SCHLUMBERGER & EURASIA KEY FINANCIALS
Issues have emerged in Russia that could delay or prevent Schlumberger Limited. (NYSE:SLB) from closing a deal with Eurasia. Earlier this year, Schlumberger made a $1.7 billion offer to take a stake in Eurasia, also expressing willingness to acquire the rest of the company. Eurasia is Russia's largest oil-services company. However, as it turns out, Russia's Federal Security Service, also known as FSB, is expressing some reservations over the deal.
Chances are that the Schlumberger's deal with Eurasia may delay to close or even fail to happen at all as politics creep into the transaction. In January, Schlumberger expressed interest in taking a 46% stake in Russia's Eurasia at the cost of $1.7 billion. Moreover, Schlumberger also said it could acquire the rest of the stake in Eurasia to take over the whole company.
Concerning of Western influence
The deal to acquire a stake in Eurasia and later come back for more may be sweet for some, but not FSB. According to people familiar with the debate around the transaction, the issue of concern is the amount of influence that Schlumberger Limited. (NYSE:SLB) might end up having in Russia's oil-services sector. The FSB is clearly worried that if Schlumberger does acquire the stake that it wants (46%) and later acquire the rest of Eurasia, the company might end up having too much influence in the oil-services market in Russia.
Schlumberger is based in both Houston, Texas, U.S. and Paris, France.
Politics in the deal
At a recent conference call, Eurasia's VP, Tom O'Gallagher, said that the issues around their deal with Schlumberger are much more political than they are practical.
Russia is currently at odds with the U.S. and the European Union over its military activities in Ukraine. The country has been slapped with several economic sanctions, including a ban on the export of certain drilling technology.
Given the existing tension between Russia and the U.S/EU, FSB seems to fear that acquisition of Eurasia might expose Russia to more economic problems.
For the deal between Schlumberger Limited. (NYSE:SLB) and Eurasia to go through, the approval of Russia's commission on foreign investment will be required. FSB has representation in the commission.
Eurasia Drilling Company Ltd (EDCLq.L)
|November, 24, 09:45:00|
|November, 24, 09:40:00|
|November, 24, 09:35:00|
|November, 24, 09:30:00|
|November, 24, 09:25:00|
|November, 24, 09:20:00|
BLOOMBERG - As Saudi Arabia led OPEC’s output cuts this year to shrink a global glut, it’s lost out on market share in the world’s biggest energy consumer. Russia in September retained the top Chinese supplier spot for the seventh straight month, while the kingdom was third.
PLATTS - The quality of Russia's key Urals crude exports towards Europe will continue to fall next year as more of the country's low-sulfur oil flows are diverted eastward to China, Russian national oil pipeline operator Transneft warned.
FT - OCI — the world’s third-largest polysilicon maker by capacity and South Korea’s biggest — this month reported a 3,373 per cent increase in operating profit to Won78.7bn ($72m) for the July-September quarter, its best performance in five years. Rival Hanwha Chemical saw third-quarter net profit jump 25 per cent to a record Won252bn.
U.S. Rig Count is up 330 rigs from last year's count of 593, with oil rigs up 273, gas rigs up 58, and miscellaneous rigs down 1 to 0. Canada Rig Count is up 41 rigs from last year's count of 174, with oil rigs up 13, gas rigs up 30, and miscellaneous rigs down 2 to 2.