RDIF, investors from Asia, Middle East to buy 16.1% of Eurasia Drilling

Interfax, 01.11.2017

BEIJING. Nov 1 (Interfax) - The Russian Direct Investment Fund (RDIF) has for the first time specified the size of the stake in Eurasia Drilling Company (EDC) that a consortium it formed intends to buy.

The size of the stake, 16.1%, was disclosed in an RDIF press release on cooperation between the Russia-China Investment Fund (RCIF) and the China-Eurasian Economic Cooperation Fund (CEF). The RCIF was formed by the RDIF and China Investment Corporation.

The RCIF and CEF have agreed to strengthen cooperation to implement investment projects in Russia and China, and as the first step the parties announced that CEF will join a consortium of international investors comprising the RDIF, RCIF and leading Middle-Eastern funds that will acquire a 16.1% stake in EDC, the RDIF said. The agreement was signed on Wednesday by RCIF and CEF during Russian Prime Minister Dmitry Medvedev's state visit to China.

The agreement also calls for the joint search, analysis and development of projects in industrial, transport and energy infrastructure.

"We can only say that several tens of millions of dollars. But what's important is that this is the first investment of this Chinese fund," RDIF head Kirill Dmitriev told reporters later, speaking about the amount of the deal on the Chinese side.

He said this investment from CEF is important because the integration of the Silk Road program with the Eurasian Economic Union (EAEU) is now being discussed.

The CEF has capital of $5 billion, 80% of which was provided by Exim Bank of China and 20% by the Bank of China, he said. "This fund is beginning an investment program with Russia, is finding points of contact with the Eurasian Economic Community (EurAsEC)," Dmitriev said.

He also said that the oilfield services sector is interesting not only for the RDIF's Arab partners, but also its Chinese partners.

The size of the stake in EDC that the consortium intends to buy was not disclosed until now. Dmitriev had only said that it would be a "substantial minority stake."

Concurrently, Schlumberger is interested in buying 51% of EDC. This is the U.S. oilfield services giant's second attempt to buy Russia's largest oilfield services company. In early 2015, EDC shareholders agreed to sell Schlumberger a 46% stake with the option to subsequently buy out the remaining 54% in three years, but the deal did not happen.

Dmitriev has said that the Schlumberger deal and the deal planned by the consortium are not related, and the RDIF, in partnership with the foreign funds, intends to acquire a stake in EDC even if Schlumberger does not go ahead with its deal.