06/10/2017 |

Joint fund of Russia and Saudi Arabia to invest $ 150 million in Eurasia Drilling

Kirill Dmitriev

A joint fund of Russia and Saudi Arabia will invest $ 150 million in the Eurasia Drilling Company (EDC), Russian Energy Minister Alexander Novak said in an interview with The Financial Times.

“The two countries are investing $ 150 million in the Russian company Eurasia Drilling,” he said.

Last summer, Novak and Saudi Arabia’s Oil Minister Khalid al-Falih discussed the work of the Russian drilling company Eurasia Drilling on Saudi Aramco projects. According to the head of the Ministry of Energy of the Russian Federation, the purchase by the Russian Fund for Direct Investment (RFPI) and the UAE’s Mubadala Fund of a package in Eurasia Drilling can facilitate cooperation with Saudi Aramco.

Eurasia Drilling plans to work with Saudi Aramco and the head of the Russian Direct Investment Fund, Kirill Dmitriev.

RFPI applied to the Federal Antimonopoly Service for the purchase of a stake in EDC. In consortium with RFPI are the Russian-Chinese investment fund and Mubadala from the UAE.

At the same time, the American Schlumberger began the procedure for filing an application with the FAS to agree a deal to buy 51% of the EDC. However, FAS and the Ministry of Natural Resources stated that EDC is working on strategic Russian fields, so the American company must provide guarantees that the Russian drilling company will not suffer from sanctions. The Ministry of Natural Resources proposed to oblige Schlumberger to forcefully sell its stake to a strategic investor if the sanctions are strengthened, as well as retain all existing contracts of the EDC. Similar conditions were put forward by the Russian authorities in 2015, when Schlumberger wanted to buy EDC for the first time. Then the American company eventually abandoned the deal.

“We dealt with and considered the transaction irrespective of the Schlumberger transaction. For a long time, regardless of Schlumberger, we offered companies to enter into the capital with a minority stake, including to help provide services in the market of Saudi Arabia, the United Arab Emirates and other Middle Eastern countries. Our transaction is not tied in any way and was not tied to the Schlumberger deal, “Dmitriev stressed.

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