Honghua Group, the world's second-largest producer of onshore oil and gas drilling rigs, has won a US$200 million contract to sell land drilling rigs in a move to boost its exposure in Russia.
The Sichuan-based firm agreed to sell low-temperature tolerant land drilling rigs, with the contract sum representing 40 per cent of its asset value and 50 per cent of its revenue as of the end of last year, it said in a statement yesterday.
Through the sale to Well Drilling, which exploits oil and gas in Russia, Honghua said it expected the deal to strengthen its foothold in Russia's emerging fuel market.
'In Russia's far eastern market, demand for land rigs is increasing and should continue in the future,' chairman Zhang Mi said.
He said the deal marked the first time a mainland firm had penetrated Russia's land drilling rig market. Expanding into emerging markets such as Russia was the group's top priority when it launched its HK$2.97 billion listing in March. It counts oilfield services units of China National Petroleum Corp and China Petroleum & Chemical Corp as its largest domestic customers.
Nabors Industries of the United States is Honghua's largest overseas client and a strategic shareholder.