Schlumberger to Pay $1.7 Billion for Stake in Russia Driller

[Purveyor]

Schlumberger Ltd. (SLB) will pay $1.7 billion for a stake in Eurasia Drilling Co. (EDCL), a bet by the world’s largest oilfield services provider that economic sanctions won’t hold back Russia’s energy industry.

Schlumberger, based in Houston and Paris, will pay $22 a share for a 46.45 percent holding in London-traded Eurasia Drilling, according to a statement today. Schlumberger has an option to buy the rest of the company’s shares three years after the deal closes.

By buying into Russia’s largest driller, Schlumberger is putting aside concerns about economic sanctions and the state of the country’s economy. The deal comes as the slide in the crude price to less than $50 a barrel spurs consolidation in the services industry as demand for rigs drops and oil producers lean on suppliers to drive down costs.

“Schlumberger believes that the sanctions will be lifted sooner or later, and the company will be well-equipped to reap benefits from a growing Russian oil field services market by then,” Alexander Kornilov, an oil and gas analyst at Alfa Bank, said by e-mail.

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http://www.bloomberg.com/news/2015-01-20/schlumberger-to-pay-1-7-billion-for-stake-in-russian-rig-owner.html