By Michael Dabaie 



  Schlumberger Ltd. said it initiated major changes to its organizational structure. 


  The oil-field services company said in a filing with the Securities and Exchange Commission that the impact of this reorganization, and other actions, will permanently remove more than $1.5 billion of structural costs on an annual basis. 


  Schlumberger expects that it will incur cash payments of about $1.2 billion to $1.4 billion as a result of implementing these actions, as well as reducing its variable headcount. 


  The rationalization of Schlumberger's asset base is ongoing and will result in additional non-cash charges, the company said in the filing. 


  Shares were up 2.3% to $19.76 in afternoon trading. 


  "With the ambition of a more agile organization fully aligned with our customer workflows, we are moving to four divisions from 17 product lines and are structuring our geographic organization around five key basins of activity," Chief Executive Olivier Le Peuch said in a presentation to the 2020 J.P. Morgan Energy, Power & Renewables Conference. 


  Mr. Le Peuch said in the presentation that North America land activity during the second quarter, as represented by rig count, stage count and completed wells, is declining sequentially to the upper end of the company's expected range of 40% to 60%. U.S. land activity has dropped more than expected, particularly frac activity, falling more than 60%, he said. Internationally, Latin America, Africa and Europe have experienced the largest activity declines in the quarter, he said in the presentation, which Schlumberger posted on its web site. 


  "Although we forewarned that Q2 will decline severely, the drop has been sharper than expected, due not only to the severe decline in North America land activity, but also due to the COVID-related disruptions in the international markets," according to Mr. Le Peuch's presentation. 


  Looking to the second half, the company expects production curtailment and the gradual resumption of demand to hold supply and demand in relative balance while maintaining a floor on oil price, Mr. Le Peuch said in the presentation. 


  Write to Michael Dabaie at michael.dabaie@wsj.com