The world’s largest oilfield services provider Schlumberger is buying a majority stake in the Russian drilling contractor Eurasia Drilling.
The news was revealed by both Schlumberger and Eurasia Drilling on Thursday. Schlumberger is going to acquire a 51% stake in the drilling company.
Alexander Djaparidze, EDC’s Chief Executive Officer said: “I warmly welcome Schlumberger as our majority shareholder. It builds on our strategic alliance with Schlumberger since 2011 and our mutually beneficial business relationship since 2007.”
Eurasia Drilling in June said it had agreed the principal terms for an investment in the company by a consortium of the Russian Direct Investment Fund (RDIF), the Russia-Chinа Investment Fund, and “leading” Middle Eastern co-investors.
Work on this investment remains ongoing and the company expects to enter into a definitive agreement in relation to it in the near future, EDC said.
Djaparidze said: “The combination of the technology know-how and operational expertise of Schlumberger coupled to the financial strength of the Investment Funds, brings significant benefits to our customers and the Russian conventional land drilling market.”
Eurasia Drilling Company is an onshore and offshore drilling and well services contractor, boasting one of the largest land drilling fleets. The two companies did not say what the financial value of the transaction was, nor when they expected for the deal to be completed.
The signed agreement between Schlumberger and Eurasia Drilling Company is subject to the satisfaction of customary conditions, including approval by the Federal Antimonopoly Service of Russia.
This is not the first time Schlumberger has attempted to acquire a stake in the Russian driller. The oilfield services giant in 2015 backed away from a deal to buy a minority equity interest, the value of which was estimated at the time at around $1.7 billion.
The proposed 2015 deal came across obstacles in the form of Russian Federal Anti/Monopoly Service and the Government Commission on Monitoring Foreign Investment as the companies had to wait for Commission’s final written confirmation.
In light of that, the two companies extended the long-stop date for completion of the transaction four times, the final extension set for September 30, 2015.
Schlumberger then said it wouldn’t extend the pending agreement beyond September 30, 2015, adding that it would instead focus on other M&A opportunities.
Offshore Energy Today Staff