C.A.T. Oil AG, the largest provider of hydraulic fracturing services in Russia, will consider a London listing in the next 18 months as demand increases from oil producers seeking to drill hard-to-recover reserves.
The Frankfurt-traded company would list in London “to reach a deeper and broader investor base and improve stock liquidity,” Chief Corporate Finance Officer Leonid Mirzoyan said in an interview. The shares rose to 8.88 euros yesterday, the highest close since July 2008.
Russia’s largest energy producers, OAO Rosneft, OAO Lukoil and OAO Gazprom Neft, are increasingly employing hydraulic fracturing, which splits underground rock by blasting it with a pressurized mixture of sand, water and chemicals to release fuel. The drilling technique, known as fracking, has helped the U.S. reverse decades of declining production and spurred proposals for tax incentives from Russia’s Energy Ministry.
“Horizontal drilling, sidetracking and fracking may get a new boost in Russia,” Alexei Kokin, an oil and gas analyst at UralSib Financial Corp., said by e-mail. “They won’t be limited to Bazhenov or tight reservoirs, they will also be used on depleted fields to get as much as possible out of them.”
Rosneft, Lukoil, Gazprom Neft, Exxon Mobil Corp. and Royal Dutch Shell Plc have pilot projects drilling Siberia’s Bazhenov layer, which has geological similarities to the prolific Bakken formation in the U.S.
C.A.T. Oil, based in Vienna, has 15 fracturing fleets, 17 sidetrack rigs, and nine heavy mobile rigs, according to a December presentation.