) canvasses, solicits, approaches or entices away or causes to be canvassed, solicited, approached or enticed away from the Company or its Subsidiaries any person who or which is a customer of any of such entities during the Performance Period, (v) is determined to have engaged (whether or not prior to termination) in either gross misconduct or criminal activity harmful to the Company or a Subsidiary, or (vi) takes any action that harms the business interests, reputation, or goodwill of the Company or its Subsidiaries. The Committee may delegate its authority to determine whether Employee has engaged in “detrimental activity” to an officer of the Company or to a subcommittee of the Committee.

(b) “Disability” means such disability (whether physical or mental impairment) which totally and permanently incapacitates Employee from any gainful employment in any field which Employee is suited by education, training, or experience, as determined by the Committee in its sole and absolute discretion.

(c) “Termination of Employment” means the termination of Employee’s employment with the Company and its Subsidiaries. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and its Subsidiaries shall not be considered a Termination of Employment. Any questions as to whether and when there has been a Termination of Employment, and the cause of such termination, shall be determined by the Committee in its sole and absolute discretion.

19.	Miscellaneous.

(a) Employee hereby acknowledges that he or she has received, reviewed and accepted the terms and conditions applicable to this Agreement. Employee hereby accepts such terms and conditions, subject to the provisions of the Plan and administrative interpretations thereof. Employee further agrees that such terms and conditions shall control this Agreement, notwithstanding any provisions in any employment agreement or in any prior awards.

(b) Employee hereby acknowledges that he or she is to consult with and rely upon only Employee’s own tax, legal, and financial advisors regarding the consequences and risks of this Agreement and the award of Performance Share Units.

(c) This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.

(d) This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (except that no effect shall be given to any conflicts of law principles thereof that would require the application of the laws of another jurisdiction). Venue for any dispute arising under this Agreement shall lie exclusively in the state and/or federal courts of Harris County, Texas and the Southern District of Texas, Houston Division, respectively.

Counterparts. This Agreement may be executed in counterparts, which together shall constitute one and the same original.

IN WITNESS WHEREOF, Schlumberger Limited has caused this Agreement to be duly executed by one of its officers thereunto duly authorized, and Employee has executed this Agreement, effective as of the day and year first above written.


SCHLUMBERGER LIMITED

By:		/S/ PAAL KIBSGAARD


EMPLOYEE

ATTACHMENT I Performance Condition

Subject to the provisions of this Agreement, vesting of the Performance Share Units is conditioned upon the Company achieving annual Return on Capital Employed (“ROCE”) of greater than 12.5% for the period beginning on January 1, 2013 and ending on December 31, 2013. ROCE means the sum of (i) income from continuing operations before charges and credits and (ii) the after tax impact of net interest expense, divided by the sum of (x) the average quarterly equity, including noncontrolling interests and (y) the average quarterly net debt.

The number of Performance Share Units that shall vest as of the vesting date shall be equal to the product of (i) the Target Performance Share Units and (ii) the Payout Factor (with any fractional shares rounded up to the next whole share).

The ROCE achieved shall be certified by the Committee and shall determine the Payout Factor based on the chart below. If the Committee determines that the occurrence of one or more extraordinary non-recurring items (determined in accordance with U.S. Generally Accepted Accounting Principles) has materially affected the performance condition, ROCE shall be calculated by excluding the effect of such extraordinary non-recurring items. The Payout Factor for ROCE achievement levels between points on this chart shall be determined by linear interpolation between the values listed. In no event shall the Payout Factor exceed 300%. If the ROCE achieved is less than or equal to 12.5%, the Payout Factor shall be zero.

Average Annual ROCE Achieved	Payout Factor
Less than or equal to 12.5%	0	%
15% (“Target”)	100	%
20%	200	%
Greater than or equal to 25%	300	%

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Paal Kibsgaard, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Schlumberger Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 23, 2013	/s/ Paal Kibsgaard
		Paal Kibsgaard
		Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Simon Ayat, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Schlumberger Limited;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 23, 2013	/s/ Simon Ayat
		Simon Ayat
		Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Schlumberger N.V. (Schlumberger Limited) (the “Company”) for the quarterly period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paal Kibsgaard, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 23, 2013	/s/ Paal Kibsgaard
		Paal Kibsgaard
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Schlumberger Limited and will be retained by Schlumberger Limited and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Exchange Act.

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Schlumberger N.V. (Schlumberger Limited) (the “Company”) for the quarterly period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Simon Ayat, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 23, 2013	/s/ Simon Ayat
		Simon Ayat
		Executive Vice President and Chief Financial Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Exchange Act.

Exhibit 95

Mine Safety Disclosures

The following disclosure is provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977.

The table that follows reflects citations, orders, violations and proposed assessments issued by the Mine Safety and Health Administration (the “MSHA”) to M-I LLC, an indirect wholly-owned subsidiary of Schlumberger. The disclosure is with respect to the three months ended September 30, 2013. Due to timing and other factors, the data may not agree with the mine data retrieval system maintained by the MSHA at www.MSHA.gov.

Three Months Ended September 30, 2013

[unaudited]
(whole dollars)


Mine or Operating Name/MSHA Identification Number	Section 104 S&S Citations	Section 104(b) Orders	Section 104(d) Citations and Orders	Section 110(b)(2) Violations	Section 107(a) Orders	Proposed MSHA Assessments⁽¹⁾	Mining Related Fatalities	Received Notice of Pattern of Violations Under Section 104(e) (yes/no)	Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)	Legal Actions Pending as of Last Day of Period	Legal Actions Initiated During Period	Legal Actions Resolved During Period

Amelia Barite Plant/1600825	0	0	0	0	0	$200	0	N	N	0	0	0

Battle Mountain Grinding Plant/2600828	0	0	0	0	0	$0*	0	N	N	0	0	0

Galveston GBT Barite Grinding Plant/4104675	0	0	0	0	0	$0*	0	N	N	0	0	0

Greybull Milling Operation/4800602	0	0	0	0	0	$0	0	N	N	0	0	0

Greybull Mining Operation/4800603	0	0	0	0	0	$0	0	N	N	0	0	0

Greystone Mine/2600411	0	0	0	0	0	$0*	0	N	N	0	0	0

MI SWACO-Alpine/4104829	0	0	0	0	0	$200*	0	N	N	0	0	0

MI SWACO-Brownsville Grinding Plant/4103033	1	0	0	0	0	$749	0	N	N	0	0	0

(1) Amounts included are the total dollar value of proposed assessments received from MSHA during the three months ended September 30, 2013, regardless of whether the assessment has been challenged or appealed. Citations and orders can be contested and appealed, and as part of that process, are sometimes reduced in severity and amount, and sometimes dismissed. The number of citations, orders, and proposed assessments vary by inspector and also vary depending on the size and type of the operation.

* As of September 30, 2013, MSHA had not yet proposed assessments for 11 Section 104(a) citations at Battle Mountain Grinding Plant; one Section 104(a) citation at Galveston GBT Barite Grinding Plant; five Section 104(a) citations at Greystone Mine; and one Section 104(a) citation at MI SWACO-Alpine.