UPDATE 2-Schlumberger sheds 14 more rigs with Saxon deal

Mon Dec 5, 2011 5:45pm EST

* Schlumberger gets out of non-core rig ownership business

* Saxon wants to be its go-to driller, enters Middle East

By Braden Reddall

Dec 5 (Reuters) - Schlumberger is selling its rig management business to a Canadian company that it part owns, as the world's largest oilfield services company sharpens its focus on providing services for rigs instead of owning them.

Saxon, bought by Schlumberger and private equity firm First Reserve in 2008, said on Monday it would take over 14 land drilling rigs and their crews in Oman, Pakistan and Venezuela, adding 1,100 people as it expands into the Middle East.

The deal should strengthen the ties of the two companies in well construction and other rig services, while getting Schlumberger out of a non-core business, Saxon Chief Executive Mick McNulty told Reuters in a phone interview.

"We'd like to be seen as their preferred driller," McNulty said of his company's 49 percent shareholder.

Saxon and Schlumberger were already partners in Mexico and Colombia before the $560 million takeover in 2008. Saxon also has drilling and workover rigs in Canada, the United States, Venezuela, Peru and Ecuador.

Saxon will own 95 drilling and workover rigs and employ 2,700 people as a result of the latest deal, for which no financial terms were disclosed.

McNulty said the Calgary-based company is building a back-office center in Dubai for its move into the Middle East region, which follows its recent expansion into Australia.

"We like the idea of having more diversity of revenue," McNulty said, adding that its main South American market still offered some growth opportunities.

For its part, Schlumberger is taking another step away from rig ownership, following an asset swap in May that handed Russia's Eurasia Drilling Co 19 drilling rigs, 34 workover rigs and 23 sidetracking rigs in Western Siberia in exchange for Eurasia's drilling services assets.

Schlumberger had already shed its offshore drilling rigs over the past decade, first selling the 44 rigs of Sedco Forex to Transocean Ltd in 1999 for $3.2 billion, followed by a couple more sold to Noble Corp four years later.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.