Olivier Le Peuch
Chief Executive Officer at Schlumberger
Thank you, James. Ladies and gentlemen, thank you for joining us on the call today.
In my prepared remarks, I will discuss our fourth quarter and full year results, highlight a number of achievements and share our thoughts on the outlook for 2024 and our financial ambitions. Stephane will then provide more detail on our financial results, and we'll open the line for your questions. Let's begin.
The fourth quarter was an impressive conclusion to the year's financial results. We grew revenue both sequentially and year-on-year, and we achieved cycle-high margins and cash flows during the quarter. Our strong performance was fueled by the international and offshore markets and was supported by robust sales in digital and integration of the acquired Aker subsea business. Throughout the year, we witnessed continued growth in international and offshore markets, where customers are focused on enhanced production and capacity additions. We've also seen further investments in digital technologies for planning and operational efficiencies. This is driving growth today and presenting opportunities into the future.
The international shift in investment has accelerated during the year with fourth quarter revenue growth driven by the Middle East and Asia and Europe and Africa while we continue to benefit from long-cycle developments, capacity expansions and exploration and appraisal activities. Specific to offshore, we delivered a very strong fourth quarter as we grew our legacy portfolio and harnessed a strong performance from our OneSubsea joint venture. On this note, I would like to extend my thanks to the entire Aker subsea team, who have joined us 3 months ago and have already contributed very well to our strong year-end results. Exiting the year, our international revenue and margins reached new cycle highs, marking our 10th consecutive quarter of year-on-year double-digit revenue growth on the international front. And we delivered exceptional free cash flow of $2.3 billion in the quarter.
Next, let me reflect on our accomplishments for the full year. We fulfilled our full year financial ambitions, growing revenue by 18%, surpassing our revenue growth target for the year and achieving adjusted EBITDA growth in the mid-20s. Additionally, we generated $4 billion in free cash flow, our highest since 2015. In the Core, across Production Systems, Reservoir Performance and Well Construction, we grew revenue by more than 20% and expanded pretax operating margins by almost 300 basis points. This was driven by strong activity internationally and offshore, new technology deployments and strong product sales. Notably, we achieved our highest-ever revenue in the Middle East, led by impressive growth in Saudi Arabia, the United Arab Emirates, Egypt and East Mediterranean.
Offshore also continued its positive momentum, led by remarkable growth in Brazil and Angola and very solid increases in the US Gulf of Mexico, Guyana and Norway. This was supported by the contribution from the acquired Aker subsea business, which enabled us to expand in certain markets, mainly in Norway and Australia. Additionally, our fit-for-basin business model continued to deliver differentiated value in North America, resulting in revenue growth outperforming the rig count. In digital, we continue to witness the adoption of our digital workflow and data/AI platform as customers work to enhance efficiency and returns by integrating our connected and autonomous drilling, data and AI solutions.
We now have more than 6,000 DELFI users and have generated 125 million compute hours, both representing more than 40% growth year-on-year. As a result, we achieved full year digital revenue of more than $2 billion with our new technology platforms comprised of cloud, edge and AI growing at a CAGR of 60% since 2021. In new energy, we forged new partnerships and made new investments in capture technology for carbon capture and storage. We are seeing very positive momentum in this space. And we are also -- we are actively participating in more than $400 million of CCS tenders globally. Additionally, in geothermal and geo-energy, we are partnering with government agencies in the Middle East on lower carbon electricity and in Europe on zero-carbon heating and cooling solutions.
As we advanced our three engines of growth, we also continue to deliver for our customers and stakeholders by achieving our lowest recordable injury rate and highest level of operational reliability on record. This is also reflected in industry surveys, where we are growing customer satisfaction through performance and value creation. Finally, we reduced our emission intensity across Scope 1, 2 and 3 on the path to achieving our 2025 emissions reduction commitment. Moving forward, we are well positioned to capture further growth. And I look forward to building on this strong success in the year ahead. I want to thank the entire SLB team for delivering these impressive results.
Turning to the macro. The characteristics of breadth, resilience and durability that have defined this cycle remain fully in place. This continues to be supported by the imperative of energy security to meet rising global demand, confirming our belief in the longevity of the cycle. After a year of demand growth in 2023, we anticipate further growth in 2024 that will continue to support the ongoing multiyear investment cycle. In international markets, growth momentum is set to continue with more than 2/3 of total investment taking place in the Middle East, offshore and gas resource plays. In the Middle East, growth will be led by Saudi Arabia and the United Arab Emirates, which continue to commit significant investments to increase production capacity in both oil and unconventional gas, followed by Iraq and Kuwait. Meanwhile, in Asia, countries such as China, Malaysia, Indonesia and India are leading new gas exploration and development. And across other international basins, we anticipate strong activity led by Brazil and followed by West Africa and Australia.
Looking across this wide baseload of activity, a significant portion is taking place offshore, where capital expenditures will continue their growth momentum in 2024. As a result, the rig count will continue to rise, mainly in the Middle East and Asia, responding to a strong FID pipeline in both shallow and deepwater. All in all, we see the potential for more than $100 billion in global offshore FIDs in both 2024 and 2025, underscoring the enduring strength of the offshore markets and supporting a very favorable subsea outlook for years to come. In this context, although geopolitical tensions persist in several regions, we do not expect any significant impact to activity in 2024, absent further escalation.
Additionally, although we have witnessed short-term commodity price fluctuate over the past few months, long-cycle investment in the Middle East, offshore and gas markets remain decoupled from short-term pricing, which will continue to support the resilience of these markets. In North America, following a noticeable moderation of activity in the later part of 2023, we anticipate capital discipline to continue. Consequently, investment levels will be sustained at 2023 exit rates with minimum -- minimal increase in activity as the region focuses on sustaining its record output from last year. This will drive further adoption of technology as operators aim to further improve efficiency and recovery rates.
Now let me explain how we expect these factors to drive our performance in 2024. In the international markets, we expect full year revenue growth reaching the mid-teens, led by the Middle East and Asia and Europe and Africa. This growth will take place both onshore and offshore with offshore benefiting from our newly formed OneSubsea joint venture, which enters the year with close to $4.5 billion of subsea production system backlog. We expect to deliver more than $4 billion in additional subsea bookings in 2024, representing an increase of more than 25% year-on-year as the market continues to expand. For clarity, when excluding the impact of Aker contribution and the expected decline in Russia, we expect double-digit international growth for the year. Meanwhile, in North America, although activity has moderated, we expect full year revenue growth reaching the mid-single digits, driven by our technology-leveraged portfolio in both US land and the US Gulf of Mexico.
Turning to the divisions. We expect all Core divisions to grow, led by Production Systems and Reservoir Performance. Digital & Integration is also expected to grow with digital growing in the high-teens, primarily driven by new technology platforms while APS remains flat. Directionally, we expect further margin expansion, driven by tight service capacity internationally, pricing and increased technology adoption. This will result in year-on-year EBITDA growth in the mid-teens.
With continued growth in earnings, our proven ability to generate cash and confidence in the long-term outlook, we are pleased to announce that the Board of Directors have approved a 10% increase in our quarterly dividend. And we'll also increase our share repurchase program in 2024. Combined, we are targeting a return -- to return more than $2.5 billion to shareholders in 2024, an increase of more than 25% compared to 2023. Looking to the first quarter. We anticipate the typical pattern of activity, beginning with the combined effects of seasonality and the absence of year-end digital sales. As a result, on a year-on-year basis, we expect first quarter revenue growth in the low-teens and EBITDA growth in the mid-teens. This will be followed by an activity rebound in the second quarter and further acceleration of growth in the second half of the year, particularly in the international markets. This will support the ambitions we have set for the full year revenue and earnings growth.
I will now turn the call over to Stephane.
