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. Last Updated: 07/27/2016

Drilling Rig JV Formed

Two U. S. companies, Caterpillar Inc. and National-Oilwell, and Russia's leading heavy machinery producer, Uralmash, have formed a joint venture to produce drilling rigs for the oil industry in the Commonwealth of Independent States.

Bill Beitz, a Moscow representative for Caterpillar Engine Division, said Thursday that the new company, UNOC Equipment and Supply, will provide customers with a competitive alternative to imported rigs.

He said that the joint-venture agreement was signed earlier this week in Moscow at an Oil and Gas Conference sponsored by the USA-Russia Business Council. The three firms signed a cooperation agreement in August.

Beitz said that the joint venture will produce up to 20 large rigs per year, but said that the production figures are yet to be finalized. He said that all three companies have fairly equal shares in the company.

Russia is in desperate need of a new oil rigs to stabilize its oil production, which has been falling over the past years. This year's output was expected to fall to 340 million tons from 394 million in 1992.

Major Western financial institutions have recently announced about $1 billion in loans to Russia's oil producers, allowing them to buy equipment.

Uralmash is Russia's leading producer of large drilling equipment with over 25, 000 workers based in the Urals town of Yekaterinburg. Before 1988 it produced equipment for about 400 rigs a year, but falling oil production has seen it too lower production.