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Integra brochure
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March 03, 2008

Integra Will Speak American


Yuliya NAZAROVA

Incorporation of a Joint Venture with Smith International

Integra Group and Smith International Inc. have entered into a joint venture which will specialize in oil-related services.  The services will be based on the most advanced technologies and technical solutions in Russia and the CIS.  According to Integra, this effort will boost Integra’s profits, and help Smith International enter the Russian market.

According to Integra’s press service, the joint venture will provide well drilling and completion services.  Smith Services (a business unit of Smith International Inc.) will provide technical solutions and well equipment, whereas Integra will contribute its infrastructure, engineering and technical expertise, and its staff.  The deal will be closed in the third quarter, when a comprehensive legal due diligence will have been completed and the required approvals will have been obtained.

Smith Eurasia, a member of Integra Group, has worked with Smith International Inc. for about fifteen years, said Felix Lubashevsky, president, Integra Group.  “This combination of advanced technologies provided by Smith International and the operating schedule of Integra in Russia and CIS will convert these vehicles into a highly competitive joint venture capable of boosting its market presence”, said Mr. Lubashevsky.

Incorporation of the joint venture may mean access to some technologies and know-how currently held by Smith International Inc.  The backlog in the technology remains, and this is the fastest way to catch up, says Alexei Logvin, analyst, Rus-Capital Management company.  Another reason for its incorporation is risk sharing: Russian oil companies have approached exotic recovery areas where operations are associated with new risks, says the analyst.

According to Alexander Nazarov, IFK Metropol, Smith International as a brand name as well as its technologies will improve Integra’s profit margin, which is the lowest one among oil service companies in the Russian Federation.  Whereas the U.S. company will use Integra to enter the Russian market, where its competitors, including Schlumberger, Halliburton, and Baker Hughs, have strong positions.