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Schlumberger to buy stake in Russia’s largest oilfield service firm despite US sanctions

January 20, 2015, 12:38 UTC+3 LONDON
According to the statement, the total cost of acquiring this minority interest, including the cost of a call option and various non-competition agreements, is approximately $1.7 billion
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© AP Photo/Pat Sullivan, File

LONDON, January 20. /TASS/. The US oilfield services firm Schlumberger will buy a 45.65% stake in Eurasia Drilling Company (EDC), the largest provider of onshore drilling services in Russia, for $1.7 billion, Schlumberger said in a statement on Tuesday.

Under the deal, the principal shareholders of EDC will take the company private. Upon delisting of the company from the London Stock Exchange, Schlumberger, through one or more subsidiaries, will acquire a minority equity ownership interest of 45.65% in EDC, in exchange for consideration of $22 per share, the statement said.

“The total cost of acquiring this minority interest, including the cost of a call option and various non-competition agreements, is approximately $1.7 billion. The call option will allow Schlumberger, at its election, to purchase the remaining shares in EDC during a two-year period commencing three years from the closing of the transaction,” the statement said.

The transaction is expected to close during the first quarter of 2015, and is subject to customary closing conditions.

The companies announced about the transaction amid US sectoral sanctions against Russia over its stance on the Ukraine crisis, prohibiting, in particular, the use of US deepwater drilling and unconventional deposit development technologies in the Russian oil industry.

Russian Energy Minister Alexander Novak said earlier he did not rule out that western oilfield services companies might sell their production assets in Russia, if they quit the Russian market over the sanctions.

Eurasia Drilling Company was established on the basis of oilfield services assets of Russia’s largest independent crude producer LUKoil. These assets were purchased in 2004 by Russian businessman Alexander Dzhaparidze.

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