College of Business

BUSI 4351: INTERNSHIP

Fall 2012-2013

Final Report – Oil and Gas Sector

Internship Advisor: Dr. Osama Al-Kwifi

By: Bassem Al Khalaf

ID: 200700486

Section: 101

12/12/12

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Executive Summary

An internship is a program that PMU’s students have to take it before graduation. This

program is like a training of the transition period of four months where the student will

practice and apply whatever he learned at the Prince Mohammed University. Moreover,

the internship gives students a brief picture of the real business environment and, also,

shows them the important of concepts and principles they learned and their applications

in the business field.

As a PMU student with a dream to be a CFO in a MNC I have choosing a finance major

which it will help me to attain my career goal. Studying at PMU since 2007 till date and

hopefully I will graduate mid of 2013 and start new challenges in business field in the

leader company in Oil and Gas industries.

This report will explain in brief the four months of my internship program at

Schlumberger (SLB) in finance department. This report will cover introduction,

company background, company vision and mission, company values, SWOT analysis,

organizational marketing and competitive strategies, job history, conceptual framework,

key financial performance indicators, technical part, evaluation of the internship

experience, summary of findings and recommendations, and finally my conclusion.

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Acknowledgement

I would like to thank those people who encouraged and supported me to continue my

bachelor degree. Special thanks to my closed friends and PMU instructors (I remember

Dr. Zafar, who told me to continue studying Master degree after PMU) as they are the

ones who keep encouraging me to continue my study, even though my family was

disagreeing with studying idea. Thanks to Allah (God), I choose the right decision, and I

gain knowledge and techniques that secure my career life and wide my brain to look

into the life in different way.

In addition, most of PMU instructors guide and drive students to be professional and

critical thinkers, but each instructor has his own way to pass the idea to us, which I

really appreciate the tremendous supports I got from them.

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Table of Content

Title Page

Introduction 4

Company Background 5

Vision 8

Mission 9

The Company Values 9

SOWT Analysis 10

Organizational Marketing Strategy 11

Organizational Competitive Strategy 11

Job History 12

Conceptual framework 13

Key Financial Performance Indicators 14

Technical Part 17

Evaluation of the internship experience 18

Summary of findings and recommendations 18

Conclusion 19

References 20

Appendices 21

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Introduction

Among hundreds of universities in the Arab world, being a PMU student and having

PMU signature on my degree make me feel different test of my study, and really proud

of it. PMU provide excellent instructors from over the word to transfer knowledge and

experience of Western education into Arab world. Furthermore, the curriculum of PMU

was made by a group of twenty universities of USA. In addition, PMU keep improving

day by day to attain a goal to provide high educated students with international

standards to qualify anywhere.

As a PMU student who is going to graduate next semester, I have to take my internship

course of four months to be ready for business field life and at the same time, to provide

my advisor of PMU with my feedback, either in positive or negative way to enable him to

guide me and help me in a professional way that will help all parties. PMU main

objective of the internship program is to make me (student) familiar with a business life

and to expose a new practical knowledge.

This report will explain in brief the four months of my internship program at

Schlumberger (SLB) in finance department with role of Receivable Manager. This

report will cover the company background, company vision and mission, company

values, SWOT analysis, organizational marketing and competitive strategies, job

history, conceptual framework, key financial performance indicators, technical part,

evaluation of the internship experience, summary of findings and recommendations,

and finally my conclusion.

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Company BackgroundSchlumberger Limited (NYSE:SLB) is the world's leading oilfield services company

supplying technology, information solutions and integrated project management that

optimize reservoir performance for customers working in the oil and gas industry.

Founded in 1926, today the company employs more than 115,000 people of over 140

nationalities working in approximately 85 countries.

The company comprises two business segments:

Schlumberger Oilfield Services supplies a wide range of products and services from

formation evaluation through directional drilling, well cementing and stimulation, well

completions and productivity to consulting, software, information management and IT

infrastructure services that support core industry operational processes.

WesternGeco is the world's largest seismic company and provides advanced acquisition

and data processing services.

Schlumberger has principal offices in Houston, Paris and The Hague. Revenue was

$39.54 billion in 2011. Schlumberger stock is listed on the New York Stock Exchange,

ticker symbol SLB, on the Euronext Paris, Euronext Amsterdam, London and the SIX

Swiss stock exchanges.

Research and DevelopmentThe company was founded by the two Schlumberger brothers who invented wireline

logging as a technique for obtaining downhole data in oil and gas wells. Today, it

continues to build on the industry's longest track record of providing leading edge E&P

technology to develop new advancements-from reservoir to surface. Schlumberger has

always invested significant time and money on research and engineering as a long-term

strategy to support and grow its technology leadership. Short-term business cycles do

not affect this. In 2011, we invested $1.1 billion in R&D for our oilfield activities.

Schlumberger invests more each year in R&D than all other oilfield services companies

combined.

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Schlumberger Products, Services and Solutions Schlumberger services and solutions combine domain expertise, best practices, safe

and environmentally sound well site operations, innovative technologies, and high-

quality support aimed at helping its customers increase oilfield efficiency, lower finding

and producing costs, improve productivity, maximize reserve recovery, and increase

asset value in a safe, environmentally sound manner.

Today, Schlumberger Oilfield Services solutions include open-hole and cased-hole

wireline logging; drilling services; well services, such as cementing, coiled tubing,

stimulations and sand control; well completion services including well testing and

artificial lift; interpretation and consulting services; and integrated project management.

Strong technical and operational support to the field is vital to the success of any

complex global operation that includes remote locations. The key is to provide real-time

linkage with world-class experts and knowledge, delivering the latest and best problem-

solving capabilities-anywhere, anytime. The company's InTouchsupport.com knowledge

management tool improves field access to Schlumberger technology centers through

the most advanced IT tools, 24-hours a day, seven days a week.

Enhancing core E&P operations to improve production, increase reserves and drill

better wells requires the integration of innovative information technology. Schlumberger

Information Solutions (SIS) offers a unique combination of people and processes,

technology and infrastructure, and real-time IT enablers-delivering key value-adding

solutions to overcome a myriad of challenges confronting industry operational

processes. SIS offers information management, software technology and infrastructure

services. Combined with the domain experience available through the Business

Consulting group, these enable oil and gas companies to enhance their workflows and

achieve their goals.

As the industry's focus is moving towards maximizing post-plateau production and

ultimate recovery, oil companies have to face more and more resource intensive

projects. Integrated Project Management (IPM) is the Schlumberger response to this

challenge and a significant growth area for Schlumberger. IPM activity is characterized

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by long-term relationships between the customer and Schlumberger. It offers a

combination of engineering, process management and understanding of Schlumberger

segment technologies. As well as providing technology and expertise, Schlumberger

often works with local subcontractors to harness local knowledge and experience.

Schlumberger has achieved a number of successes in IPM in particular in Mexico. The

Burgos project for example, now in its seventh year, has delivered 237 completed wells,

which include the drilling of 2.3 million ft of hole. The benefits to the customer have

included accelerated production, reduced capital expenditure and increased efficiency.

WesternGeco WesternGeco provides comprehensive worldwide reservoir imaging, monitoring, and

development services, with the most extensive seismic crews and data processing

centers in the industry, as well as the world's largest multiclient seismic library. Services

range from 3D and time-lapse (4D) seismic surveys to multicomponent surveys for

delineating prospects and reservoir management.

Positioned to meet the full range of customer needs in land, marine, and shallow-water

transition-zone areas, WesternGeco draws on a superior record of market-driven

innovation and technology leadership.

Seismic solutions include proprietary Q-Technology* for enhanced reservoir description,

characterization, and monitoring throughout the life of the field-from exploration through

enhanced recovery. Q* single-sensor hardware and software are setting a new quality

and capability standard for seismic solutions.

The company's Omega* Seismic Processing System encompasses the industry's most

advanced and comprehensive suite of algorithms and runs on multiplatform technology,

ensuring timely turnaround for even the most complex processing projects.

Commitment to Quality, Health, Safety and the Environment Schlumberger operates in many varied and often challenging geographical

environments. An unwavering commitment has always been maintained to the highest

standards of the quality, health and safety of our employees, customers and

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contractors, as well as for the protection of the environment in the communities in which

we live and work. The long-term business success of Schlumberger depends on our

ability to ensure that QHSE remains a top priority for the management and each

employee. The Schlumberger QHSE policy and diverse standards are applied

throughout the company. Each employee must maintain up-to-date certifications in

essential QHSE training courses through both traditional classroom and on-line

interactive learning. Our driving safety-training program is one example of our QHSE

success. In 2003 it resulted in zero occupational auto fatalities despite employees

logging a monthly average of 12 million driving miles.

AFFILIATESWesternGeco: Comprehensive worldwide reservoir imaging, monitoring, and

development services, with extensive geophysical survey crews and data processing

centers.

M-I SWACO: Drilling fluid systems to improve drilling performance, technology to

maximize production, and environmental solutions to safely manage waste volumes.

Smith Bits: Advanced drill bits for all environments, and a wide range of drilling

services that include reaming, jarring, fishing, and sidetracking.

Geoservices: Evaluation of hydrocarbon reservoirs and optimization of field

exploration, development, and production.

NExT: offers oil and gas training courses in industry-leading applications from

Schlumberger, such as Petrel, Techlog, ECLIPSE, OFM, and other software.

Vision

Schlumberger’s vision is to deliver outstanding Service Quality (SQ) to customers from

every part of our organization—operationally through the Segments, proactively through

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the GeoMarkets, and through outstanding support from the Functions and Engineering,

Manufacturing, and Sustaining (EMS). This means every part of the organization is

working together toward a common goal—Operational Performance which results in

“getting it right the first time” to deliver outstanding customer value. Schlumberger

remains a world-class organization, which will position itself in the future as a strong

customer focused company that delivers value through superior performance and

excellence in execution.

MissionSchlumberger’s mission is to ensure that Schlumberger management and employees

remain committed to the Service and Product Quality we deliver to our customers.

Preventing Service Quality incidents is a fundamental part of delivering flawless service

delivery. Consistent flawless execution is what will set us apart in the industry.

The Company ValuesMaking the most of our unique assets, Schlumberger is committed to providing services

that enhance and optimize our customers' performance.

Three well-established company Values that focus on people, technology and profit

underpins our work.

Our people thrive on the challenge to excel in any environment and their

dedication to safety and customer service worldwide is our greatest strength.

Our commitment to technology and quality is the basis for our competitive

advantage.

Our determination to produce superior profits is the cornerstone for our future

independence of action and growth.

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SWOT Analysis

Strengths:

1. Strong market position.

2. Strong revenue growth and diversified geographic presence.

3. Technical excellence and innovation.

4. Market reputation and brand name.

5. Leading provider of Gas and oil services.

Opportunities:

1. Growth through acquisitions.

2. Agreements with Gazprom.

3. Other alliances and agreements.

4. Financial markets (raise money through debt, etc).

Weaknesses:

1. Decline in revenues of the WesternGeco Segment.

2. Poor supply chain.

3. Low market share.

Threats:

1. Environmental regulations.

2. Political risk.

3. Dependence on the levels of expenditures by the oil and gas industry.

4. Cheaper technology.

5. Economic slowdown.

6. Exchange rate fluctuations.

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Organizational Marketing Strategy

Schlumberger manages its business through 35 GeoMarket regions, which are grouped

into four geographic areas: North America, Latin America, Europe & Africa, Russia,

Middle East and Asia. The GeoMarket structure offers customers a single point of

contact at the local level for field operations and brings together geographically focused

teams to meet local needs and deliver customized solutions. Working together with the

company's technology segments, the GeoMarkets provide a powerful conduit through

which information and know-how flow to the customers, and through which

Schlumberger engineers and geoscientists maximize technological synergies over the

entire life of the field.

Organizational Competitive StrategySchlumberger offers its clients four key advantages:

Deep domain knowledge of exploration and production operations gained through 75

years of experience

The service industry's longest commitment to technology and innovation through a

network of 25 research, development, and technology centers

A global reach in more than 85 countries coupled to strong local experience and the

diversity in thought, background and knowledge that more than 140 nationalities bring

A commitment to excellence in service delivery anytime, anywhere.

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Job History

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Conceptual framework

PMU taught us about the important of effective communications, teamwork and

leadership, and critical thinking courses. Every week, I faced such type of problem with

my team, my management, and clients. For example, some employees (non PMU

students), thought communication is by sending an email! However, an effective

communication is to be sure the message delivers to another side and he knows what is

the requirement? I applied what I learned from m PMU and had a meeting with all AR

team and informed that that sending emails does not mine you did an effective

communication, unless, another side responds to you.

Another example was related to teamwork, where X employee worked individually and

he was staying in the office till 10PM without asking helps from his colleagues, and he

could not manage to deliver the task within the deadline. We sat together and discussed

that either all go at 5PM or all go at 10PM. In addition, the X employee should inform

other team once he has the task to avoid repeating same scenario.

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Key Financial Performance Indicators

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Key Financial Performance Indicators

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Key Financial Performance Indicators

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Technical Part

My role is a receivable manager for Arabian Market (ARM, Saudi and Bahrain). I am

involving in 1) recognizing revenue, 2) collecting money, 3) generating and reviewing

related reports, and 4) supervision of eighteen employees at a MNC (Schlumberger)

with yearly revenue around USD 1.4 billion within my area.

First, recognizing revenue where SLB has specified employees for this task called Back

Officer receivable accountants who receive field service tickets with their supporting

documents and they review them and do quality check on them, to be sure that any

revenue to be recognized meets four criteria of SLB revenue recognition policy which

are 1) proof of service delivery, 2) determined price/fixed price, 3) signed contract, and

4) collectability assurance. Moreover, my team recognizes revenue in two ways base on

the documents they receive. For example, when they receive complete documents

which meets client requirement for payment, AR team can invoice that field ticket and

then submit the invoice to client for payment. Another way, when AR team receive field

ticket, but somehow the supporting documents are not complete, which means we could

not invoice the client, but we can recognize revenue as accrual or, another word,

unbilled.

Second, collecting money where there is another specified employees for this task

called “front office receivable accountants (DSO officer), who follow up with clients to

sort out any issue and expedite the process to collect our payment as soon as possible.

Third, generating and reviewing AR related reports. There are two types of reports that

AR manager has to generate. Some reports AR manager uses LAWSON System to

generate and other reports generate from scratch by using MS Excel. Some reports

need to be generated and reviewed on daily, weekly, monthly, or quarterly basis. All

reports I have to generate are current month revenue, current month unbilled, collection

forecast and collection, deferred (provision) forecast, and Daily Internal Ratio (DIR).

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Furthermore, those reports help employees and management to track and monitor the

progress and sort out any issue from the beginning.

Fourth, supervising AR team which considers as the hardest part of AR manager role.

Dealing with eighteen people with different characteristic. In addition, it is so difficult to

change bad habits of the people or, also, make big decision like releasing low performer

employee, as I always try to give maximum chances to him, although, sometimes I felt I

am doing something unprofessional, but I can’t make one family life disaster because of

a person who I believe that who will change, but he needs long time.

Evaluation of the internship experienceOverall it was an excellent opportunity to apply what I studied at PMU in the real

business life. It is completely different than listening and doing homework or

assignments. In the school, I can recover and in worst scenario I can take the course

again, but in real business life, I do not have that many chances.

In the business life, there are many challenges in different ways, and the competition is

very high, especially at MNC, where the performance is the key for growing and

developing your career.

I exposed experiences such as generating reports, reconciling reports, consolidating

reports, people management, and solving problems. As a student you look to thing in

different way than as an employee.

Summary of findings and recommendationsDay by day, I become more confident that I made the right decision to continue my

bachelor study at PMU with finance majoring. Most of the materials and courses I have

been studied are real basis for the business life. Moreover, what instructors highlighted

for me in the class, are the most points helped me in the internship program.

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During my internship program, I did many tasks starting from generating reports to

attending meeting with financial geomarket controller and other operations controllers.

Furthermore, I learned that not only technical knowledge is only very important, but as

well, the relationship, or what they call it public relation, with employees and clients and

your works will be much easier with PR.

Conclusion

It was an excellent and great time to expose new things and new cultures. PMU

prepares us for entering business field with international standards. Moreover, with

strong preparation of new generation, I believe that PMU is going to attain it objectives

by graduating real leaders for not only Saudi Arabia, but for entire world, and all thanks

for those high qualified and professional instructors who contribute in attaining this

objective and who drive PMU students to success side.

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References

1870s-1910s: An early passion, Schlumberger. (n.d.). Home,

Schlumberger. Retrieved December 20, 2012, from

http://www.slb.com/about/history.aspx

Companies, Schlumberger. (n.d.). Home, Schlumberger. Retrieved

December 20, 2012, from http://www.slb.com/services/links.aspx

Resources, Schlumberger. (n.d.). Home, Schlumberger. Retrieved

December 20, 2012, from http://www.slb.com/resources.aspx

SLB Analyst Estimates | Schlumberger N.V. Common Stock Stock - Yahoo! Finance.

(n.d.). Yahoo! Finance - Business Finance, Stock Market, Quotes, News.

Retrieved December 20, 2012, from http://finance.yahoo.com/q/ae?

s=SLB+Analyst+Estimates

Schlumberger - Wikipedia, the free encyclopedia. (n.d.). Wikipedia, the free

encyclopedia. Retrieved December 20, 2012, from

http://en.wikipedia.org/wiki/Schlumberger

Schlumberger Ltd. (SLB) | Income Statement. (n.d.). Stock Analysis on Net. Retrieved

December 20, 2012, from

http://www.stock-analysis-on.net/NYSE/Company/Schlumberger-Ltd/Financial-

Statement/Income-Statement

Schlumberger Ltd. (SLB) | Revenues. (n.d.). Stock Analysis on Net. Retrieved

December 20, 2012, from

http://www.stock-analysis-on.net/NYSE/Company/Schlumberger-Ltd/Analysis/

Revenues#Accounting-Policy

APA formatting by BibMe.org.

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Appendices

1. Internship Learning Log Book 1.

2. Internship Learning Log Book 2.

3. Internship Learning Log Book 3.

4. Internship Learning Log Book 4.

5. Internship Learning Log Book 5.

6. Internship Learning Log Book 6.

7. Progress Report_S 101_ Internship_200700486.

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