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Integra brochure
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November 11, 2007

Integra goes outside the country

By Lyudmila Podobedova

Yesterday, Integra, one of major Russian oil service companies, announced establishment of five representative offices is CIS countries: Kazakhstan, Azerbaijan, Uzbekistan, Ukraine, and Turkmenistan.  Unlike its business branches, representative offices will not be engaged in any business operations.  However, analysts believe that Integra may make new purchases in these countries, following the analysis of the information supplied to the representative offices.  Integra was incorporated in 2004, and since then it got together about forty oil service companies engaged in oil-related machinery in Russia and CIS states.  Today its businesses include drilling, workover of wells, seismic geophysical examinations, as well as the manufacture of oil and gas machinery and tooling.  Integra is already engaged in business operations in Kazakhstan, and, according to RBC Daily, in Azerbaijan.  Its subsidiaries, including Smith Eurasia, Tumenneftegrofizika, and Azimuth already provide their services in the oil and gas market of Kazakhstan.  Last February, the company made an IPO offering through the London stock exchange, a public placement of 28% of its stocks, thus, having raised about $667 million.  Integra needs new repoffices to promote rapid and balanced development of its businesses in the regions.  Representative offices have the objective to support Integra’s business subsidiaries operating in the same countries and to market the services provided by the group.  In addition, its repoffices will do  market research and represent the group.  Mikhail Pack, analyst, Kapital Investment Group, believes that Integra wants to establish its repoffices to collect information on the markets and to analyze it with a view to identifying the companies to be acquired. Its repoffices would also assist its business units in their search for potential customers.  Valeri Nesterov, analyst, Troika Dialog, notes that expansion outside Russia goes in line with Integraís intention to develop into a global company interested in obtaining a major market share.  He pointed out that lately the group has been engaged in the acquisition, restructuring and upgrading of its assets that specialize in geophysics, workover of wells, seismic prospecting, and drilling machine building.  According to the expert, the group is capable of generating cash not only through the occupation of new market niches, but also through expanding outside Russia, as oil recovery in the above states is going up, making oil service businesses more attractive.  Besides, the climate in Russia prevents any oil fields from being serviced in the summertime, while it is possible in some of the above states.  Therefore, operations in the new market can improve the groupís efficiency and reduce its country-related and investment risks.