[Editor's note: This story was updated at 9:19 a.m. CDT July 19.]

Schlumberger Ltd. on July 18 named Olivier Le Peuch as successor of the company’s longtime CEO with industry veteran Mark G. Papa set to become non-executive chairman of the Schlumberger board.

The appointment comes less than a year after Le Peuch was promoted to COO—a move that analysts believed marked the formal beginning of CEO succession as current CEO Paal Kibsgaard had held the position before being named to lead the company.

Le Peuch, who has had a 32-year career at Schlumberger, is taking the reins as the oilfield services giant reported better-than-expected revenue driven by growing international demand. For the second quarter, the company earned 35 cents per share, in line with estimates from Tudor, Pickering, Holt & Co. (TPH) analysts.

“Global OFS bellwether Schlumberger kicks off [second quarter] OFS earnings season with results smack dab in expectations fairway, although impact of better-than-expected top-line growth was offset by underwhelming about 15% incremental margins, which feels like it’s [partially] a function of North America onshore pricing headwinds broadening out beyond just hydraulic fracturing services,” TPH analysts wrote in a July 19 research note. “Naturally, no change to [Schlumberger’s] constructive international outlook commentary as [the] company still expects its [international revenues] to be up high-single-digits this year.”

The TPH analysts noted that the bigger news was the official handling of the CEO baton.

“But we sense that we’ll have to wait patiently until this fall to hear Olivier’s strategic roadmap for Schlumberger,” the analysts added.

Schlumberger’s Next Chapter

Le Peuch and Papa will start in their new roles when Kibsgaard retires Aug. 1, after more than 22 years with Schlumberger including eight years as CEO and four as chairman.

Kibsgaard assumed the CEO role in 2011, succeeding Andrew Gould. He joined Schlumberger in 1997 as a reservoir engineer in Saudi Arabia.

In a February research note, Brad Handler, an equity analyst with Jefferies LLC, said Kibsgaard’s legacy “presumably will be shaped as his integration and transformation initiatives face a more normalized landscape.” Meanwhile, Le Peuch’s “background is steeped in technology, which may point to an emphasis tilt back toward more traditional technology roots.”

An electrical engineer with a master’s degree in microelectronics from the Bordeaux University of Science, Le Peuch began his career at Schlumberger in 1987. He spent his early career in custom software integration and development, and in high-temperature electronics development for wireline equipment.

Earlier in his career, he was also geomarket manager for the North Sea and president of Software Integrated Solutions. He eventually went on to hold a variety of global management positions, including president of the Cameron product lines, president of Schlumberger completions and vice president of engineering, manufacturing and sustaining.

Before being named COO in February, Le Peuch had served as executive vice president of reservoir and infrastructure, where he was responsible for the management of the Cameron product lines, including OneSubsea as well as some of Schlumberger’s leading technology products lines such as software integrated solutions and Schlumberger land rigs.

In a statement, Le Peuch thanked Kibsgarrd for his leadership, which included guiding the company through one of the worst downturns in the history of the industry.

“I am truly honored at being chosen to lead Schlumberger and its world-class workforce at a very exciting time in our company’s history,” he said.

The Houston-based company reported second-quarter revenue on July 19 of $8.3 billion, beating estimates of $8.2 billion made by analysts with Capital One Securities Inc. who noted that Schlumberger’s international revenue grew faster than expected.

International revenue rose 8% in the second quarter to $5.5 billion. Meanwhile, the company’s revenue in North America fell 11% to $2.8 billion. Net income rose about 14% to $492 million.

“We still like [Schlumberger] on a relative basis with the [international] growth story, improving [free cash flow], possible divestitures and a possible [Schlumberger Production Management] monetization,” the Capital One analysts wrote in a July 19 research note. “However, the [second-quarter] release and outlook probably aren't enough to push the stock higher.”

Emily Patsy can be reached at epatsy@hartenergy.com.

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