MOSCOW, October 2010—Eurasia Drilling Company Limited (Eurasia) and Schlumberger announced that they have signed a Letter of Intent to sell and purchase each other’s drilling and service assets, while entering a strategic alliance in the CIS. Schlumberger has agreed to sell all drilling, sidetrack and workover rigs currently operating mainly in West Siberia to Eurasia. As part of the sale, the rigs’ crews will transfer to Eurasia. Schlumberger has also agreed to purchase the Eurasia drilling services businesses, which include the directional drilling, measurement while drilling, cementing, and drilling fluids services to support 80 rigs. The field crews to support delivery of these services will move to Schlumberger. In addition, Schlumberger and Eurasia have agreed to enter a strategic alliance upon completion of the transaction whereby Schlumberger becomes the preferred supplier of drilling services to Eurasia Drilling for up to 200 rigs for a 5-year period.

“We see this transaction as a recognition of Eurasia’s leading position in the well construction market as well as the foundation of a long-term relationship between two industry leaders. Since Eurasia was created, our objective has been growth through continuous improvement in product delivery. The additional rigs will strengthen our position in the Russian drilling rig market as well as helping us diversify our client base. In addition, the divestiture of Eurasia’s oilfield services arm will allow us to focus on our core drilling business. By joining forces, I am convinced that we will have the right formula to meet our customers’ needs,” said Alexander Djaparidze, Chief Executive Officer of Eurasia.

Maurice Dijols, President of Schlumberger Russia added “The combination of Eurasia’s drilling rig footprint with Schlumberger drilling services offers an unmatched solution to customers in Russia. The recent merger of Smith International with Schlumberger will allow us to develop fit-for-purpose drilling assemblies in conjunction with the additional drilling services and drilling fluids services needed to address the active Russian well construction market. In addition, the alliance will also provide opportunities for both companies to deliver a unique offering including the deployment of the latest technologies for the more complex onshore and offshore markets.”