LUKoil and Schlumberger in talks on unit sale

Russia's largest oil firm LUKOIL said on Monday it was in talks about selling its Western Siberian drilling units to Schlumberger, the world's biggest oilfield service firm. LUKOIL launched an ambitious restructuring plan last year to raise profitability and slash costs to catch up with its peers. The plan includes selling LUKOIL's huge and costly oilfield service assets.

"We are in talks with different firms. At least four companies have shown preliminary interest. The alliance of Schlumberger and (the head of Russia's United Heavy Machinery group Kakha) Bendukidze is among them," LUKOIL's Vice President Leonid Fedun told a news conference. Fedun also said LUKOIL would keep its promise to boost exports of oil products to lucrative European markets by expanding capacities at its terminals.

Investors and analysts have criticized LUKOIL for slow production growth while output is booming at rivals YUKOS and Sibneft, which use modern technologies from Western oilfield service firms, the Russia Journal reported.

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