Drilling technology firm Plexus Holdings plc announced Tuesday that it has entered into an exclusive license agreement with Russian oil and gas equipment manufacturers LLC Gusar Ltd and CJSC Konar to undertake the rental, manufacture and servicing of Plexus' jackup drilling wellhead exploration equipment across the Russian Federation and other CIS states.
As part of the agreement, Gusar is required to pay Plexus $5 million within six months from the date of the license agreement and both Gusar and Konar will need to make a quarterly royalty payments to Plexus based on the invoice value on all Plexus products sold, rented or supplied by Gusar and/or Konar.
Plexus' CEO Ben Van Bilderbeek commented in a company statement:
"This important licencing agreement further progresses the expansion of Plexus' best in class wellhead equipment into both the major Russian and the CIS oil and gas markets. This new venture forms part of our strategy to extend our POS-GRIP jack-up exploration wellhead product line and associated services beyond our dominant North Sea high pressure/high temperature market which is currently severely impacted by the low oil price and consequent reduction in drilling activity, into new, larger growth markets around the world.
In a joint statement, Gusar and Konar, Plexus' licensing agreement partners, said in a company release:
"We are delighted to announce this exciting new venture with Plexus, which will see both of our oil and gas equipment manufacturing facilities supplying Plexus' best in class POS-GRIP wellhead technology to be made in Russia.
"As extracting hard-to-reach oil and gas goes deeper and becomes more complex, particularly in high pressure and high temperature environments, innovative, safe and effective wellhead technology is becoming increasingly important. In this vein, we believe Plexus' products are ideally suited for the Russian market both in terms of its existing needs and, in the future, for Artic exploration where there are ecological considerations as well as unique technical challenges.”
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