Schlumberger Ltd (SLB.N), the world's largest oilfield services company, and oilfield equipment maker Cameron International Corp CAM.N said they would combine their subsea businesses as they look to tap into rising demand for drilling in deeper waters.
Oil companies, bolstered by high oil prices, have raised exploration spending, venturing into areas like the Arctic or heading to very deep sea levels in regions like West Africa, requiring new techniques to access oil.
About 200 such fields are expected to come online in the next four years and by 2020 more than 11,000 subsea wells will be in operation worldwide, Schlumberger CEO Paal Kibsgaard had said at a recent energy conference.
In subsea operations, production equipment is based in the sea floor and is built to withstand strong ocean currents and harsh temperatures.
"The JV's mission is to unlock greater reservoir potential from customers' subsea developments," Cameron Chief Executive Jack Moore said in a conference call on Thursday.
Cameron, which will manage the joint venture and hold a 60 percent stake, will receive $600 million from Schlumberger, it said in a statement.
Schlumberger will contribute its Framo, Surveillance, Flow Assurance and Power and Controls businesses to the venture and own the remaining stake.
"The partnership brings together Schlumberger's expertise in subsea processing and platform integration with Cameron's vast capabilities in subsea tree manufacturing," Barclays analyst James West said.
Credit Suisse advised Cameron while Goldman, Sachs & Co advised Schlumberger on the venture.
Cameron shares rose as much as 4 percent to $53.15, while Schlumberger was up more than 1 percent at $68.80. (Reporting by Swetha Gopinath and Thyagaraju Adinarayan in Bangalore; Editing by Don Sebastian and Saumyadeb Chakrabarty)