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

Michael LaMotte - J.P. Morgan Bill Herbert - Simmons & Co. Dan Pickering - Tudor Pickering Holt Charles Minervino - Goldman Sachs David Anderson - UBS Geoff B. Kieburtz - Citigroup James Crandell - Lehman Brothers Brad Handler - Wachovia Ken Sill - Credit Suisse Kevin Simpson - Miller Tabak & Co. Benjamin Dell - Sanford C. Bernstein Pierre Turner Kurt Hallead - RBC Capital Markets Robin Shoemaker - Bear Stearns

Ladies and gentlemen, thank you for standing by and welcome to the Schlumberger earnings conference call. (Operator Instructions) I would now like to turn the conference over to the Vice President of Investor Relations for Schlumberger Limited, Malcolm Theobald. Please go ahead, sir.

Thank you, Gail. Welcome to today’s first quarter 2008 results conference call for Schlumberger Limited. Before we begin, I would like to review the logistics and format of today’s call. 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 information are included in the FAQ document which is available on our website or upon request. And now for the call participants and format; joining the call from New Delhi, India are both Andrew Gould, Chairman and Chief Executive Officer, and Simon Ayat, our Chief Financial Officer. Prior to Andrew’s overview of the first quarter and his comments on the outlook, Simon will first review the quarter’s financial results. And now I’ll turn the call over to Simon.

Thank you, Malcolm. Ladies and gentlemen, thank you for participating in this conference call. First quarter income from continuing operations was $1.06 per share, down $0.05 sequentially and $0.10 above the same quarter of last year. An additional $0.03 gain was reported in discontinued operations. Oilfield services first quarter revenue grew 3% sequentially, reflecting growth in North America and Europe/CIS/Africa areas. The seasonal year end strength in artificial lift and completions equipment sales, as well as SIS software sales reverted to normal levels in Q1 while traditional service segments, such as wireline, drilling and measurement, and well services showed sequential growth. WesternGeco reported weak multi-client sales only partly offset by an improvement in marine activity. Oilfield services generated $1.5 billion in pretax operating income, down $33 million from the fourth quarter of last year but margins declined by 140 basis points to 26.8%. By area, oilfield services highlights were as follows. My comments are on a sequential basis. North America pretax margin improved 21 basis points to 25.6%, with strong seasonal activity in Canada and Alaska, augmented by full recovery in the Gulf Coast with the return of deepwater rigs, more than offsetting land access operational restriction in the Rockies, winter weather in the U.S. north, and pricing deterioration for well stimulation related services in the U.S. central market. Latin America pretax margin declined by 203 basis points to 20.1%. In Mexico, IPM project [Recount] continued to grow with more activity but increased levels of project start-up costs and a high proportion of third-party managed services impacted our margins negatively. Reduced activity and the less favorable revenue mix due to project delays in the Peru, Colombia, Ecuador, and Brazil geomarkets also reduced margins. For ECA, the Europe/CIS/Africa area, the pretax margin declined 163 basis points to 26.3%, as Russia exhibited the seasonal slowdown off-shore cycling and incurred the start-up costs for several new projects while operational delays in the North Sea hampered drilling and measurement activity. Strong activity was reported in the West Africa, Caspian, and Continental Europe geomarkets. The area included the consolidation of FRAMO for the first time. Middle East/Asia pretax margin declined by 10 basis points to 34.9%. While the year-end high level of artificial lift and completions equipment sales, particularly in the Arabian geomarket was not repeated, exploration driven improvements in the Australia, Thailand, Vietnam, East Mediterranean and Gulf geomarkets more than offset seasonal weather slowdown in the China, Japan, Korea geomarket. WesternGeco pretax income was $196 million, was a sequential drop in margin by 502 basis points to 29.1%. The reduction in multi-client sales and margins following the record sale in the previous quarter more than offset the modest recovery in marine performance. Now turning to Schlumberger as a whole, the effective tax rate was 19.1%, which was lower than last quarter. The decrease was primarily attributable to the favorable resolution of tax examination in a number of countries. The ETR is expected to be in the low 20s for the total year 2008. The earnings for the quarter included $41 million dollar of expenses relating to stock-based compensation costs. Net debt of $2.2 billion at the end of the quarter. Significant liquidity events during the quarter included $564 million for a stock buy-back program and $833 million for CapEx, including multi-client. CapEx excluding $81 million of multi-client survey capitalized was $772 million for the quarter. During the quarter, we bought back 7 million shares for $564 million at an average price of $81.16 per share. As we are approaching the completion of the $40 million share buy-back, the board of directors approved a new repurchase program for $8 billion to be completed before the end of 2011. And now I will turn the conference over to Andrew. Andrew F. Gould: Thank you, Simon and good morning, everybody. Seasonal factors, weather related events, as well as lower product and software sales following the exceptional levels in the fourth quarter had a general dampening effect on sequential revenue gains with a consequent effect on margin. Oilfield services revenue growth was strongest in the Canada, U.S. Gulf Coast, South Russia, Australia, Papua, New Guinea, Western Southern Africa, and Alaska geomarkets. Sequential revenue also grew through consolidation of FRAMO into the Europe/CIS/Africa area. Among the technologies, demand was strongest for wireline, drilling and measurements, well services, and well testing activities. In terms of geography, North America recorded the strongest growth as activity increased in the Gulf of Mexico, with the return of deep water rigs together with stronger demand for wireline and drilling and measurements exploration related services. Canada saw a robust winter drilling season with high demand for wireline services in a renewed exploration market, as well as for well services technologies. Alaska benefited from exploration related growth. The combination of these factors, which largely outweighed seasonal and weather events, as well as lower product [inaudible], translated into stronger margins, although pricing weakness continued to be seen in U.S. Central for well stimulation related activities. In Latin America, growth was strongest in the Venezuela, Trinidad, and Tobago geomarkets from higher demand for drilling and measurements, wireline and well services, as well as from higher SIS product sales. However, this was more than offset by project transitions and delays in Peru, Colombia, Ecuador, and in Mexico and Central America. Lower artificial lift and SIS product sales also offset overall growth. Against the slight decline in revenue, margins lowered more significantly as the integrated project management activity in Mexico continued its rapid ramp-up of new projects with an additional seven drilling rigs being deployed in the quarter, resulting in heavy initial start-up costs being incurred. The majority of these new projects are in areas where wells are much deeper and hotter and as a result, take longer to drill. Growth in the Europe, CIS and Africa was driven by a variety of positive factors. These included higher artificial lift system sales and increased well services market penetration in South Russia, strong demand for well services technologies in Continental Europe, increased demand for drilling and measurement technologies in Western Southern Africa and the Caspian, and higher IPM and drilling and measurements activity in North Africa. Area sequential growth also benefited from the consolidation of FRAMO revenue. These positive factors were however mitigated by operational delays in the North Sea, winter weather in East Russia, and lower SIS product sales. Sequential revenue in Middle East and Asia area declined slightly as exploration driven growth for wireline and well testing services in the Australia, Papua New Guinea geomarket, together with strong demand for wireline, well testing, and well services in the Gulf, East Mediterranean and the Thailand/Vietnam geomarkets were offset by the impact of winter weather in the China/Japan/Korea and lower completions and artificial lift systems product sales also contributed to this performance. At WesternGeco, first quarter results fell sequentially as multi-client revenues declined steeply from the record levels of the fourth quarter. The Gulf of Mexico lease sale late in the quarter, coupled with the increased cost of wide-azimuth data sets that are fast becoming the norm for new multi-client purchases, delayed new activity until customers absorbed the results of the March leasing round. In contrast, however, Marine revenue increased as both vessel utilization and productivity improved following the vessel dry docks and seasonal transits for the prior quarter. Data processing recorded a sequential increase in revenue while land declined as a result of project completions in North America and lower demand in the Middle East. Looking ahead in the short to medium term, we expect a number of scheduled dry dock expense and vessel transit in the second quarter as activity switches from winter to summer seasons, while the uneven pattern in multi-client activity is likely to persist throughout the year. WesternGeco technology applications saw growth during the quarter with a confirmation of a further set of Q-Marine time lapse surveys in the Norwegian sector of the North Sea for StatoilHydro on the Norne and Heidrun fields. These surveys represent the fifth successive survey at Norne and the third at Heidrun. Both form part of the ongoing efforts to maximize recovery from both fields through the identification of unswept and partially swept areas. Q technology has also been selected for deployment of Q-Seabed surveys on the Oseberg Sor and Gullfaks fields, where the technology’s low frequency capability is considered to be of particular value. And in the sub-salt environment of the U.S. Gulf of Mexico, processing has begun of integrated Q-Marine gravity and magnetotelluric electromagnetic data sets that form part of the E-Octopus multi-client wide-azimuth acquisition program. Other new technology applications include well services FUTUR active set-cement which provides long-term zonal information through self-healing properties upon contact with any hydrocarbon based formation fluid. In Canada, this unique technology was used in an active geological area where maintaining cement integrity has been problematic. And in Italy, its use began on a 50 well natural gas storage field to prevent leakage of storage gas where wells are subject to alternating injection and production, in line with storage gas use. Another new well services technology unique to Schlumberger, ACTive coil tubing, was deployed in Western Canada and Malaysia. The ACTive family of services uses fiber-optic cable in a down hole sensor package to monitor progress from a range of coil tubing enabled operations in real time. In addition to these technology deployments, we passed a significant milestone in recruiting and training during the quarter with the opening of the Siberian Training Center in the Russian Federation in March. This new center includes all the facilities needed to train and develop our Russian languages employees in artificial lift, directional drilling, well cementing and stimulation, data services and information solutions, as well as integrated project management. The current training capacity is expected to double over the next year to reach 350 students. In closing, I would like to reiterate some comments that I made at the Howard Weil conference in New Orleans earlier this month. In the absence of severe global recession leading to a steep drop in demand, the thin cushion of excess oil supply and the failure to stem decline rates in many countries, coupled with a higher-than-expected drawdown of U.S. natural gas storage, are all factors that lead us to conclude the growth will strengthen as the year progresses. We remain convinced that current investment levels are insufficient to both stem decline and to explore and develop new reserves. As a result, we anticipate that the current cycle of exploration and production spending will remain stronger for a longer period than we originally anticipated. I am now going to hand the call back to Gail.

(Operator Instructions) Our first question will come from Michael LaMotte with J.P. Morgan. Please go ahead. Michael LaMotte - J.P. Morgan: I guess the first question has to do with the comment that you made on the fourth quarter conference call regarding ’08 being a transition year, particularly listening to some of the Geco commentary for Q2 and second half, I’m wondering if you wanted to perhaps revisit that within the context of is 2008 going to be a transition year or is it a first half transition? Andrew F. Gould: Well, I think that when I made the comment in December, Michael, I was thinking it was a transition year. I would say that what has happened in North America, coupled with as I’m sure you’ve noticed some fairly dramatic declines in oil production in a number of places around the world, leaves me to believe that absent this global recession it’s more and more a year in which growth is going to strengthen significantly in the second half. Michael LaMotte - J.P. Morgan: We’ve been -- I guess all eyes have been on Russia and Mexico here in the first quarter, second quarter timeframe. Anywhere else? I understand seismic activity in India is very robust right now. Anything in the Eastern Hemisphere that we should be keeping an eye on? Andrew F. Gould: Well, India, we just tell our board of directors here because firstly, it’s our 75th anniversary in India but secondly because as you say, there is a dramatic increase in the willingness of India to find out whether it has any chance of domestic energy security and therefore huge investment in seismic and hopefully following that exploration, drilling. And as you know, they have one or two very large development programs that are underway. So I think that perhaps for us, the really interesting thing in Indian seismic is the fact that we have a -- our second largest processing worldwide is in India and we work very closely with the Indian industry on how to interpret Q to the maximum advantage. But it’s symptomatic of perhaps the willingness of developing countries to find out what chance they have in energy security. Michael LaMotte - J.P. Morgan: Should we think about India as seismic for ’08/09 and the exploration and drilling in 2010 perhaps? Andrew F. Gould: Well, I think -- I don’t know their rig -- I don’t think their rig program is fixed yet but certainly I think that as soon as they can get rigs, they will start exploration drilling. Michael LaMotte - J.P. Morgan: Okay, great. Thank you, Andrew.

Our next question will come from Bill Herbert with Simmons & Co. Please go ahead. Bill Herbert - Simmons & Co. : With regard to seismic, I am trying to reconcile on the one hand the very favorable demand outlook that not only hearing from you but from others, with the fact that backlog has evolved rather slowly. Over the past three to six months, we’re down 20% quarter on quarter. Walk us through with respect to the intermediate outlook with respect to contracting your vessels and what we should expect with regard to backlog build as the year unfolds. Andrew F. Gould: I think that some of the significant drop in the backlog is due to the fact that we have some very long-term commitments that have not yet been renewed but I would say are currently in the state of being bid. So I would suspect that, just as I said to Michael now, that to look for a significant increase in the backlog, you are probably looking into the second half year. Bill Herbert - Simmons & Co. : Okay, got it. Andrew F. Gould: But there is no lack of bids out there. There is no lack of tendering, believe me. Bill Herbert - Simmons & Co. : That’s what I figured. Secondly, I was struck by the fact that there was no mention of what’s going on with respect to Saudi Arabia and your rumored new contract there. Andrew F. Gould: Well, it’s not a rumor. I mean, -- but what strikes you, Bill? Bill Herbert - Simmons & Co. : Well, there was no mention of it, no detail, no information provided on it. Andrew F. Gould: Well, you probably realize we don’t make announcements of any individual contract wins that we have. Bill Herbert - Simmons & Co. : Well just more plainly, could you enlighten us as to the parameters of that engagement? Andrew F. Gould: All right, so [Manipur] is -- have we started to mobilize equipment? Yes. Is it eventually big? Yes. When will it start producing incremental revenue? A little bit in Q2 and the rest of the year but really ramping up in ’09, not ’08. That’s about what I would tell you, Bill. Bill Herbert - Simmons & Co. : That’s all I have. Thank you very much.

Our next question will come from Dan Pickering with Tudor Pickering Holt. Please go ahead. Dan Pickering - Tudor Pickering Holt: Andrew, for the last couple of quarters you’ve talked about expectations around the revenue growth in your business. We did not hear that commentary at least this quarter as it relates to kind of where Wall Street is at. Can we assume that silence means that expectations are now in generally the right spot? Andrew F. Gould: I am very comfortable with Wall Street’s assumptions on the full year 2008, Dan. Dan Pickering - Tudor Pickering Holt: Fantastic. Second question, back to the seismic business, last year end of the year we sort of saw a fair -- Marine take a fairly significant down-tick with some dry dockings and utilization. It didn’t feel like it bounced up much here in the Q1, Andrew, and now we are looking for some more dry docks in Q2. I guess where I’m going with this is, is there a change in the profitability of the Marine business or is this just a fairly lengthy period of getting all the assets in the right place? Andrew F. Gould: Actually, I would say two things, Dan. Firstly there is a considerable pricing difference between winter season and summer season and they -- there is more and more a shift that takes place every winter and summer, so the actual number of transits that we do is increasing. I don’t think that we feel that that is going to affect the overall profitability of Marine if you take it on an annual basis. But I’ve been trying to convey the message that seismic is going to be lumpy and it’s lumpy in both marine and multi-client. Dan Pickering - Tudor Pickering Holt: Okay. Thank you.

Our next question will come from Charles Minervino with Goldman Sachs. Please go ahead. Charles Minervino - Goldman Sachs: Good morning. I just wanted to touch on Russia a little bit. I saw that oil production was down in 1Q and several companies here are obviously moving aggressively in Russia in the services market. Could you just talk a little bit about how you are positioned there right now and really how you are going to grow? Will it be predominantly organic growth or will it be -- will you be looking at M&A in Russia? Andrew F. Gould: Well, I think our feeling is that M&A -- Russia is now over-priced. We’ve made our big moves and therefore I suspect that going forward, it’s going to be organic and a lot of it will be IPM. So I don’t -- we will do some M&A but nothing like the scale of what we did in the past four or five years. And if you look at our business, then the well services market, the fracking market is over-supplied. The big growth element these days are services around drilling. Charles Minervino - Goldman Sachs: Okay and just another question with regard to the offshore business. Can you talk a little bit about how your margins are in the offshore business? And then as we go forward here with the new build rigs coming, what that can mean for margins I guess one, two, maybe three years down the road? Andrew F. Gould: Well, I think our offshore margins are fine. I really -- there’s no significant shift in our offshore margins and going forward, the quality of our revenue will improve and the extent to which our quality of revenue improves really depends on the number of new rigs that are on exploration and then the exploration success that they have. We have huge margin variation between a successful exploration well and an unsuccessful exploration well. Charles Minervino - Goldman Sachs: That’s really helpful. Thank you.

We’ll go to David Anderson with UBS. Please go ahead. David Anderson - UBS: Thank you. You mentioned just a few minutes ago the growth was going to significantly increase in the second half of the year. I was wondering if you could expand on that a little bit further. Was that just primarily centered around North America or were there some other regions? Because it seems to me that the offshore, the impact of the offshore new builds is more of a 2009 event, so I was just wondering if you can expand on that a bit. Andrew F. Gould: Firstly, you are quite right to point out that the most significant change, compared to what I said in December because the remarks I made a few minutes ago were a function of what I said in the December call. The biggest shift is North America and that’s true for revenue as well. And overseas, I think that firstly we are -- I am personally still astonished at the demand for IPM and I think that the, if you like, perhaps I had underestimated the extent to which land drilling might expand, but I would caution you that this is very much a second half event. David Anderson - UBS: Okay, and then just to touch back on Russia, we did notice there were some changes in the upstream tax regime and it doesn’t look like it’s had too much of an impact. Are you feeling a bit more optimistic that some more material changes could be coming about and is that kind of the next leg as to what’s going to spur IPM work? And is this a 2009 event for you? Andrew F. Gould: I think the Russian Government will do what is necessary to release the money that is required to increase, to sustain or to increase production in function of their 2% a year objective and I agree with you that what they have announced so far is not sufficient. But I am pretty sure that they will get it right in the end. So it could -- you are quite right that largely it will be a 2009 event. David Anderson - UBS: Okay, and then just one last question on Mexico -- some of that proposed energy bill, there was some more performance based service contracts were mentioned in that, in the bill. I was just wondering, how does that impact your view on that market? And does, once again going back to IPM I guess, does that imply there is more IPM work on the horizon or is this really not going to go through? Andrew F. Gould: Not so much that I think it will change their IPM programs but what it will allow us to do, which is going to be a very nice change, is it will allow us to be incentivized on the basis of the performance of technology, which is something very difficult to achieve under the current contractual regime. David Anderson - UBS: So you feel pretty optimistic that goes through? Andrew F. Gould: I think it’s a -- well, I don’t know. I’m not speculating on the politics but if it does go through, it’s probably a positive for everybody. David Anderson - UBS: Thank you.

We’ll go to Geoff Kieburtz with Citigroup. Please go ahead. Geoff B. Kieburtz - Citigroup: The more positive outlook for North America in the prepared comments, there were several references to the continued weakening trend of North American stimulation prices. How do you see that playing out? Is your outlook for the North American market sufficiently more positive that you think that will turn around? Andrew F. Gould: I think that we’ve seen the bottom, or we are seeing the bottom right now. Now obviously contractually, most of what we are going to do in 2008 is tied up. There is obviously some capacity that is not tied up and depending on the size of the rig count increase, there might be a little bit of pricing levers towards the end of the year. But that’s not clear yet. What I can say fairly definitively is we see in stimulation services, pricing is bottoming. Geoff B. Kieburtz - Citigroup: Do you see pricing leverage in any other product lines in the -- Andrew F. Gould: I think that drilling and measurements, anything to do with directional drilling in the North American, as in most other markets, still has some pricing leverage. Geoff B. Kieburtz - Citigroup: And shifting to Latin America, could you maybe give us a little bit more historical context? I mean, we heard in the fourth quarter, we’re hearing again in the first quarter about start-up costs on IPM projects principally in Mexico. That’s been a very big business for you for some time. What’s going on? Are the projects shifting to different locations or what kind of is going on? Andrew F. Gould: So the answer is both. In other words, the projects are shifting to different locations so the two large projects we’ve been mobilizing in the last six months are both in the Villahermosa Basin, which is deep and hot and at the same time, we’ve been mobilizing again rigs to Chicontepec and we will in the second quarter be mobilizing Burgos 7. So Burgos 7 and Chicontepec, if you like, is the traditional IPM activity in Mexico. The stuff in the south is the new IPM activity in Mexico. Geoff B. Kieburtz - Citigroup: Both volume and mix then, basically. Andrew F. Gould: Yes, both volume and mix but the whole -- the whole number of contracts, our IPM tenders has changed scale in the last year. Geoff B. Kieburtz - Citigroup: And your comment about IPM more broadly, because you’ve mentioned it in the context of other regions as well, should we hear or interpret those comments to mean that we are going to see more of this, where project start-up, margin effects become more common? Andrew F. Gould: Well, I don’t think we’ll have many projects that start on the scale of what we are starting in Mexico, so to that extent, no. There will I think be a project start-up effect in every quarter but probably at a decreasing level, at least for the balance of this year, a decreasing level per quarter, Geoff. Geoff B. Kieburtz - Citigroup: Okay. Thank you, Andrew.

We’ll go to James Crandell with Lehman Brothers. Please go ahead. James Crandell - Lehman Brothers: Good morning. To follow-up on that question, Andrew, on the IPM business, do you see the IPM business getting more price competitive today and if it is going to spread, will more and more NOCs be looking for increased price concessions and IPM work in the future, if that’s competitively bid? Andrew F. Gould: Well, firstly we don’t -- I don’t -- I know what you’ve been hearing, Jim. We don’t see IPM as being any more price competitive today than it was two or three years ago. What is true is that every time we go to a new basin, there is a learning curve and going up that learning curve takes a little time but once you are up it, you actually have a huge competitive advantage and we just celebrated drilling our 1,000th well in the Burgos field. When you’ve drilled a thousand wells, you probably have a pretty good knowledge of how to do it and actually the levels of return we make out of those projects have improved over time, whatever’s happened to the pricing. James Crandell - Lehman Brothers: Okay, and I have a question also about E&P spending, Andrew. Our work suggests that we’ve added upwards of $10 billion now to the E&P spend since our survey was published in December and maybe 40% of that is in North America. Do you think as you look at the U.S. today that we could be looking at additions of somewhere in the range of 200 to 250 rigs over the course of this year? And internationally, I guess would you think that the recovery is stronger that what you thought previously, given budget announcements and the higher oil prices and that you could with some confidence now look at least a 20% revenue growth in your international oil services business in ’08? Andrew F. Gould: I feel quite confident that the international spending is going to increase and we weren’t that far from the number you mentioned, so it’s not in any way impossible. I think in terms of North America, I don’t really have a good enough read to know whether it’s 100 or 200 rigs yet. I don’t know. I think it will depend a little bit on the economy and a little bit on the capacity of the industry to follow, but it’s not impossible. I just don’t -- James Crandell - Lehman Brothers: Okay, and -- Andrew F. Gould: -- you said 200 and 250, I don’t feel confident yet of that level. James Crandell - Lehman Brothers: Okay, but you will pretty soon -- Andrew F. Gould: That was just U.S. That was just U.S., Jim, right? James Crandell - Lehman Brothers: Just U.S., Andrew, right. And one other quick question; Andrew, how many in total seismic vessels between Eastern Echo and what you are building, you were intending to build any way, do you have on -- either on order or in the plan? And can you give me a rough idea on the timing of delivery of those? Andrew F. Gould: We have eight vessels on order. We will get one more this year which is not an Eastern Echo one, it’s a Blue Arrow, which will come in the third quarter. We will start taking delivery of Eastern Echo in Q1 next year and substantially most of Eastern Echo should be in the course of ’09. James Crandell - Lehman Brothers: Okay. Thank you very much.

Our next question is from Brad Handler with Wachovia. Please go ahead. Brad Handler - Wachovia: Thanks. Could you please speak some more to the buying behavior related to wide and rich azimuth multi-client? I guess I’m just a little confused about whether or not there is some sacrifice of sales that gets made if you sell things after a specific oil company has the lease sale as opposed to before where you might have had more bidders. Andrew F. Gould: I think that your point is a valid point but actually what it does is to add an additional risk, which is that you shot your seismic in the right place for that particular client to buy it as he’s buying it, when he knows what lease he has. Whereas before, he was buying much cheaper seismic but on the basis that he would be -- he might be bidding any number of blocks. So it does add an additional risk but I am not uncomfortable with the coverage that we have in view of the last lease sale. I think there are three things in the multi-client for 2008. The first is there was some buying in Q4 in anticipation of the lease sale. The second is the lease sale was extremely late in the quarter and has all the implications of wide-azimuth data. And the third is that we have three phases of E-Octopus to deliver during the second half of the year, which will add a considerable volume of new product to our library. Brad Handler - Wachovia: Okay. If I could stay with this just for a couple of other follow-ups, I just want to make sure I get it; so assuming the risk variable, and I appreciate you telling us about that, assuming that that works itself out favorably, do you have any reason to think that your wide azimuth prospects have lessened relative to what you may have thought about a year or two ago when you first sort of ventured into the Gulf of Mexico region? Andrew F. Gould: Wide-azimuth, no, I don’t. Brad Handler - Wachovia: Okay, so the pricing dynamic is -- Andrew F. Gould: There may be timing differences but I don’t think it’s lessened overall volume prospects. Brad Handler - Wachovia: Okay, that’s helpful. Is it fair for us to think about 2Q as having a pretty healthy snap back in multi-client based on the fact that we’ve gotten through this lease sale? Andrew F. Gould: I would think more in terms of the second half year. Brad Handler - Wachovia: Okay. Andrew F. Gould: Because as I said, we have new product to deliver and I don’t think we’ll deliver a lot of it in Q2 and there is another lease sale coming up in October. Brad Handler - Wachovia: Okay. And then is pre-funding levels changing at all as it relates to wide-azimuth? Andrew F. Gould: They are not as healthy as they were I think perhaps two or three years ago when we were pre-funding normal reprocessing projects and normal 3D, but they are still pretty healthy. Brad Handler - Wachovia: Again, I guess getting back to that risk point you made. Okay, one sort of side -- I’m not sure if it’s important at all but there was a press release by electromagnetic geoservices about a patent case in The Netherlands. Again, forgive me if this is completely trivial but is that at all relevant to your business? Does it at all hamper any of your efforts for the -- Andrew F. Gould: No, I mean, to be -- the press release I felt was somewhat disingenuous. The Dutch Court did not rule; it deferred the decision to the European Patent Office, so no patents were validated or invalidated.

And our next question will come from Ken Sill with Credit Suisse. Please go ahead. Ken Sill - Credit Suisse: Thank you. Andrew, I wanted to ask a question, something that’s kind of popped up in the comments as an area of weakness was Schlumberger Information Systems. It was weak in North America and a lot of other regions. I wondered if you could give us a little bit of insight into is this another business that is going to be seasonal or was this just a year-on-year rollover? Andrew F. Gould: It’s traditionally -- SIS information systems is a bit like seismic in as much as customers use up their budgets at year-end to purchase software and in a year when our growth rate is a bit slower than it was in the past two years, that shows up in Q1 as opposed to Q4. So we had very, very high sales in Q4 and lower sales in Q1 but it’s not new. It’s just showing up more. Ken Sill - Credit Suisse: Yeah, I knew it had been there and my next question was kind of is this something that -- are the margins in information systems solution very different from what you are getting in your kind of core oil field service businesses? Andrew F. Gould: They are very good. Ken Sill - Credit Suisse: They are very -- so this would be a high margin business -- Andrew F. Gould: This is a software business, yes. This is a software business. Ken Sill - Credit Suisse: Yeah, so and then in terms of the seasonal recovery, kind of expect something gradual and building to a year-end crescendo again? Andrew F. Gould: Yes. Ken Sill - Credit Suisse: So just -- and then to kind of close the gap here, so you are very happy with where Wall Street is for the year. Obviously we have the pattern wrong, pretty clear. What is your outlook now for 2009? I know it’s awful early but you are going to have the deep water rigs on, North America will be growing fairly substantially. I mean, does tightening up North America help pricing power globally in the outlook for ’09? Andrew F. Gould: I think it would need quite a lot of tightening to -- basically you are talking about pressure pumping. Segments where Schlumberger participates, you are talking about pressure pumping and I think that it would take quite a lot of tightening to really affect overseas markets. And I was warned by Malcolm that somebody would ask me about ’09, so my gut feeling and it’s no more than a gut feeling, is that ’09 will be better than ’08 in terms of growth, overall growth. Ken Sill - Credit Suisse: In overall growth? Andrew F. Gould: I know that doesn’t help you very much but really, it is awfully early. Ken Sill - Credit Suisse: Well, and you don’t want to get too excited about things but I just wanted to get your feel for that early in the year. Okay, thank you, Andrew.

We’ll go to Kevin Simpson with Miller Tabak. Please go ahead. Kevin Simpson - Miller Tabak & Co.: Thanks. Andrew, I wonder about profit margins; they came in a little bit below my expectations for oil field in a couple of markets, Latin America obviously I guess is a function of to some degree of Mexico and other issues. And then the Europe/CIS. Do you expect the -- I’m wondering if margins have peaked for the cycle or are these kind of short-term factors and there is still margin upside, particularly in the Eastern Hemisphere markets where you are so strong? Andrew F. Gould: I don’t think you can make a judgment on the basis of Q1, so Latin America is very definitely a function of Mexico but also the project disruption that I pointed out in Peru, Colombia, and Ecuador, and a little bit in the south where we had an activity stoppage. And in Europe/Africa/CIS, I would say that there is no reason to suppose that has gone down permanently. It’s largely seasonal plus the inclusion of FRAMO as a consolidated item for the first time. Before it was an equity pick-up. And FRAMO’s margins, while very healthy, are not at the same level as OFS. Kevin Simpson - Miller Tabak & Co.: Okay, so there’s a little bit of an apples-to-oranges comp there? Andrew F. Gould: Yes. Kevin Simpson - Miller Tabak & Co.: Okay, and then you talked about the tight global supplies and one of the issues that I have is that governments around the world seem to be with collective greed conspiring to slow things down. Is that a significant concern of yours, I mean, Russia being one place that’s pretty obvious but other places as well -- for instance, Venezuela. Andrew F. Gould: Alaska. Kevin Simpson - Miller Tabak & Co.: The U.S., I suppose. Andrew F. Gould: You are quite correct. It is a concern, Kevin. Our governments think they can tax $100 oil with impunity and that’s not the case. And it’s not so much the amount of the tax; it’s the fact that it produces a degree of uncertainty into our customers’ investment decisions and therefore they have to presume a certain degree of risk, which makes them shy. So you are quite right to point out it is a concern. Kevin Simpson - Miller Tabak & Co.: But to some degree in a way, it’s baked into your thinking that high comfort level, that an ’09 growth is going to be -- we’ll say comfortably in excess of -- Andrew F. Gould: ’09 growth is more dependent on offshore, which as you know is very long-term and therefore, governments tend to behave more rationally, if you like. Kevin Simpson - Miller Tabak & Co.: Yeah, well, they have less leverage there. All right, thank you. That’s it for me.

We’ll go to Benjamin Dell at Bernstein. Please go ahead. Benjamin Dell - Sanford C. Bernstein: I know you’ve had a lot of questions around the seismic business but maybe I could just ask one on 2009. We obviously have a big stream of capacity expansion which actually accelerates into 2009. How do you see that impacting margins in this business? Andrew F. Gould: If there is an erosion in Marine margins, it’s going to be towards the end of 2009. It’s not going to be at the beginning. And in fact, capacity is so solidly absorbed for 2008 that any erosion in 2009 is going to be minor. I would worry more about 2010 if I were you. Because 2009 there is a clear demand today and you can match that demand to the capacity that’s coming on. Benjamin Dell - Sanford C. Bernstein: And when you look at the application of multi-azimuth seismic outside the Gulf of Mexico, obviously the Gulf’s got pretty unique geology in terms of its salt [inaudible]. Which other basins do you see that being applied to? Because it appears that only really Angola has the potential for sub-salt [layers]. Andrew F. Gould: West Africa. I mean, Nigeria, some of the deep water in Nigeria. Some in Brazil. There’s certainly applications in India, where I am now but it’s actually more basalt than salt, which is a slightly different problem. There are applications in the northern parts of the North Sea; again it’s largely -- it’s basalt rather than salt, but you are quite right to point out that the two large markets are the Gulf of Mexico and West Africa, but I wouldn’t rule out Nigeria. I wouldn’t say just Angola. Benjamin Dell - Sanford C. Bernstein: Okay and just lastly, you mentioned your seismic vessel additions. Did you cancel the options on the fifth and sixth Eastern Echo boats or not? Andrew F. Gould: No, we didn’t. Benjamin Dell - Sanford C. Bernstein: Okay, great. Thank you.

We’ll go to Pierre Turner with [inaudible]. Please go ahead. Pierre Turner : That was close but good morning, gentlemen. Most of the questions have been answered, maybe a little bit more on Marine and the pre-funding. Andrew, would you care to speculate a little bit -- you did mention that it was I think down sequentially from where it had been, but could you tell us where you might expect pre-funding to end up on some of your large multi-client Gulf of Mexico? Andrew F. Gould: Actually, probably I should have been more explicit, yeah. One of the things that is happening is we were pre-funding reprocessing projects where the actual investment on our part was much smaller than in multi-client acquisition, and therefore we had very, very high pre-funding ratios and they were very often way over 100%. So our pre-funding ratios in function of the acquisition programs have dropped below 100%, but I would still describe them as healthy and we tend not to commit unless we feel we have an adequate pre-funding ratio. Pierre Turner : So on an -- I think that is helpful color because your point is that on an absolute basis, and is that what your commentary is about the library sales, that basically the budgets are such people are spending it on the pre-funding of enhanced azimuth information. Andrew F. Gould: But you know, there is still an after-sales market beyond the pre-funding in wide azimuth. It’s just that -- that’s why I mentioned this additional risk factor that your wide azimuth is in the right place. Pierre Turner : Okay. The other one with just a little bit more color again had to do with IPM start-ups, and I appreciate that you have addressed a number of issues related to that, but to the extent we could get a feel for how much are we through the start-up costs and maybe some -- how many rigs we have on IPM and where do you expect that to be at the end of ’08? Is it in terms of increases and -- Andrew F. Gould: Well I mean, in the last year we started about 35 rigs. We are going to start another six but they are the Burgos ones in Q2 and Burgos ones, I really don’t think there will be a huge start-up issue in that, so that leaves another 10 around the world for the balance of the year. So I think it’s safe to assume that the start-up cost element in the quarterly results will decrease from now going forward. Pierre Turner : Okay. That’s the color I was looking for. The rest has been answered. Thank you, gentlemen.

We’ll go to Kurt Hallead with RBC Capital Markets. Please go ahead. Kurt Hallead - RBC Capital Markets: Just going to hit you out right with this one -- so when do you think the peak is, Andrew, 2013 or 2015? Andrew F. Gould: Well, you know, you are going to have to make so many assumptions on the economy and all the rest of it that that’s a very, very difficult one to call. Kurt Hallead - RBC Capital Markets: Let’s just say predicated on the decline rates you see in Mexico and Canterell and some issues in Russia -- Andrew F. Gould: I don’t think this cycle is going to peak without a drop in demand, and a drop in demand can come two ways; it can come violently through a global economic recession or it can come gradually, which is through the gradual substitution of hydrocarbons with other sources of energy. And if that’s the case, you know, it’s a long -- any transition to meaningful volumes of another source of energy is a decade or longer. So take your pick which way it is going to happen. Kurt Hallead - RBC Capital Markets: In that period from 1970 to 1980, according to stats I pulled together, E&P spending grew like 25% a year on average over that decade. Do you think there’s a possibility that the next five years or so could replicate that 25% a year on E&P spend? Andrew F. Gould: Well you see, I think this cycle is very different from 1970 to 1980, and it’s different in two senses. One is that in 1970 to 1980, I think that there was some physical shortage but really it was a political shortage. The other thing is that the developments that took place in the 1970s, which were basically added six or seven million barrels or even more a day were Alaska, Mexico, and the North Sea, and those discoveries were made in the 1960s. So there was no exploration to be done. So this time I think it is much more difficult, if you like, to see where the development is going to come that is going to produce significant volumes except for the Middle East, Central Asia, and Russia. Kurt Hallead - RBC Capital Markets: And how do we -- how do you think we should consider your growth rate opportunity in Brazil, you know, follow-on with the Tupi and now some of this chatter around the Carioca field. Where is your opportunity set down there? Maybe you could discuss it by product line importance. And then how should we think about the growth rates in Brazil in general? Andrew F. Gould: Well, I think that I would characterize 2008 as good and 2009 as excellent basically because the large addition of [Floaters] is going to be in 2009, not 2008. And contractually we are very -- we are mostly very pleased with what we have. Kurt Hallead - RBC Capital Markets: That’s for Brazil, right? Andrew F. Gould: Yes, Brazil. Kurt Hallead - RBC Capital Markets: And how about in terms of product line importance for you in Brazil? How would you rank it? Andrew F. Gould: Well, it’s very important for wireline. It’s extremely important for testing. It’s important for D&M but not as important as it should be, and well services and the others have a presence but -- we have a very satisfactory position. Kurt Hallead - RBC Capital Markets: And if I may just close out here, is there any -- is the opportunity set on land in Brazil, are there any good possibilities there or is it mostly just going to be the offshore as we’ve heard? Andrew F. Gould: There is some opportunity on land but it is not going to be anything on the same scale as offshore.

And our final question today comes from Robin Shoemaker with Bear Stearns. Please go ahead. Robin Shoemaker - Bear Stearns: In your Q&A, you have the statement that you’re 33% third-party content in IPM and that that will be increasing to mid-40s. Is this increasing content of third-party services in any way related to the delays you are experiencing? And what should we think about in terms of overall integrated project margins as third-party content increases from 33% to the mid-40s. Andrew F. Gould: I don’t think it’s a question of delay; it’s more a question of different work scopes. Simon, would you like to comment on the margin evolution?

You are raising a very valid question here about the third-party element of our services provided under the IPM contracts. These don’t attract the same type of margin regionally on our services. Our services are at least the same type of margin we generate or even better. Now, the third party, we do cover our costs associated with them but they are lower margin. Now, what you’ve seen, the 33% versus the 40% through the year, I don’t think it’s going to affect the overall margins of the projects because the efficiency on the rest of the activity would be more than compensating the small deterioration that a 7% decrease will cause. Robin Shoemaker - Bear Stearns: Okay. And then the only other question I had was Andrew, you commented on a little bit on the acquisitions market, M&A market in Russia as somewhat over-priced. Can you comment overall on Schlumberger's acquisition strategy? We see recently a lot of M&A activity and also private equity getting involved in purchasing oilfield service assets in companies. Can we read into this expanded share buy-back program that there is perhaps a little less attractive acquisition opportunities for Schlumberger? Andrew F. Gould: No. In the calculation of the amount of cash available for buy-back, we have assumed the same level of acquisitions as we’ve generally been practicing over the last three or four years. Now, I don’t think you will see us as I’ve said on many occasions make a major acquisition, particularly at these valuations. However, increasingly we will make niche acquisitions largely for parts of our service line that we don’t have or for technology opportunities that we identify. But it doesn’t -- the program in itself does not signal and reduction in our acquisition strategy. Robin Shoemaker - Bear Stearns: Okay. Thank you.

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

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