Malcolm Theobald - Vice President of Investor Relations Andrew F. Gould - Chairman of the Board, Chief Executive Officer Simon Ayat - Chief Financial Officer, Executive Vice President

Bill Herbert - Simmons & Co. Michael LaMotte - J.P. Morgan Ole Slorer - Morgan Stanley Kurt Hallead - RBC Capital Markets Dan Pickering - Tudor & Pickering Geoff B. Kieburtz - Citigroup Ken Sill - Credit Suisse Brad Handler - Wachovia Douglas Becker - Banc of America Michael Urban - Deutsche Bank David Anderson - UBS James Crandell - Lehman Brothers Robin Shoemaker - Bear Stearns William Sanchez - Howard Weil Robert MacKenzie - Friedman, Billings, Ramsey Kevin Simpson - Miller Tabak & Co.

Ladies and gentlemen, thank you very much for standing by. Welcome to the Schlumberger earnings conference call. (Operator Instructions) We’ll now turn the call over to your host, Vice President of Investor Relations, Malcolm Theobald. Please go ahead.

Thank you, Rod. Welcome to today’s fourth quarter and full year 2007 results conference call for Schlumberger Limited. Before we begin today’s call, I’d like to review the logistics and agenda. Some of the information in today’s call may include forward-looking statements as well as non-GAAP financial measures. A detailed disclaimer and other important information are included in the FAQ document which is available on our website or upon request. For today’s agenda, Simon Ayat, Chief Financial Officer, will begin with commentary on the financial results. And then Andrew Gould, our Chairman and Chief Executive Officer, will provide an overview of the fourth quarter and full year activity and outlook. Finally, we’ll take questions from the audience. And now, Simon Ayat will discuss the financials.

Thank you, Malcolm. Ladies and gentlemen, good morning and thank you for participating in this conference call. Fourth quarter net income was $1.11 per share excluding the $0.01 gain from the sale of four oil rigs in Russia, up $0.02 sequentially and $0.19 above the same quarter of last year. Oilfield services Q4 activity growth was strong at 6.2% sequentially, helped by artificial lift and completions product sales. In addition, there was increased third quarter revenue on IPM projects. WesternGeco reported very strong multi-client sales. However, this was offset by the seasonal drop in the high margin marine activity due to vessel transits and dry docks. Oilfield services generated $1.5 billion in pretax operating income, up $30 million from the third quarter but margins declined by 116 basis points to 28.2%. By area, oilfield services highlights were as follows. My comments are on a sequential basis. North America pretax margin declined 151 basis points to 25.4% due to continued erosion of pressure pumping stimulation pricing in the U.S. land market and weather related operational restrictions in the Rockies. This was partly compensated by increased activity in Canada and a better quarter in the Gulf of Mexico, where the gradual return of drilling rigs after last quarter’s hurricane season. Latin America processor margin was 158 basis points lower to reach 22.1%. Activity on margins improved in all geo-markets with the exception of the Mexico Central America geo-market, where revenue increased but the impact of the flooding in Mexico, project start-up costs and increased third party revenue negatively impacted the overall Latin America margins. For ECA, the Europe, CIS, Africa area, the pretax margin declined 130 basis points to 27.9%, as Russia exhibited the seasonal slowdown at the beginning of the winter season of offshore [settling]. Strong activity was reported in the North Sea, Caspian, and Continental Europe geo-markets. Middle East Asia pretax margin increased by $36 million but in percentage terms declined by 65 basis points to 35%. Improvements were recorded in the Arabian geo-market with higher equipment sales and overall increased activity in both Saudi Arabia and Kuwait. The India geo-market benefited from strong deepwater exploration activity and in Asia, improvement in the China, Japan, Korea were offset by declines in the Thailand, Vietnam geo-market on reduced exploration. WesternGeco pretax income was $272 million, with a sequential drop in margin by 452 basis points to 34.1%. Marine activity and margins dropped as a result of the seasonal repositioning of the fleet with increased transit time and dry docks. The reduction in marine margins could not be compensated by the surge in multi-client sales. Now turning to Schlumberger as a whole, the effective tax rate was 20.4%, slightly lower than last quarter, reflecting the continued shift of activity from North America to the rest of the world. In 2008, we expect the effective tax rate to remain in the low 20s. However, there may be some quarterly volatility due to the geographic mix of activity. The earnings for the quarter included $33 million of expenses relating to stock-based compensation costs in line with the previous quarter. We expect this expense for the full year 2008 to be approximately $108 million, a $44 million increase over 2007. At year-end, net debt was $1.9 billion. Significant liquidity events during the quarter included $557 million for the stock buy-back program; $984 million for CapEx, including multi-client; and $699 million for the Eastern Echo transaction. CapEx excluding $65 million dollar of multi-client surveys capitalized was $919 million for the quarter, reaching $2.9 billion for total year 2007. CapEx for 2008 is expected to be $3.8 billion, including $2.9 billion for oilfield services and $870 million for WesternGeco, of which $365 million is for the vessels acquired through the Eastern Echo transactions. During the quarter, we bought back 5.8 million shares for $557 million at an average price of $95.65. This brings the total share buy-back under the 40 million share repurchase program announced in April ’06 to 29.9 million shares for $2.2 billion at an average price of $72.53 per share. The Board of Directors approved a 20% dividend increase, representing a quarterly dividend of $0.21 per share, reflecting the positive long-term outlook. And now I turn the conference over to Andrew. Andrew F. Gould: Thank you, Simon. Good morning, everybody. Schlumberger revenues in 2007 grew by 21%, driven by strong demand for oilfield services, particularly in the overseas areas where year-on-year growth reached 31% in Middle East and Asia, 30% in Europe, CIS, Africa, 29% in Latin America. By contrast, North America remained essentially flat with 2006. All technologies showed double-digit improvement, with drilling and measurements, well testing, and integrated product management recording the highest overall growth rates. In the fourth quarter, strong sequential growth contributed significantly to this overall performance. However, the quarter’s results were impacted by a number of events that resulted in less-than-satisfactory margins. These included a less favorable oilfield services revenue mix with lower pricing and well stimulation related activities on land in the United States; a number of exceptional and seasonal weather effects in the U.S., Mexico, the North Sea, and Russia; the expensing of significant start-up costs associated with the IPM Mezosoico and Alianza projects in Mexico, where the second half of 2007 saw integrated product management mobilize and start 17 drilling rigs within the scope of these projects; an increased marine utilization of the WesternGeco fleet through vessel transit and dry dock inspections that overweighed a sequential 83% in multi-client sales. However, with the exception of the pricing for well stimulation related activities on land in the U.S., these events were largely seasonal and do not reflect any change in the underlying trends. Looking at the quarter in more detail, the sequential growth of 3% in North America was led by the Canada geo-market with increased demand for well services and wireline technologies; activity partially recovered from the hurricane season in the U.S. Gulf Coast with higher demand from wireline, well testing, and well services activities; and SIS product sales were higher across the North America area. However, this largely positive performance was offset by continuing price erosion in well stimulation related activities in U.S. land geo-markets, as well as by seasonal land access constraints in the west and lower activity in Alaska. In Latin America, sequential growth reached 9% overall and was seen in all geo-markets, primarily driven by IPM activities in Mexico and Central America, Peru, Colombia, Ecuador, and Venezuela, Trinidad, and Tobago. Increased demand for well testing technologies and higher artificial lift and completion systems product sales in Latin America South, together with increased artificial lift and completion systems product sales in Mexico, Central America and Peru, Colombia, and Ecuador, contributed to these results. In Europe, CIS and Africa, the sequential growth of 4% was driven by the North Sea geo-market, with increased demand for wireline and well services technologies, together with higher artificial lift systems and SIS product sales. Greater demand for drilling and measurements in the Caspian geo-market, increased sales of artificial lift in North Russia, and high demand for drilling measurements, well services and well testing in Continental Europe contributed to growth. Performance was partially offset by the usual seasonal slowdown in Sakhalin and continuing subdued activity in Nigeria. The Middle East Asia are recorded double-digit sequential growth of 10% as the Arabian geo-market saw high demand for drilling and measurements and wireline services, as well as higher completions and artificial lift systems and SIS product sales. Sequential growth was also driven by a higher demand for exploration related drilling and measurements technologies and artificial lift systems in Qatar; increased demand for drilling and measurements and well testing services in China, Japan, Korea; and higher deepwater exploration driven demand for wireline, drilling and measurements technologies, together with SIS product sales in India. Among oilfield services technologies, both well services and completion systems made significant progress during the quarter. New well services technologies, including members of the contact family of stage fracturing and completion services penetrated further into a number of key markets with a broad range of efficient and effective stimulation services. In North America, StimMAP and AbrasiFRAC technologies saw greater interest and activity where their respective abilities to place fracturing treatments more accurately and to treat all productive sands in a single operation led to increased production at lower cost. AbrasiFRAC technology was also deployed in Saudi Arabia for Saudi Aramco, where coil tubing was used to apply the treatment in a natural gas well to result in an increase of production ten-fold. Elsewhere in Saudi Arabia, StageFRAC technology was evaluated on two natural gas wells where improved production rates and increased estimates at ultimate recovery led to plans for further deployment in future horizontal gas wells. Completion systems secured a significant contract for the Reslink ResFlow, passive in-flow completion technology in addition to increased sales in the quarter. This award followed tests by Saudi Aramco in both sandstone and carbonate reservoirs that showed excellent correlation between the production logging program and simulations developed by Saudi Aramco and Schlumberger. This success came just 12 months after the acquisition of Reslink by Schlumberger. WesternGeco full year 2007 revenues increased 20% over 2006, while pretax operating income grew by 31%. Q-Technology revenues reached $1.14 billion, up 57% versus 2006. Overall vessel utilization for the full year was 93%. The fourth quarter results, however, were hit by the seasonal effects of vessel transits and dry docks, which led to lower overall vessel utilization and which were significant enough to outweigh the exceedingly strong sequential increase in multi-client sales, which were up 83%. The strength in the seismic market, particularly in marine, led us to review our long-term plans for the fleet and this led to our acquisition of Eastern Echo during the quarter. The six high-performance vessels on order are for high capacity and are ideally suited to the exploration and development markets of the future. Our plans are to equip all six vessels with Q systems as the boats become available in 2009 and beyond. In another acquisition, we acquired an additional 5.5% in Framo Engineering, taking our holding to a majority of 52.75%. A Norwegian based company, Framo provides multiphase booster pumps, flow metering equipment and swivel stack systems and is an important contributor to sub-sea engineering projects. Shorter term growth presents a more complex picture than the immediate past. Natural gas drilling in North America is not expected to vary greatly in the absence of any severe winter weather in the remaining two months. High utilization of the existing off-shore rig fleet worldwide and limited new builds entering the market during the year will not only limit growth but will also make activity vulnerable to rig operating efficiency. However, growth in land activity outside North America will remain strong, while seismic exploration services worldwide will remain in high demand, both on land and off-shore, as the industry gears up for the expanding exploration cycle. Within this context, technology that assists our customers in mitigating risk in exploration and development projects, increasing our recovery factors, and improving operational efficiency will remain at a premium. In the longer term, however, current levels of drilling are increasingly insufficient to meaningfully slow decline rates, improve reservoir recovery, or add sufficient new production capacity. The explosion in exploration licenses awarded in the last three years, the continual expansion of the number of new offshore rigs being ordered for delivery through and beyond the end of the decade, and the industry-wide, as well as our own plans to increase both CapEx and research and development spend are clear indicators of future growth. It is our view that only a global economic recession that lowers demand can flatten this trend. In line with this positive outlook, I am pleased to announce that the Board of Directors has increased the quarterly dividend for the fourth consecutive year and I will now hand the call back to Malcolm.

Thank you, Andrew. Rod, we will now open the call for questions.

(Operator Instructions) Our first question will come from the line of Bill Herbert with Simmons. Please go ahead. Bill Herbert - Simmons & Co. : Andrew, let’s start with seismic here and on the one hand, the rhetoric and the message with respect to seismic in terms of visibility of revenue growth and customer demand being exceeding buoyant, is encouraging. On the other hand, one would have expected that backlog would have been stronger quarter on quarter and I’m just curious as to what’s going on on that front. Andrew F. Gould: Why is your assumption that backlog is weaker, Bill? Bill Herbert - Simmons & Co. : Well, it was flat, wasn’t it? Andrew F. Gould: Marine. Bill Herbert - Simmons & Co. : Yes. Andrew F. Gould: Was down. Bill Herbert - Simmons & Co. : No, no, but overall backlog of $1.2 billion -- Andrew F. Gould: Okay, sorry, sorry, sorry -- no, well -- it’s about the same as it was last year and it depends what your bidding tactic is. If you look at the number if inquiries to bid, there is no decline. In fact, there’s an increase. Are you following me, Bill? In other words, some people decide to bid first and some people decide to bid later. Bill Herbert - Simmons & Co. : That I understand. Maybe asking the question differently -- what percentage of your fleet is basically contracted into 2008? Andrew F. Gould: At this point, the available vessel months is probably about -- still available -- or booked vessel months is about 60%, available is about 40. Bill Herbert - Simmons & Co. : Okay, switching gears to North America, was the preponderance of the weakness quarter on quarter with regard to margins attributable to pressure pumping pricing? Andrew F. Gould: Yes. Bill Herbert - Simmons & Co. : Okay, and then going forward, if one assumes that -- and no doubt a difficult question to answer but I am going to try it anyway in terms of asking it -- assuming flattish drilling conditions in North America, relative to Q4 margins, what is a reasonable expectation for the evolution of margins as they unfold in 2008? Andrew F. Gould: Well, I think that’s a very difficult question to answer because we now probably have a reasonable outlook on what our portfolio is. We are flat out at lower prices and therefore it’s a question of how much operational efficiency and reasonable cost savings you can generated. But I don’t -- all I will say is I don’t think you’ll see another precipitous decline -- I’ll probably regret this -- I don’t think you’ll see another precipitous decline from now on. Bill Herbert - Simmons & Co. : Okay, and so with regard to the evolution of your cost cutting and right-sizing of the business, is that pretty much behind you? Andrew F. Gould: Yes. Bill Herbert - Simmons & Co. : Okay. Thank you very much, Andrew.

Next we will go to the line of Michael LaMotte with J.P. Morgan. Please go ahead. Michael LaMotte - J.P. Morgan : Thanks and good morning. Andrew, for the Eastern hemisphere, margins were down. I understand mobilization issues and Mexico impacting Latin America. I guess the first question is two parts -- A, is there mobilization issues in Eastern hemisphere markets in Q4? And B, how should we think about mobilization impacting margins as we go into Q1 and ’08? Andrew F. Gould: Well, I think that the bulk of the -- I don’t think you should call it mobilization. It’s start-up costs rather than mobilization, Michael. I think the bulk of it was in Mexico, though we did also start up some projects in Russia. But on the scale of things, they were tiny compared to Mexico. Going forward, yes, we still have rigs to mobilize in Mexico in Q1. We haven’t quite finished mobilizing those projects, so there will be some much less a degree I think of start-up costs in the first quarter. Michael LaMotte - J.P. Morgan : Okay, so much more consistent with what we’ve seen before Q4 in Mexico? Andrew F. Gould: Yes. Michael LaMotte - J.P. Morgan : Okay, and then secondly, Andrew, if I think about the interpretations that are likely to come out of this conference call, perhaps you could maybe mitigate some of that concern and give us a few lines -- just a bottom line of what you think the key takeaways ought to be. Andrew F. Gould: Well, I think the key takeaway is that as of today, worldwide 93% of the jack-ups are utilized, 97% of the semi-submersibles are utilized, and 100% of the drill ships are utilized. And the actual additions this year relative to the size of the total fleet are tiny, which means that offshore activity will be extremely vulnerable to rig moves, any dry docking -- anything that impacts the operational efficiency of the fleet and therefore, as I put in the comment, the scope to grow offshore in ’08 is relatively limited. The scope to grow onshore is still fairly unlimited but as we all know, mobilizing projects onshore takes a long time. You only have to look at the delays we’ve seen in some of the Eastern Hemisphere countries in the last year to realize that the extent to which activity is going to increase is going to be good but it’s not going to be great. North America I really don’t think I have to make any more comments about and then finally, if you look at the number of exploration licenses that have been let to us in the last three years all around the world, you have to believe that seismic is going to be very strong again. So overall, I see 2008 as a transition year into a cycle which is going to be dominated offshore because I don’t know whether you follow the numbers but the number of offshore rigs on order in the last quarter of this year increased by 14. So you have this huge wave of 160 offshore rigs for delivery from now through to 2011. So this, Michael, for me is a transition year. Michael LaMotte - J.P. Morgan : Okay. How about technology penetration in ’08? Andrew F. Gould: Well actually, I think that the strongest element of our portfolio in 2008 which uses a little bit of everything of what we do is going to be IPM and then the classic technologies will still, I think, and everything to do with DDMWD, LWD continue to be very strong. And wireline will shift gradually towards more exploration and well services will wait for a recovery in Canada and the U.S. Michael LaMotte - J.P. Morgan : Great. Thanks, Andrew.

Next we will go to the line of Ole Slorer with Morgan Stanley. Ole Slorer - Morgan Stanley: Thank you very much. Just to follow-up on the last question, IPM becoming a driver in 2008, does that mean that there will be some margin pressure, given that IPM tends to have a lot of third-party revenues booked? Fairly good from a cash flow but as we model margins, they should maybe be a little bit lower? Is that the right -- Andrew F. Gould: Yeah, actually we are going to do a study on that in the first quarter and decide how we disclose it to you. Because as you rightly point out, as IPM grows, it becomes a significant portion and if you remember once before we did actually tell you what revenues were at that level, so let us do a study and if we think it is really material information, we will make a disclosure. Ole Slorer - Morgan Stanley: Okay, that would be helpful, I think. Also, looking at your CapEx for the oilfield in ’06, it was 50% up in ’07. We grew by half that and in ’08, you are guiding to about half that growth again. Does that reflect that your business is becoming more mature or is it a low point in ’08? Is 13% really sustainable to justify that kind of growth -- Andrew F. Gould: I think that there was an awful lot of catch-up in the previous we years and actually, seismic is increasing hugely and it will be even higher in ’09. And the other segments, it’s quite difficult to make a balance at this point in time but there could be a re-acceleration in ’09. Ole Slorer - Morgan Stanley: Okay, that makes sense. Finally, on the offshore rigs coming in, I mean, you do see quite a number of jack-ups coming in -- Andrew F. Gould: Yeah. Ole Slorer - Morgan Stanley: -- a little delayed but still, any assumptions on market share loss within your caution on the effects of these rigs? Andrew F. Gould: Well, a lot of these rigs don’t have contracts yet. Ole Slorer - Morgan Stanley: Well, assume that they will go to work, given where rates are, so I don’t think they will be sitting on the beach when you are getting $180,000, $70,00 for a jack-ups. Andrew F. Gould: Well they won’t get $180,000 or $70,000 for jack-ups. A lot of our customers are waiting for them to be idle to tender. I don’t see why you are talking about loss of market share though. Ole Slorer - Morgan Stanley: Well, Brazil for example in the direction drilling, although you [quoted that] for completion. I was wondering -- Andrew F. Gould: That’s one contract. Ole Slorer - Morgan Stanley: Okay. Well, thank you very much.

Next we will go to the line of Kurt Hallead with RBC Capital Markets. Kurt Hallead - RBC Capital Markets: Andrew, the question I have for you is parsing through your comments here as you talk about the complex near-term, you obviously give one potential negative on North America, or a negative on North America, potential negative on offshore and then two positives. Do you think in aggregate those, the positives completely offset the negatives, or is there a little bit more risk on the negative side? Andrew F. Gould: I think I’m trying to say that I still think that in the -- while there will be extremely healthy growth outside North America, there is still a slight assumption that it’s going to -- maybe I’m wrong but a lot of people are assuming that it’s going to be a bit better than I think in 2008. It’s a specifically 2008 event. Kurt Hallead - RBC Capital Markets: Okay and then getting some kind of feedback from certain investors and clients about a perception of the margins peaking for your business, I think predicated on your outlook for exploration and technology, how would you counteract that argument that your margins have kind of peaked and they might not improve from here? Andrew F. Gould: Well, I think that I would say that the purely demand led pricing has peaked but as the cycle moves more towards exploration, complex offshore developments, there is no reason why we shouldn’t see our margins reassert themselves. Kurt Hallead - RBC Capital Markets: Thank you.

Next we will go to the line of Dan Pickering with Tudor & Pickering. Dan Pickering - Tudor & Pickering: I would like to focus on your commentary in the press release and I think you said it several times here today -- shorter term growth presents a more complex picture. Does that mean you think for the next couple of quarters we are actually slower sequentially? And if that’s the case, is that a domestic or an international or a seismic commentary, or is it some combination of the -- Andrew F. Gould: Sorry, by slower you mean negative, Dan? Dan Pickering - Tudor & Pickering: Yes, that’s correct. Andrew F. Gould: I think the only risk of negative is still in North America. Internationally, the growth will be there but it may be a bit slower than some people are assuming. Dan Pickering - Tudor & Pickering: And I guess my takeaway from the call is basically you feel expectations are a little high and so, I mean, over under for revenue growth internationally is 15% year over year, something like that? Andrew F. Gould: I just think there are some people out there, not everybody, whose expectations for international growth are a little too bullish, Dan. Dan Pickering - Tudor & Pickering: I would anticipate that’s going to change after this call. I guess the other question I have is as we look at -- Andrew F. Gould: Sorry, can I just say 2008 -- international growth 2008 and then people need to go back to the offshore story in 2009. Dan Pickering - Tudor & Pickering: I’m with you. Okay, and then as it relates to North America, I’ll follow-up with Malcolm just to try and understand the numbers, but I want to hear you say it -- the other businesses, if we looked at wireline or directional or LWD, et cetera, any softness in pricing or activity or share for you guys? Andrew F. Gould: I am limiting my comments to land, okay? I am not talking about offshore Gulf of Mexico. There is minimal price weakness -- and when I say minimal, it’s compared to well services -- in wireline and everything else is growing very nicely. Dan Pickering - Tudor & Pickering: All right. Thank you.

Next we will go to the line of Geoff Kieburtz with Citigroup. Please go ahead. Geoff B. Kieburtz - Citigroup: Maybe I wrote it down wrong, Andrew, but I seem to remember from last quarter’s conference call that you said something along the lines of international growth in ’08 will be at least as great as it was in ’07. Are you revising that or was I just wrong? Andrew F. Gould: I don’t think I ever said that, Geoff. We’ll have to look at the transcript, but if I did, I’m surprised. Geoff B. Kieburtz - Citigroup: That was not your -- Andrew F. Gould: It may have been limited to -- I would have made it in the context of certain markets but not in every market. Geoff B. Kieburtz - Citigroup: So as we look at what we now know to be the international growth in ’07, it is expected to be overall somewhat slower in ’08? Andrew F. Gould: ’08 will be slower than ’07 in international markets overall, yes. Geoff B. Kieburtz - Citigroup: Okay, and your comment on North America not having another precipitous drop. Was that a margin or a revenue comment? Andrew F. Gould: Margin. Geoff B. Kieburtz - Citigroup: Okay. And could you just share kind of how you are thinking about the somewhat obviously increased risk of a U.S. recession? Your comment at the end of the press release is one that you’ve made before about only a global economic recession. How are you thinking about that in the context of managing Schlumberger? Andrew F. Gould: Our planning assumption is that the famous coupling will not take place, at least this year, and therefore any drop in OECD demand for oil and gas will be more than offset or will be countered by the increase in India, China, and the Middle East to a point that it will not affect the oil price to a level where our customers will seriously curtail their plans. Geoff B. Kieburtz - Citigroup: Okay, so you don’t put a very high risk probability on that scenario for ’08? Andrew F. Gould: On the U.S. recession, I -- I mean, personally, I think we’re there. On the coupling with the Asia and the Middle East, I just somehow don’t think so. Geoff B. Kieburtz - Citigroup: Okay. Thanks very much.

Next we will go to the line of Ken Sill with Credit Suisse. Ken Sill - Credit Suisse: Thank you. You guys are so careful with your outlook comments and us simple-minded sell-siders are very focused on numbers. So obviously international growth is still good, not as good as last year but it was really phenomenal last year. But we are still talking probably in the teens for overall international growth in ’08, is that fair? Andrew F. Gould: That would be a reasonable assumption. Ken Sill - Credit Suisse: Okay, and then I guess the big question is margin assumptions or incremental margin assumptions, right? So when you say that some people seem to be a little bit too bullish on their expectations, I guess what I’m reading into is there’s some guys on consensus that seem to be a bit high, one of those came down this week. But are you concerned with overall expectations reflected in estimates in stock prices or just for the people that are kind of out-layers right now? Andrew F. Gould: Well, I’m not -- you know, I don’t -- Ken Sill - Credit Suisse: You don’t give specific guidance, I know that, but I was just -- Andrew F. Gould: I am concerned that generally the assumption on the level of international top line growth is too high, and you just said it. It’s no longer what it is in ’07. It’s coming down to somewhere in the teens and that I think is a fair assumption. Does that mean there will be degradation in overseas margins? I don’t really think so. We obviously won’t have the same capacity for incremental margins that we had at 30% growth when you are in the teens. Ken Sill - Credit Suisse: So when you are looking at overall margins in ’08, if you look at international margins, you would expect those margins to be at least where they were this year or do you think they will actually be better in ’08, because -- Andrew F. Gould: You are going too far, Ken. I think that -- I’m not going to give specific margin guidance either but I don’t think there’s any reason to assume that we can’t maintain the margins we had in ’07. Ken Sill - Credit Suisse: Okay, and we’ve already asked about IPM. I guess the one specific question I’ve got and then I’ll give up is obviously in seismic, you had huge margin swings based on vessel utilization, on mobilizations and downtime. Is there -- because margins swung from 32% to 38% or whatever they were doing -- is there kind of an average margin, do you guys think? Or could you possibly give us a little bit better guidance in the future on the -- Andrew F. Gould: Well, it’s pretty difficult because it’s almost impossible to understand what the margin is going to be until you know the nature of the multi-client sales you’ve made in the quarter. It’s not so much marine. I mean, marine when you have transit or dry docks, you get hurt badly because you can’t cut costs for the two weeks you are in the dry dock or wherever it happens to be. But the thing that really you are unable to predict is the swing in multi-client margins given the age of the elements of the portfolio you might or might not serve in any one quarter. Ken Sill - Credit Suisse: So overall, WesternGeco should expect nice growth and more dramatic in ’09 as you put more vessels -- and is it fair to say that pricing in seismic is actually still improving? Andrew F. Gould: Marine seismic pricing is still very buoyant, yes. Ken Sill - Credit Suisse: So in line with the margins you are talking about everywhere else, we shouldn’t expect a degradation and possibly better but who knows? Andrew F. Gould: Right. Ken Sill - Credit Suisse: That’s what happens with multi-client. Okay, well my view based on your comments this quarter versus last quarter is you are actually fairly confident about where things are going and seem a little bit less bearish on North America. Is that -- am I reading that correctly or am I just putting my own wishful thinking -- Andrew F. Gould: Well, I think -- I am going to repeat this again. I think expectations on international growth were too high and I think North America, I’m not saying the market is turning around but we have better visibility on ’08 than I had in the last quarter and it’s going to stabilize somewhat. Ken Sill - Credit Suisse: Okay, thank you very much.

Next we will go to the line of Dan Pickering with Tudor & Pickering. Dan Pickering - Tudor & Pickering: Back again -- Andrew, I just want to clarify; you’ve talked a lot about expectations for growth. Has the actual international outlook deteriorated in the last two or three months? Andrew F. Gould: Sorry, wait a minute, Dan -- you are going to have to qualify that by telling me what period are you talking about? Dan Pickering - Tudor & Pickering: Okay, so you are saying 2008 expectations are too high. Andrew F. Gould: Internationally. Dan Pickering - Tudor & Pickering: Internationally and the question I’m asking is from your perspective, have those markets for 2008, have they changed to the down side in the last couple of months? In other words -- Andrew F. Gould: From my perspective, no. There is no change whatsoever. Dan Pickering - Tudor & Pickering: Okay, so we’ve got a Wall Street expectations issue. We do not have a business is getting worse issue. Andrew F. Gould: Absolutely. Dan Pickering - Tudor & Pickering: Okay. All right and then final question, seismic, the vessel moves, I guess I was a little surprised because in Q2 we had moved a lot of things around. We had a lot of down time and then we hear about it again here in Q4 and did some markets soften up so we had to move -- Andrew F. Gould: No, Dan, there is a summer market and a winter market. The summer market is a very high-priced market in the North Sea and the winter market is a lower priced market on the coast of Africa, in the Mediterranean, et cetera. So you get vessel transits in the second quarter of vessels moving up to the North Sea and then the third quarter and this year in the fourth quarter, because everyone stayed in the North Sea as long as they could, you get the reverse. Dan Pickering - Tudor & Pickering: Okay. All right. Thank you.

Next we will go to the line of Brad Handler with Wachovia Capital Markets. Brad Handler - Wachovia: A couple of different things, I guess, coming back to some of the same questions but if you could help us understand in the U.S. stimulation market, presumably the pricing has rolled over with respect to contracts and that process would apply to more of your customer base in perhaps 1Q and 2Q, so there is some additional pricing pressure that’s offset, perhaps by cost efficiencies and volume? Is that the right way to think about the stable outlook that you are presenting? Andrew F. Gould: I think when I say that we know more about North America in 2008, I am saying that because we rolled over a fairly high percentage of our contracts already and therefore we have a better visibility of where we are going. And as you point out, the risks that remain are the prices at which we renew contracts that have not been renewed and the efficiency of our cost containment measures. Brad Handler - Wachovia: Fair enough. Just as a follow-up to that, I’m just curious about pressure on recently renewed contracts you may be experiencing from your clients, just them coming back and saying I hear pricing is continuing to drop and what else can you do for me. Have you found any re-opening like that? Andrew F. Gould: Well, yes, there is always some but it’s not huge at this point in time. Brad Handler - Wachovia: All right, that’s helpful. Switching gears, just -- interesting and maybe I just missed something, but interesting comment about the relationship with TGS-NOPEC on that one client survey. Could you give us a little color on how that came to pass and whether that’s something we should, the partnership is something we might look for in the future? Andrew F. Gould: Well, I think the partnership will be opportunistic in as much as if we have a common interest in investing in a survey, we’ll do it together. I think you have to -- I don’t know how you follow the seismic business but TGS has had some issues in a proposed merger and they probably badly needed some boat capacity. Brad Handler - Wachovia: Okay, so that was that -- you’re presenting it as something they may have reached out to you -- is that how they always run their -- Andrew F. Gould: -- it was an opportunity for both parties to get the shoot done. Brad Handler - Wachovia: Okay, that’s helpful. Thank you.

Next we will move to the line of Douglas Becker with Banc of America Securities. Douglas Becker - Banc of America: I just wanted to touch base on the international margins. You said they were somewhat stable or are expected to be somewhat stable going forward but in the fourth quarter we did see them trending down, implying incremental margins were going to be a little bit lower. What are the dynamics that allow margins to be stable in the international markets in ’08? Andrew F. Gould: Well, I actually didn’t say they would be stable but I tried to point out that the events in the fourth quarter that affected international margins were largely either seasonally weather related or related to the mobilization or start-up costs with IPM projects and therefore with the exception of U.S. land pressure pumping, were somewhat exceptional in nature. So the question that I was asked earlier is on revenue growth that is considerably lower than 2007, can you maintain margins and overseas and generally, I said yes. Douglas Becker - Banc of America: Understood. And then just on the Gulf of Mexico, was the weakness that we are seeing weather related in the fourth quarter completely recovered -- in the third quarter, rather -- was that completely recovered in the fourth quarter? Andrew F. Gould: No, only the -- the rigs only got really back to work at the scale they were before the third quarter in December. Douglas Becker - Banc of America: So potentially some upside from fourth quarter level to -- Andrew F. Gould: Yeah, not huge in the Gulf of Mexico in ’08 but there is some, yes. Douglas Becker - Banc of America: Thank you.

Next we will go to the line of Michael Urban with Deutsche Bank. Michael Urban - Deutsche Bank: I know you are sick of talking about it at this point but yet another question on North America. You’ve been somewhat negative for quite a while now and that’s obviously turned out to be correct. Now seeing some stability but maybe reading too much into your comments, as people often do. But what you seem to have taken out of there is a longer term bullishness with respect to activity levels driven by decline rates out there. Do you think we’ve, just by your actions, at least, I’m wondering if you think we’ve maybe turned a corner or created some kind of base level of production, or maybe it’s your concern about recession but I’m just wondering if that has changed. Andrew F. Gould: Are you talking specifically about North American gas? Michael Urban - Deutsche Bank: Yes, North American gas, yes. Andrew F. Gould: I think we are at a level that can probably sustain the current level of production for some time. So I don’t think that’s the case in Canada. I think that ’08 is a plateau year. I cannot say that I am optimistic on ’09 yet because as you know, so much depends on storage, how much LNG gets diverted to the U.S. this year, et cetera. But I think the rig count is at a level where it can sustain the base level of production we have. Michael Urban - Deutsche Bank: Okay, so to be absolutely clear -- a flat rate count in the U.S. to sustain production? Andrew F. Gould: Yes. Michael Urban - Deutsche Bank: Okay. That’s all for me. The rest of my questions were answered. Thank you.

Next we will go to the line of David Anderson with UBS. David Anderson - UBS: I have a question on your Russian business -- according to our analysts over there, they are projecting the major producers to increase spending by about 17% in ’08 and then moderating a bit in ’09. As the largest service company over there in Russia, does that taint your views on the spending growth rate over there, particularly how you see that trending over the next couple of years? Andrew F. Gould: I think that to fulfill their ambition of increasing production 2% a year, I find that figure a little low, the 17%. I would anticipate that if they maintain their objective of increasing oil production by 2% a year, they will spend more. David Anderson - UBS: How linked do you think that is to the tax regime on the upstream companies? My understanding is that the tax regime is pretty onerous over there so they are not really incentivized too much. What do you think the likelihood of that changing is and do you think that’s kind of the key to opening that market up a little bit further for you guys? Andrew F. Gould: I think that the Russian oil industry is just as sensitive to tax as anybody else and they have this profit, this tax on everything above $26 or $28 a barrel. And I think that the government will -- if it -- I think the government authority understands that if it needs people to invest more, it is going to have to raise that ceiling and I suspect it will get raised. Do you think that’s an ’08 proposition and is that impacted by the election or -- Andrew F. Gould: I’m not an expert on Russian politics but I think people understand and it will happen. David Anderson - UBS: Okay. A different subject, you talked about a $5 billion backlog in IPM work. Considering that probably most of that is probably in Latin America, I assume you are already shifting capital down to that market, like you’ve sent much of the start-up costs. Just wondering if the [Toupi] discovery kind of changes your plans. I guess in other words, will you be shifting even more capital down to that market in advance of expected higher activity levels in that region? Andrew F. Gould: I think that the [Toupi] discovery is not an IPM prospect but in terms of the overall level of activity in Brazil, I suspect that given the delivery of new rigs, it’s far more an ’09 phenomena than an ’08 phenomena. David Anderson - UBS: Okay, but you will be shifting more capital down there though? Andrew F. Gould: Oh yeah, absolutely. David Anderson - UBS: Okay. That’s all for me. Thank you.

Next we will go to the line of Jim Crandell with Lehman Brothers. Please go ahead. James Crandell - Lehman Brothers : A couple of questions; first of all, Andrew, to follow-up on the international E&P spending outlook and I’m relating it back to my survey but it shows growth in international spending of 16%. If you look at past years where you’ve had a very high oil price environment, typically beginning of the year budgets get revised upwards, so it seems to me we could be looking at a year of international spending growth, let’s just say of 20%-plus like we saw in 2007. I believe on the last call you said that you would think that your revenues internationally would grow faster than the rate of international E&P spending internationally. Andrew F. Gould: The only distinction I would place on that, Jim, is whether that spending is on land or offshore, and to the extent that it is more to -- if it was offshore, I would have no hesitation whatsoever in saying we would grow faster than the spend. But I fear a lot of it is on land in 2008, whereas you know our revenue or the service intensity per rig is not the same. James Crandell - Lehman Brothers : Would you be disappointed if at the end of the year, looking at your revenue growth internationally and it was in the teens, if your three major competitors on average all showed meaningfully higher international revenue growth? Now granted they are coming from smaller bases and I understand that but do you think that it is possible that you may grow at a meaningfully lower level than your three major competitors internationally? Andrew F. Gould: I would be very, very disappointed. James Crandell - Lehman Brothers : Okay, that’s good to hear. I would hope you would be. Just switching gears to a strategic question, would you be interested in buying relatively new U.S. stimulation equipment on a reasonably sizable basis and either moving that equipment internationally or consolidating it into your domestic suite? Andrew F. Gould: Well, a lot of the equipment that has been built in the U.S. is not going to go international because it is not suitable. But no, I suspect for international we would build our own. Small amounts of equipment that might become available in the U.S. in distressed circumstances we would certainly look at and I stress small. James Crandell - Lehman Brothers : Okay, good. And my final question is certain of your competition is alleging on recently very large IPM contracts in Mexico that you have been bidding very aggressively, much less than on prior phases of that same contract and presumably at lower margins because they are now certainly more interested in bidding on IPM work in that market. Comments on that? Andrew F. Gould: Well, I would suspect I know exactly what bid you are talking about and I would just remind them that we have had an infrastructure in place for 10 years and therefore our cost of operation is probably much very different from theirs. James Crandell - Lehman Brothers : How about though the relationship -- if I’m pronouncing it right, it’s something like [schecontepak] three but relative to two, which is comparable size, that you are bidding something like $250 million less on the entire project. Andrew F. Gould: To my knowledge, there is no outstanding bid on [schecontepak] at this point in time. James Crandell - Lehman Brothers : Okay. That’s what I had. Thanks.

Next we will go to the line of Robin Shoemaker with Bear Stearns. Robin Shoemaker - Bear Stearns: Just a couple of quick questions -- I know you are going to do a study on the IPM issue and can you just remind us now on your IPM project, the range of revenues that come from third party, which might be as low as X percent and as high as Y percent, just to give us a little bit of a sense there is, what that number -- Andrew F. Gould: I would say that they can be all the way from 10% to 50%. Robin Shoemaker - Bear Stearns: Okay. All right. Andrew F. Gould: For example, we don’t necessarily own the rigs we use and therefore we contract rigs from drilling contractors and therefore obviously the whole rig rate would fall into third-party revenue when we bill it on the customer. Robin Shoemaker - Bear Stearns: Sure. And integrated project management as a percentage of your international revenue, where are we now looking at this year? Andrew F. Gould: I haven’t actually calculated it for 2008 but we are somewhere between 10% and 15%, I would say, including the Schlumberger services. Robin Shoemaker - Bear Stearns: Okay, one further question -- on Eastern Echo as you acquired six vessels and we saw your certainly your rationale reasoning for expanding the fleet, when you looked at the total vessel expansion, seismic vessel expansion, Eastern Echo plus others, did you come to the conclusion that there were not enough vessels overall being built to meet demand or how does that work out in terms of the total expansion of the seismic vessel fleet, given that we have found ourselves in the past with overcapacity in this arena? Andrew F. Gould: Actually, we evaluated all the potential acquisition candidates in the seismic field and there are two elements here. One is the number of vessels and the other is the time to market and our calculation assumed the price we pay for Eastern Echo, the price to complete the vessels, and the availability of them would mean that the financial returns would be very satisfactory. So we weren’t actually thinking in terms of total market. We were thinking in terms of how we could expand our own fleet. Robin Shoemaker - Bear Stearns: Okay, and the total market size you expect to grow? Andrew F. Gould: We are more and more confident that there will be no issues with marine utilization in 2009 or 2010 and certainly I think the large players, ourselves and PGS and CDG, all have enough 20-year old vessels to mitigate the situation if that turned out not to be true. Robin Shoemaker - Bear Stearns: Okay. Thank you.

Next we will go to the line of Michael LaMotte with J.P. Morgan. Michael LaMotte - J.P. Morgan : Andrew, a quick follow-up -- I just want to make sure that there’s clarity on this revenue and margin talk for ’08. Clearly on the international side, talking somewhere in the teens for revenue growth. On the issue of margin, I think when people think growth in IPM or a higher IPM mix, we think lower margin. That’s not what you are saying, correct? Year-on-year? Andrew F. Gould: No, what I’m saying Michael is that the degree of third-party revenue that we have from the IPM contracts is growing and therefore, we are going to do an exercise to look at whether or not we disclose that to you every quarter in such a way that you can assume that that has a lower margin than the Schlumberger services and therefore you can make some adjustment. I mean, I’m assuming that the Schlumberger services, be they to IPM or anybody else, we can produce satisfactory margins in 2008 compared to 2007. Michael LaMotte - J.P. Morgan : Okay, and so when we think of mid-teens -- Andrew F. Gould: Overseas, sorry -- overseas. Michael LaMotte - J.P. Morgan : So when we think of teens revenue growth, would that be including or ex IPM? Andrew F. Gould: It would be including IPM. Michael LaMotte - J.P. Morgan : Lastly, with a decelerated growth in international and capacity growth on a part of a lot of your competitors in those markets, are you concerned at all about a capacity overshoot in this year of transition of ’08? Andrew F. Gould: I think that, because as I tried to point out in the third quarter, capacity overshoots will be in local markets and not general. That’s why -- actually, that’s one of the reasons I used the work complex. In other words, market intelligence is going to be very important in 2008. Michael LaMotte - J.P. Morgan : Thank you.

Next we will go to the line of William Sanchez with Howard Weil. Please go ahead. William Sanchez - Howard Weil: Thanks. My questions were answered.

Thank you. We’ll next move to the line of Rob MacKenzie with FBR. Please go ahead. Robert MacKenzie - Friedman, Billings, Ramsey: Thank you. Andrew, a couple of quick follow-up questions from before -- in the press release, you mentioned a three-year wireline logging contract for Petrobras. Can you give us a feel for how much of their future business that encompasses? Andrew F. Gould: I hate getting into these discussions of individual contracts but it’s one of the largest contracts we ever signed. Robert MacKenzie - Friedman, Billings, Ramsey: And so, with [Toupi] in mind, that would imply that it represents a fairly large share of their future business? Andrew F. Gould: Well, yeah. I think it’s -- you know, the size of Schlumberger is such that it is not any one contract in any one country that is going to move the needle for you guys. But in as much as there is a big expansion of Petrobras’ offshore rig commitments in 2009, yes, it will turn out to be a very big contract. And it may or may not be [Toupi] -- it may be other fields. I’m not actually aware of what their drilling plan is. Robert MacKenzie - Friedman, Billings, Ramsey: Okay, fair enough. And then another service you guys recently introduced, or have been doing some jobs with is the StimMAP live service, real-time FRAC monitoring. That’s got to be fairly small so far but it’s an important play. Can you give us a feel for the growth potential of that technology, and perhaps even leading to market share gains and stimulation for you guys? Andrew F. Gould: Well, I think that is -- so you are quite right to point out at the moment we have actually not a great deal of capability to do it real time, because the difference here is the fact that you are doing it in real time and therefore, you can have people monitoring the FRAC propagation and changing the job as they frac. So it’s more I think a function now in 2008 of how many crews we can field to do that. And I know there’s a substantial increase but it’s coming off quite a low number, and will it improve the quality of what we do and therefore allow us to capture market? Yes, I suspect it will. Robert MacKenzie - Friedman, Billings, Ramsey: Okay, and then the last question before I turn it back is coming back to the TGS-NOPEC joint venture in the Gulf of Mexico, you guys are contributing the vessels, the Q technology. What is TGS bringing to the table? I’m a little bit unclear on that. Andrew F. Gould: Well, TGS is bringing to the table the fact they had a great deal of pre-commitment from customers for this survey and the fact that they have a much larger sales force than we do. And as I said, it’s opportunistic, it makes sense to do it. You shouldn’t read anymore into it than that. Robert MacKenzie - Friedman, Billings, Ramsey: Okay. Thank you.

Thank you. The last question we’ll have time for comes from the line of Kevin Simpson with Miller Tabak. Please go ahead. Kevin Simpson - Miller Tabak & Co.: Thanks, and I’ll try to be quick; Andrew, I was a little surprised at the extent of the implied start-up expenses on the two Mexican contracts. With IPM getting larger, is that something that we’re going to need to factor in when we make our quarterly assessments? Andrew F. Gould: Well, I think that if it’s in a new area, as the Mezosoico and Alianza contracts are because they are in south Mexico, not in the north. We mobilized 17 large drilling rigs, they are not small, in six months. You can assume there are going to be start-up costs. So you know, when you see a large project, you should assume some degree of start-up costs, particularly if it’s in an area where we are not already working. Kevin Simpson - Miller Tabak & Co.: Okay, and then second, the seismic quarterly earnings pattern, this is the first time in a while that 4Q was below 3Q. Is that likely to be the pattern going forward with marine becoming so important now relative to multi-client? Or is this -- Andrew F. Gould: -- is quite difficult to tell because as I said earlier, what happened this year was a lot of the North Sea -- the North Sea boats which normally move in Q3 actually moved in Q4. So I can’t -- I wouldn’t be able -- I can’t give you an honest answer on that now. What we will do I think is give you better information going forward when we know about dry docks and transiting. But we were caught by surprise by these late moves this year. Kevin Simpson - Miller Tabak & Co.: Okay, and I guess one last thing, which you probably won’t answer but on the contracts that you signed for stimulation in the U.S. ’08 versus ’07, is pricing down in the double digits? Andrew F. Gould: Yes, the low double digits -- just scratching the double digit. Kevin Simpson - Miller Tabak & Co.: Thanks a lot. That’s it for me.

On behalf of the Schlumberger management team, I would like to thank you for participating in today’s call. Rod will now provide the closing comments.

Ladies and gentlemen, this conference will be available for replay beginning today at 2:15 p.m. Eastern Standard Time, continuing through Friday, the 15th of February at midnight. You may access the executive playback service or via the Internet at slb.com/irwebcast. For the AT&T executive webcast service -- or excuse me, the AT&T executive dial-in service, please dial 1-800-475-6701, or from international locations, dial area code 320-365-3844 and enter the access code 899456. So for the replay service, you may access the Internet at slb.com/irwebcast, or at 1-800-475-6701, or internationally 320-365-3844 and enter the access code 899456. That does conclude the call for today. Thank you for your participation and for using the AT&T executive teleconference service. You may now disconnect.