Consortium Formed of the RDIF, Saudi Aramco and PIF to Buy RUSNANO’s Share in the Novomet Group

14 October 2019

RUSNANO and a Consortium of investors consisting of the Russian Direct Investment Fund (RDIF, a sovereign fund of the Russian Federation), the Saudi Arabian Oil Company (Saudi Aramco), owned by the Saudi state, and the Public Investment Fund (PIF, a sovereign fund of the Kingdom of Saudi Arabia) have announced their agreement on binding documentation on the sale of a stake in the Novomet Group, one of Russia’s, and the world’s, leading producers of high-technology oil-submersible equipment. As part of the transaction, the Consortium will purchase 30.76% of the Novomet Group from RUSNANO.

This news was announced today, in Riyadh, in the presence of Russian President Vladimir Putin and King Salman bin Abdulaziz Al-Saud of Saudi Arabia.

It is expected that the transaction agreement will be signed once approval has been obtained from the Russian Federal Antimonopoly Service (FAS). The Consortium has submitted the necessary documentation to the FAS. The parties expect to formally enter into the agreement by the end of 2019.

The Novomet Group is recognised as a leader in the production of oil-submersible equipment which is guaranteed to be highly reliable and is intended for use in challenging conditions. Novomet’s pumps owe their competitive advantage to their nanocoating—the result of the use of powder metallurgy technology. The enterprise not only produces complete rigs for oil extraction and water pumping, but also maintains the equipment it supplies, providing a full range of services, from well selection to capital renovation.

Anatoly Chubais, Chairman of the Executive Board of RUSNANO Management Company: “Over the last nine years, with the participation of RUSNANO, Novomet has become one of the leaders in the Russian oilfield service equipment market and is now one of the world’s 10 leading companies in the sector. RUSNANO’s investments have allowed the company to modernize the production -in Perm - of submersible pumps for oil production, to increase revenues by 250%, to 23.2 billion roubles, to expand our international network for supplying equipment, which now covers 25 countries, and to open 12 service centres for equipment maintenance worldwide. We expect that the participation of Saudi Aramco, one of the world’s largest oil producers, as a strategic investor will strengthen Novomet’s strong position in the international oilfield services market and give a new impetus to its development.”

The Consortium of investors will enable the further development of the Novomet Group’s business, both in existing and new markets, including in the Middle East. In 2018, with support from the Consortium, Novomet made its first deliveries to the Saudi Arabian market.

Additional information

Reference

RUSNANO Joint-Stock Company was founded in March 2011 through reorganization of state corporation Russian Corporation of Nanotechnologies. JSC RUSNANO contributes to implementation of the state policy on the development of the nanotechnology industry by investing directly and through investment funds of nanotechnology in financially effective high-technology projects providing the development of new production facilities in the Russian Federation. Its primary investment focus is in electronics, optoelectronics and telecommunications, healthcare and biotechnology, metallurgy and metalwork, energy, mechanical engineering and instrument making, construction and industrial materials, chemicals and petrochemicals. 100 percent of RUSNANO’s shares are state owned. Thanks to RUSNANO’s investments, there are currently 105 factories and R&D Centers opened in 37 regions in Russia. JSC RUSNANO has profit for the last 5 years.

Management of assets of RUSNANO JSC is carried out by Limited Liability Company established in December 2013, RUSNANO Management Company. Anatoly Chubais is the Chairman of its Executive Board.

Work to establish nanotechnology infrastructure and carry out educational programs is fulfilled by RUSNANO’s Fund for Infrastructure and Educational Programs, which was also established during the reorganization of the Russian Corporation of Nanotechnologies.

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The Novomet Group is one of the largest holdings in Russia engaged in the production of equipment for oil extraction, including systems to maintain terrastatic pressure. The company’s strategy focuses on the creation and mass fabrication of equipment for use in challenging operational conditions. The company not only constructs fully-equipped rigs for oil extraction and pumping water, but it also provides comprehensive technical support for its equipment, from preparing it for operation at the well to complete overhaul.

Novomet’s technologies provide oil extraction companies with solutions to the problems posed by low oil recovery coefficients, and an increase in the ration of difficult-to-recover reserves. Other problems which Novomet’s technologies provide solutions to include high levels of associated gas content and mechanical impurities, high temperatures in the well, flooding, salt precipitation issues, and highly-viscous oil.

RUSNANO has been a shareholder in Novomet-Perm JSC since 2011.

For additional information, please visit novomet.ru