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By Andy McCue, 19 September 2003 16:48

NEWS French IT services firm Atos Origin is the latest company to be linked with the loss-making services arm of Schlumberger. Speculation is rife that Atos Origin is in advanced talks with SchlumbergerSema for the creation of a joint venture, and sources close to the situation have confirmed to silicon.com that Atos Origin is close to finalising the deal. French daily newspaper La Tribune is also reporting that SchlumbergerSema will announce details of the tie-up to its own staff across Europe today. The report indicates that technical ownership of the joint venture will still remain with Schlumberger, although operational control will go to Atos Origin. Robert Morgan, chief executive of outsourcing consultancy Morgan Chambers, said this kind of joint venture is logical because Atos Origin would not be able to raise the cash to buy SchlumbergerSema. While SchlumbergerSema's UK and Scandinavian operations are attractive for any potential buyer, the loss-making French and German parts of the business are not and US services firm CSC pulled out of talks to buy SchlumbergerSema last month. Schlumberger bought Sema just two years ago for £5.2bn but has stated its intention to focus purely on its own core oil and energy markets. Neither SchlumbergerSema nor Atos Origin would comment on the tie-up, saying that no formal announcement had been made and that it was "nothing more than speculation". Anthony Miller, analyst at Ovum Holway, said questions remain over the actual structure of any joint venture and how it would be able to market itself well enough to compete for big contracts. "My initial reaction is that it won't deliver the goods. For joint ventures going to market the record is not very good. It really depends on how things are put together but it is a bit of a patchwork solution," he said. Another source told silicon.com that after a year of speculation linking SchlumbergerSema with various potential buyers the firm's customers would be examining their contracts as many will have get-out clauses in case of a change of ownership. "Clients could be forgiven for wondering if they are going to be traded up so it would be no surprise if they were re-examining their contracts," said the source.