Schlumberger pays $1.7B for stake in Russian energy company

Schlumberger will spend about $1.7 billion for a minority stake in a big Russian energy company at a time when that country's relations with the West are under strain and as energy prices hit multiyear lows.

Schlumberger said last week that it would cut 9,000 jobs in response to falling oil prices, which have forced other energy companies to lower their forecasts for 2015 and pare back spending plans.

The world's largest oil field services company will pay about $22 per share to acquire a 45.6 percent stake in Eurasia Drilling Co. Ltd., which will go private and delist from the London Stock Exchange.

Eurasia is the largest provider of onshore drilling services in Russia. It also provides offshore services in the Caspian Sea and works in Iraq.

The Russian economy is feeling the impact of both the plunging energy prices and European Union sanctions over the crisis in the Ukraine, where Russian-backed rebels are fighting for control of parts of that neighboring country.

The deal announced Tuesday gives Schlumberger Ltd. a window to purchase the rest of the company at a later date. The companies expect to close the deal on the initial stake in the first quarter.

Schlumberger Ltd. has principal offices in Paris, Houston, London and The Hague and employs about 120,000 people.

The company's shares edged up 16 cents to $81.49 Tuesday before markets opened.

The shares fell more than 5 percent last year, while the broader Standard & Poor's 500 index climbed 11.4 percent.