Russian oil and gas firm Eurasia Drilling Company and Schlumberger have agreed to swap the drilling and service assets and form a strategic alliance in the CIS.

The two companies signed signed a letter of intent (LOI) under which Schlumberger will sell all the drilling, sidetrack and workover rigs currently operating mainly in West Siberia to Eurasia.

Schlumberger will also purchase the Eurasia drilling services businesses, which include the directional drilling, measurement while drilling, cementing, and drilling fluids services to support 80 rigs.

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 five-year period.

Schlumberger Russia president Maurice Dijols said that the recent merger of Smith International with Schlumberger will allow Schlumberger to develop fit-for-purpose drilling assemblies in conjunction with the additional drilling services and drilling fluids services needed to address the Russian well construction market.