The successor of the KGB is stalling a huge oil deal involving US giant Schlumberger

The FSB is stalling the US oil-services giant Schlumberger’s latest deal.

Back in January, Schlumberger announced that it agreed to acquire a minority stake in Russia’s Eurasia Drilling Company, the largest provider of onshore drilling services in Russia, for $US1.7 billion.

But the FSB — the successor of the KGB — is reportedly holding up the 46% stake acquisition over concerns that Schlumberger “would have too much influence in Russia’s oil-services market,” two people familiar with the matter who asked not to be identified told Bloomberg.

“The transaction needs approval from a 21-member commission on foreign investment, which reviews major acquisitions in areas of the economy deemed strategic,”according to Bloomberg. “Members include FSB head Alexander Bortnikov, Defence Minister Sergei Shoigu and Deputy Prime Minister Dmitry Rogozin.”

The aforementioned people familiar with the matter told Bloomberg that “no final decision has been taken yet.”

It’s notable that the Schlumberger-Eurasia deal raised eyebrows back in January.

At the time of its announcement, there were several striking Russia-related uncertainties:

  1. It was an unusually loud investment by a US company in a Russian oil company following the sanctions imposed on Russia over the war in Ukraine.
  2. The investment came at a time when oil prices and the ruble both were both plunging dramatically.
  3. The deal extended a long-term alliance between the two companies at a time when US-Russian relations appeared to be headed for further deterioration.

On the other hand, others argued that this deal could serve to ease some pain after the plunging oil prices and sanctions bruised Russia’s energy sector.

We’ll see what happens.

Check out the full story over at Bloomberg.

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