Drilling fluids JV to continue

The US Department of Justice said Smith International Inc. and Schlumberger Ltd. have agreed to a $13.1 million settlement that will enable them to continue operating a drilling fluids joint venture.

DOJ said the deal marks the first time companies have been required to surrender the profits they made from violating a prior antitrust settlement.

The government sued the companies in July, alleging Smith sold Schlumberger 40% of the joint venture for $280 million in violation of a 1994 court order regarding the merger of Dresser Industries Inc. and Baroid Corp. When Dresser sold its 64% share in M-I Drilling Fluids Co. to Smith, a court barred Smith from selling the business or combining it with the drilling fluid operations of other companies.

Justice said the venture included M-I and Schlumberger's drilling fluids operations, and Smith and Schlumburger agreed the deal required modification of the 1994 consent decree.

Smith and Schlumberger said they may appeal a federal judge's finding that the deal put them in criminal contempt, with a penalty of $750,000 and 5 years probation each.

Smith said the companies "disagree with the court's ruling, continue to believe they did not willfully violate the decree, and are considering an appeal."