(Bloomberg) -- Schlumberger Ltd. won preliminary approval to finally complete a three-year-old plan to buy into Russia’s biggest oil driller.
Russia’s special commission on foreign investment approved Schlumberger to buy a blocking stake of 25 percent to 49 percent in Eurasia Drilling Co. Ltd., subject to certain conditions, Federal Anti-Monopoly Service head Igor Artemyev said, according to a transcript on the government’s website. The regulator represented Russia in its on-off talks with the global oil services provider and prepared the case for the commission.
Schlumberger shifted its sights to less a smaller stake after Russia blocked its initial bid from 2015 to possibly buy the whole company. As tensions mounted with the west over a deadly conflict in Ukraine and the U.S. expanded sanctions to the Russia’s energy industry, the Kremlin raised concerns that the western driller would control a significant part of the oil-services industry in a nation heavily dependent on crude and gas revenues.
The special commission recommended combining Schlumberger’s deal with a joint bid from the Russian Direct Investment Fund and the United Arab Emirates, with the oil-field services provider getting 25 percent and others 16 percent, Artemyev said.
“Twenty-five plus 16 is a very good configuration, not getting control but bringing in hundreds of millions of dollars, or even billions, for Eurasia, which gets interesting foreign investors with great experience and modern technology,” Artemyev said.
The commission encouraged Schlumberger and the RDIF to combine their bids to “lead to the final decision of how much is held by which shareholders: Russian, United Arab Emirates and Schlumberger,” he said, without providing more details.
Eurasia, which holds about a 20 percent share of the Russian oil-drilling market, last year also agreed “on investments” from China and the Middle East with RDIF. The drilling company focuses on servicing conventional oil fields in Russia, which do not fall under international sanctions that target Arctic, deepwater and shale-oil projects.
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