Page 7 - FSUOGM Week 42 2019

FSUOGM COMMENTARY FSUOGM
The role Russian investment might play was unspecified but the facility will include rig and ship manufacturing and repair services naturally required by Moscow’s various oil and energy ser- vices companies.
On the sidelines of the official meetings, talks were reported to have taken place over a prospec- tive investment of around $150mn by Aramco in Eurasia Drilling Co. (EDC) – Russia’s largest drilling contractor, with more than 650 onshore and offshore rigs in operation. US energy ser- vices giant Schlumberger provisionally agreed to acquire a 51% stake in EDC in July 2018.
In an announcement published by Aramco, CEO Amin Nasser said: “Today‘s agreement is expected to enable future investments in both Saudi Arabia and Russia that come under the framework of the Saudi-Russian Energy Co-in- vestment Platform through Saudi Aramco, PIF and RDIF, targeting to promote investments in the energy sector in both Saudi Arabia and Russia.”
The press release noted that an MoU had been signedwithGazpromNeftforthe“exchange[of] technical knowledge for oil applications and identify mutual technical studies of interest to both companies”.
IPO intent
While some Western countries and their companies are showing some hesitation about getting further into bed with Saudi Arabia given the negative press in recent years, this does not seem to be bothering Moscow.
The RDIF’s CEO, Kirill Dmitriev, told Arab News this week: “I would say that some Russian investors are interested. For the sovereign wealth fund to invest in the Aramco IPO is still under discussion.”
He added: “We also have our Russia-China Investment Fund, and we have interest from Chinese investors to get involved in the Ara- mco IPO. We are still in discussion with our Chinese partners, and with our Russian investors.”
Riyadh was keen for Aramco to list in the West and for Western institutions to invest because of the legitimacy this would provide. However, given how long it has taken to get the IPO off the ground and the questions still lin- gering about valuation, Russian and Chinese involvement could provide a convenient solu- tion for Saudi, while offering major riches for those buying Aramco stock.™
DEALS:
• Aramco & Gazprom Neft: exchange technical knowledge for oil applications and identify mutual technical studies
of interest to both
companies.
• Aramco & Angara
Service: special chemicals and cleaning services with existing service providers to Aramco refineries and production sites.
• Aramco & Chelpipe: localise production of ball valves in Saudi Arabia through a joint venture with a local partner.
• Aramco & Galen: localise fiberglass rebar.
• Aramco & Integra: manufacturing facility for downhole rilling motors, drilling tools and bottom hole assembly components.
• Aramco & NKT: submersible cable line protectors.
• Aramco & Technovek: equipment and
parts for wellhead equipment.
• Aramco & TMK:
line pipe and OCTG components such as drilling casing and tubing material.
• Aramco & Intratool: localise hot tapping line stopping split tees and repair features.
Week 42 23•October•2019 w w w . N E W S B A S E . c o m
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