Schlumberger acquisition of EDC requires restrictions, sanctions guarantee - Donskoi
MOSCOW. Aug 17 (Interfax) - Schlumberger's potential purchase of a controlling stake in Eurasia Drilling Company (EDC), which operates at strategic Russian fields, would face restrictions imposed from the Russian side and require guarantees concerning sanctions by the U.S. authorities, Natural Resources and Environment Minister Sergei Donskoi said.
"Eurasia Drilling operated at strategic deposits and when we examined this position [in the government commission on foreign investment], we said that Schlumberger should face the same restrictions that apply when we are talking about strategic deposits," Donskoi told reporters.
"Taking into account all those sanctions and problems with restrictions that are on display, and this is nonetheless a foreign company, the situation needs to be avoided when they are operating under some big contracts on strategic deposits, our projects won't fall apart because of sanctions. There must be guarantees that the company will be able to fulfill its obligations and operate without any restrictions on technology, work volumes and so on," he said.
The Federal Antimonopoly Service (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.
In the context of its examination, the FAS has requested information from the Natural Resources Ministry on whether EDC is a strategic company, and the ministry confirmed that EDC has operated and potentially could operate at strategic fields. Under Russian law, the purchase of a stake greater than 5% in such a company requires the consent of the commission on foreign investment, and the FAS has the authority to impose several restrictions on such a deal.
Schlumberger applied to purchase EDC once before, in 2015, but ultimately withdrew the application due to the slow pace of the FAS examination.