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Rosneft closes rig acquisition deal

Rosneft position "strengthened" by deal.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Aug. 1, 2014 at 9:16 AM

MOSCOW, Aug. 1 (UPI) -- Russian energy company Rosneft said Friday it closed on a deal to acquire Venezuelan and Russian assets from oil services company Weatherford International.

"The realization of the deal will allow Rosneft to strengthen its positions on the market of drilling ... expand the array of service contractors which will enable to boost efficiency of drilling and hydrocarbons production [and] enhance financial results," the company said in a statement.

Rosneft under the terms of the deal acquires 8 companies that are part of Weatherford group conducting drilling operations in Russia and Venezuela.

The terms of the deal were disclosed in July. The acquisition for $500 million in cash includes 61 land operations in Russia and six in Venezuela. A combined 8,100 members of the rig staff were transferred to Rosneft at the close of the deal Friday.

Weatherford said the plan was part of an effort to streamline business operations. The rigs represent about half of its revenue in Russia and one-third of its business in Venezuela.

Rosneft was the target of Western economic sanctions imposed in response to the Kremlin's position on crises in Ukraine. The company said some of its operations moving forward may be impeded by the economic pressure.

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