July 21 (UPI) -- U.S. oilfield services company Schlumberger announced a deal that establishes it as the majority owner in Russia's largest drilling and services provider.
Extending a six-year relationship, the leading services contractor Schlumberger said it acquired a 51 percent stake in Eurasia Drilling Co. Ltd.
The terms of the deal weren't disclosed by either company. The Wall Street Journal valued the deal at $1.7 billion.
EDC holds one of the largest fleets of onshore drilling units in the world and described itself as the "premier supplier" of services to the Caspian Sea region, home to some of the larger oil and gas fields in the world.
"The combination of the technology knowhow and operational expertise of Schlumberger coupled to the financial strength of the investment funds, brings significant benefits to our customers and the Russian conventional land drilling market," Alexander Djaparidze, the company's CEO, said in a statement.
EDC remains in talks with a consortium of the Russian Direct Investment Fund, a Russian-Chinese investment group and some Middle East players.
In October, the Russian driller said it expected to realize revenue of about $1.7 billion and capital spending of around $250 million. Apart from its Russian and Caspian Sea portfolio, the company does business in Iraq. Schlumberger's first quarter revenue of $6.9 billion was down 3 percent compared to the previous term, but up 6 percent from first quarter 2016.
In its outlook statement from last year, the Russian company said it was anticipating a lower price for crude oil and continued pressures from U.S. and European sanctions.
The announcement from Schlumberger followed a decision by Exxon Mobil to sue the U.S. government after the energy company was accused of violating sanctions against Russia.
EDC itself is not listed as a sanctioned entity by the U.S. State Department.