Eurasia Drilling might sell key Russian division to company affiliated with Petroengineering - paper

MOSCOW. May 11 (Interfax) - Drilling company Razvitie has applied to the Federal Antimonopoly Service (FAS) for approval to acquire BKE LLC, the main Russian subsidiary of Eurasia Drilling Company (EDC), national daily Kommersant reported on Wednesday, citing sources.

The potential buyer was founded on April 7 by BKE vice president for legal affairs Dmitry Timonin, but the company's ownership structure changed on April 22, with 49% transferred to the principal shareholder of oilfield services company Petroengineering, Salikh Gadzhiyev, and 51% to its director of legal affairs Zubair Salimkhanov, the paper said.

The paper's sources said that Gadzhiyev is "close to Alexander Djaparidze," the founder of EDC, who controls about 30% of the company according to the latest information.

Advance Capital analyst Karen Dashyan estimated the possible price of the deal at 20 billion-30 billion rubles, but also did not rule out a "friendly" scenario.

Lawyers cited by the paper said that the plans to sell BKE might be due to the need to put the company under the control of a Russian legal entity, as well as the fact that it is no longer viable to operate through the usual foreign jurisdictions. BKE said in a report that some suppliers have begun to cancel equipment deliveries due to sanctions and exchange rate volatility.

BKE is the key asset of EDC, which provides exploration and production drilling, sidetracking and well workover services. The group operates primarily in Russia, and has several separate offshore projects in the Caspian Sea.

BKE reported in April that its IFRS net profit fell by more than 60% to 2.972 billion rubles in 2021. Revenue was flat at 48.425 billion rubles, while costs rose by 7.1% to 41.645 billion rubles. As a result, gross profit fell by almost a third to 6.78 billion rubles.