France's Schlumberger is removing its equipment from Yukos deposits

Thursday, August 22, 2019

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France's Schlumberger, the world's biggest oil and gas service company, is removing its equipment from Yukos deposits. This means that Yuganskneftegaz, the main Yukos subsidiary, will curtail daily output by 8% by the end of October, a Yukos spokesperson told Vedomosti. Yuganskneftegaz may produce about 40 million tons by the end of the year instead of the projected 51 million tons, if the saga surrounding its continues. The holding's output may total 74.5 million tons rather than 86 million tons, analysts predict. Yukos will never be same without Schlumberger, Valery Nesterov, an analyst with Troika Dialog, noted. Schlumberger treasurer Michel Soublin, who even served as Yukos chief financial officer from 1998 to 2001, is now a member of the Yukos board of directors. Yukos barely managed to produce 45 million tons of oil five years ago when it started cooperating with the French company. Schlumberger technologies enabled Yukos to surge ahead and to boost annual oil output by 10-20%. Analysts unanimously put the French contractor's decision down to Yukos' problems with Russian authorities, which have also affected Schlumberger. Vedomosti's source in Yukos noted that the holding owed Schlumberger $30 million. However, the French company has promised that it is not leaving Yukos forever. "Yukos currently has less need for our services due to its problems," a company spokesman said. "But we will continue to cooperate as soon as demand grows." Meanwhile analysts do not believe that the production slump will influence the Yuganskneftegaz value when it goes up for sale

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