EXCLUSIVE Schlumberger faces employee backlash in Russia over draft cooperation

Oct 14 (Reuters) – Some of the more than 9,000 Russian employees at oilfield services company Schlumberger (SLB.N) have begun receiving military draft notices through work, and the company does not authorize remote work to avoid mobilization, so with the matter familiar people and internal documents.

Schlumberger’s cooperation with authorities in providing the military enlistments and refusal to allow Russian personnel to work outside the country has sparked a backlash, according to the sources. They see the actions as Schlumberger’s tacit support for the war in Ukraine. Human rights groups are watching how the company is responding to the concerns.

Under Russian law, companies must assist in serving a subpoena on employees and complete military registration if at least one of their employees is on duty, according to the advocacy group Business & Human Rights Resource Centre, which tracks company performance on human rights issues.

In April, Schlumberger chief executive Olivier Le Peuch said the world’s leading energy services company was closely monitoring developments in Ukraine and was “hopeful for a quick end to hostilities” at this time. Schlumberger suspended new investments and technology deployments in Russia but, unlike some of its competitors and customers, chose to stay.

“The local leadership team is managing an incredibly complex and difficult situation,” a Schlumberger spokesman said in an emailed statement this week, adding that managers have a duty to “comply with local laws and regulations, particularly where failure to comply is additional.” Our local staff could create risks for them.”

Schlumberger is leaving decision-making about employment policy in Russia to local managers, the US-based spokesman said. International sanctions “do not allow US or EU citizens to provide Russia with advice or direction on employment practices,” the spokesman said.

ACTIVATION REQUEST

Russian President Vladimir Putin issued a decree last month to add new troops to his military amid heavy troop losses in Ukraine. The decree left the Ministry of Defense to set the number of conscriptions and prompted thousands of Russians to flee to avoid conscription.

The Business & Human Rights Resource Center asked Schlumberger and other non-Russian companies with offices in the country for information on their handling of the mobilization. Schlumberger did not respond as of Thursday, the group said, but two of them — drugmakers Roche Holding (ROG.S) and Novo Nordisk (NOVOb.CO) — said they had requested military deferment for their employees.

Roche, which employs over 800 people in Russia, said it had applied for exemption from military service for its employees. It declined to comment on an employee’s draft status.

Novo Nordisk also said it had applied for a deferment through a pharmaceutical trade association and had not drafted employees or received any orders from authorities.

A US State Department spokesman declined to comment directly on the military mobilization. However, the spokesman said companies should expect their operations “to become increasingly difficult as local conditions become less hospitable to Western companies”.

While Schlumberger declined to say how many people it employs in Russia, people familiar with the matter said its Russia business unit employs more than 9,000 people, which accounts for about 10% of the company’s global workforce.

According to an internal document seen by Reuters, dozens of its Russian workers have left the country.

Schlumberger said its “Russian management team is working tirelessly with clients and the government to evaluate all time-off options for their employees within the existing legal framework.”

The company disclosed previous contracts with Russian state-owned oil producers Rosneft (ROSN.MM) and Gazprom Neft (SIBN.MM) and Exxon Mobil Corp (XOM.N) for work in Russia. Exxon has written off its investment in Russia and is looking to exit.

Schlumberger’s competitors Baker Hughes (BKR.O) and Halliburton (HAL.N) are selling or have sold their oilfield service units in Russia.

Weatherford International (WFRD.O), which said in March the oil services company had suspended supplies to Russia and suspended new investment there, also has a presence in the country. A spokesman declined to comment on the handling of the military mobilization.

By Liz Hampton in Denver; Additional reporting by Timothy Gardner in Washington, Nikolaj Skardsgaard in Copenhagen and John Revill in Zurich; Editing by Gary McWilliams and Marguerita Choy

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