$1.3bn deal brings firm into booming US oil and gas drilling market
Speciality chemicals group Solvay has agreed to buy Chemlogics – a US firm specialising in chemicals for oil and gas exploration – for $1.3 billion (£840 million) in cash.
Chemlogics predominantly produces chemicals for the ‘stimulation and cementing’ phases of oil exploration. The cement used to set oil and gas wells includes a complex mixture of surfactants and other chemicals to control its properties – cement chemistry was one of the faults identified leading to the Deepwater Horizon disaster in 2010. Stimulation is the process by which chemicals can be used to dissolve material blocking the pores in rock around a well, or in hydraulic fracturing (fracking) to get gas out of shale deposits.
With shale gas extraction booming in the US, Chemlogics has grown strongly in recent years. Solvay is looking to take advantage of this to build a stronger presence in the US. Chemlogics’ expertise fits well with Solvay’s existing activities in chemicals for the oil and gas market.
The move is part of an ongoing consolidation programme at Solvay, including a recent tie-up with Ineos for a PVC joint venture.