The Russia-China Investment Fund (RCIF) leads a consortium that will acquire a 16.1 percent stake in Russia’s Eurasia Drilling Company (EDC), a Russian fund involved said.
RCIF involves the Russian Direct Investment Fund (RDIF) and China Investment Corporation.
The consortium also includes funds from the Middle East whose names have not been disclosed.
EDC is Russia’s top oilfield services provider.
The acquisition will strengthen China’s foothold in Russia’s energy industry amid a broader political and economical rapprochement between the two neighbours and Moscow’s cooling ties with the West.
Russia has become China’s top oil supplier with deliveries in excess of 1.5 million barrels per day while Chinese conglomerate CEFC has bought into top Russian oil producer Rosneft.
U.S. oilfield services company Schlumberger attempted to buy 51 percent of EDC in July, a deal which Russian authorities said posed “big problems” give the current political climate.
Schlumberger’s previous 2015 attempt to buy 45.65 percent of EDC for $1.7 billion failed after Russian authorities repeatedly delayed approval.
Kirill Dmitriev, head of RDIF, has said Schlumberger’s deal is a separate matter.
(Reporting by Polina Devitt and Vladimir Soldatkin; editing by Jason Neely)