Rosneft signed a deal to buy eight drilling companies in Russia and Venezuela from Weatherford International as Russia’s largest oil producer builds its own oilfield services business.
The deal, which also sees the development of long-term cooperation between Weatherford and Rosneft, is expected to close in the third quarter of 2014, Rosneft said in a regulatory filing on Monday.
Financial terms were not disclosed.
“The deal fully complies with the adopted Rosneft strategy of the development of in-house service business,” said Igor Sechin, Rosneft chief executive.
Rosneft has pushed to build its own drilling business to cut costs, buying rigs from VTB earlier this year, as other Russian oil producers including Lukoil, Gazprom Neft and TNK-BP have sold their units.
Meanwhile, Geneva-based Weatherford in April pledged to sell or split off as much as $1billion in assets this year as part of a corporate turnaround plan.
“De-levering our balance sheet is a top priority,” said Bernard Duroc-Danner, Weatherford’s chief executive.
“Although our Russian business will be half its present size, the operations will be much leaner, intensely focused on our core product lines, and therefore more profitable.”
The Weatherford boss pledged additional steps in the company divestment plan over the coming quarters, according to the statement.
Weatherford bought drilling assets in Russia from TNK-BP in 2009 for $489million before Rosneft’s acquisition of TNK-BP last year.
The price of those rigs should exceed $500million, according to Russia’s largest bank, Sberbank.