Resources Ministry proposes requiring Schlumberger to sell EDC in event of new sanctions
MOSCOW. Aug 23 (Interfax) - Russia's Natural Resources Ministry has proposed two significant conditions to the Federal Antimonopoly Service (FAS) for approving Schlumberger's acquisition of a 51% stake in Russia's Eurasia Drilling Company (EDC), a source close to one of the agencies told Interfax.
If the deal is made, the ministry proposed to prohibit the U.S. oilfield services giant from terminating any of EDC's existing contracts.
In addition, the ministry proposed a requirement that would obligate Schlumberger to sell the 51% stake in EDC to a Russian investor if the United States imposes additional sanctions that might affect the drilling company.
The FAS is currently examining Schlumberger's application to purchase 51% of EDC, as well as an application from Russian Direct Investment Fund (RDIF) in a consortium with UAE's Mubadala fund to purchase a minority stake whose size has not been disclosed. Formally, the two deals are unrelated, but EDC's largest shareholder and CEO, Alexander Djaparidze, has said that they complement one another.
Schlumberger applied to purchase EDC once before, in 2015, but ultimately withdrew the application due to the slow pace of the FAS examination.