2011-05-31-2011-05-03-2011-05-03

Sold drilling service assets to one another in Russia, with Eurasia gaining 19 existing drilling rigs, 34 workover rigs & 23 sidetracking rigs operating mainly in Western Siberia & Schlumberger acquiring directional drilling, cementing and drilling fluids engineering services and materials supply.

Eurasia Drilling Co. Ltd.,Moscow, (London: EDCL) and Schlumberger Ltd., Houston, (NYSE: SLB) have closed a strategic alliance which includes each company purchasing service assets from each other for a total deal value of US$260 million.

Eurasia Drilling has acquired drilling and well-servicing assets in Russia from Schlumberger that include 19 existing drilling rigs with 17 drilling crews, 34 workover rigs with 25 related crews, and 23 sidetracking rigs with 20 related crews, currently operating mainly in Western Siberia. Primary clients of these rigs include Rosneft, TNK-BP, GazpromNeft and Lukoil with a total drilling output of approximately 700,000 meters in 2010.

Schlumberger has purchased drilling services assets from Eurasia Drilling, including directional drilling, cementing and drilling fluids engineering and materials supply. These service lines include 24 cementing crews, 57 directional drilling/telemetry crews and 50 crews for drilling fluids.

Schlumberger and Eurasia Drilling have concluded a strategic alliance in the former Soviet Union whereby Schlumberger and Eurasia Drilling will cooperate closely in relation to the supply of oil and gas services to Eurasia Drilling for a five-year period. This provides opportunities for both companies to deploy the latest technologies for more complex onshore and offshore markets.

The transaction includes a cash consideration of approximately US$173 million from Eurasia Drilling to Schlumberger.

Eurasia Drilling chief executive Alexander Djaparidze, chief executive of EDC, comments: "This is an important new alliance between two industry leaders that will further enhance our ability to improve performance for our Russian and international customer base. These additional rigs will strengthen our market position as well as further diversify our client base in line with our development strategy."

Schlumberger Russia president Maurice Dijols says, "The combination of Eurasia's drilling rig footprint with Schlumberger drilling services offers a unique solution to customers in Russia. The integration of Smith International and Schlumberger drilling technologies will lead to fit-for-purpose drilling assemblies as well as to additional drilling services and drilling fluids services for the Russian market-both on land and offshore."