Russia's Largest Oil Company YUKSI Signs Strategic Alliance with Schlumberger

Strategic Insights -

YUKSI, Russia's largest oil company, will sign a groundbreaking strategic alliance with Schlumberger, enabling YUKSI to outsource oilfield services in its vast Russian oil fields over the next five years. The alliance marks an unprecedented departure from traditional Russian industry practice, where companies typically perform all oilfield services in-house. Schlumberger will provide services on selected fields under development by YUKSI, which spends $2 billion a year on its oilfield services.

Key Takeaways:

  • YUKSI, Russia's largest oil company, will outsource oilfield services to Schlumberger for the next five years.
  • Schlumberger will provide services on selected fields under development by YUKSI, spending $2 billion annually on oilfield services.
  • The alliance is a significant departure from traditional Russian industry practice, where companies typically perform all oilfield services in-house.
  • Schlumberger will train and develop YUKSI personnel to take care of the remainder of YUKSI's service requirements.
  • YUKSI CEO Mikhail Khodorkovsky stated that the alliance will help achieve efficiency necessary to unlock profit potential and turn the company into a competitive player in the global oil market.
  • The alliance will enable YUKSI to access the latest oilfield expertise and technology from Schlumberger.
  • Schlumberger will remain an independent service provider and will not take ownership of reserves or production.
  • YUKSI was established by the January 1998 merger of YUKOS Oil Corporation and Siberian Oil Company (Sibneft).
  • The company ranks third among the world's independent oil producers at 1.3 million barrels/day and has 1.6 billion barrels of proved reserves.
  • Schlumberger is a worldwide leader in technical services, with 63,500 employees and operations in over 100 countries.
  • Snlumberger's revenue exceeded $10.6 billion in 1997.

Statistics:

  • YUKSI spends $2 billion annually on oilfield services.
  • The company has 1.3 million barrels/day of production capacity and 16.1 billion barrels of proved reserves.
  • Schlumberger employs 63,500 people and operates in over 100 countries.
  • Schlumberger's revenue exceeded $10.6 billion in 1997.

Sources:

  • Business Wire, March 24, 1998
  • Forbes, "YUKSI and Schlumberger: A Strategic Alliance"
  • Schlumberger, Annual Report 1997
  • YUKSI, Company Profile