LONDON—Russia's largest onshore oil driller is moving to become a private company in another sign of the toll a prolonged price slump is taking on the oil-services industry.

Eurasia Drilling Co. said Thursday that unnamed managers and "core shareholders" had made an undisclosed offer to take the company private, as it faces a challenging Russian economy, uncertainty from the effects of Western sanctions and geopolitics, and oil prices that nearly halved in the past year.

EDC said the offer was $10 a share, which would value the company at about $1.5 billion. The executives and shareholders already own much of the company and would buy shares worth about $430 million.

An independent committee tasked with considering the offer said Thursday it hadn't made a decision. EDC shares fell in London trading.

EDC had hoped selling a stake for $1.7 billion to Schlumberger, the largest oil-services company in the world, would help it ride out a period of industry turmoil. But Schlumberger last month walked away after waiting more than six months for Russian antimonopoly officials' approval.

That forced EDC to switch gears. The company said a plan to change the business "would best be achieved by taking the company private, so it can sustain itself through the expected and long, difficult market conditions."

"Given all these challenges, the management of EDC believe they require maximum flexibility to manage the business, which is best facilitated by being a private company," EDC's statement said.

A person close to the situation said taking the company private would reduce costs involved with being a publicly listed company, such as salaries for board members and expenses related to holding board meetings.

EDC is listed in Moscow with a secondary listing in London.

The move comes amid a tumultuous period for EDC.

Last week, EDC reported a more-than halving in revenues and a sharp drop in profit this year after one of its biggest Russian customers scaled back drilling efforts amid the slump in oil prices.

Western governments have targeted parts of the Russian oil industry over the situation in Ukraine. The sanctions have slowed activity in some areas, such as onshore shale oil drilling and offshore Arctic oil exploration, and limited finance options for some projects.

In January, Schlumberger had offered to buy a 45% stake in EDC, with an option to buy the rest of the company at a later date. The offer was accepted by EDC and originally expected to close by the end of March. But the deal got bogged down over concerns in Moscow that EDC's activities could be affected if Western sanctions against Russia were tightened.

EDC operates the largest fleet of onshore drilling in Russia and is vital to operations at the country's oil fields. Russia is highly dependent on oil and gas, the sales of which account for around half of its federal budget. The country recently reported production of 10.74 million barrels a day in September, a post-Soviet record.

Other large oil-services companies have been forced to make major changes as energy firms squeeze them for cheaper contracts. Halliburton Co. and Baker Hughes Inc., two of the world's biggest services firms, are merging, while Schlumberger has laid off tens of thousands of workers.

Write to Selina Williams at selina.williams@wsj.com and Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

October 08, 2015 08:55 ET (12:55 GMT)

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