GE to Merge its Oil & Gas Business with Baker Hughes
Merger of GE Oil & Gas with Baker Hughes will
create world’s second-largest oil field services provider
USA: GE will combine its
oil-and-gas business with Baker Hughes in a deal that structures the new publicly
traded entity as a partnership jointly owned by each company's shareholders. GE
and Baker Hughes said the new company would have USD32 billion in annual
revenue and employ about 70,000 people. The companies expect to achieve USD1.6
billion in annual synergies by 2020. GE shareholders will own 62.5% of new
merged entity called "the new Baker Hughes." Current shareholders of
Baker Hughes will be apportioned 37.5% of the new entity. The new company, to
be listed on the New York Stock Exchange, will have dual headquarters in
Houston and London.
TechSci
Research depicts that GE's oil and gas division includes equipment for enhanced
oil recovery while Baker Hughes’s business includes drilling services, good
construction, completion equipment and reservoir analysis. Over the last few
years, global enhanced oil recovery market has been growing due to rise in
demand of global energy. Growing number of mature oil wells and high
productivity levels achievable by using EOR techniques, are some of the major factors
because which the global market for EOR
is expected to grow during 2015 – 2020.
According
to TechSci Research report “Global Enhanced Oil Recovery Market Forecast & Opportunities, 2020”, the global enhanced oil recovery market is
projected to witness growth of around 8% through 2020. With a share of over 30%
in 2014, North America is forecast to continue its dominance in the global
enhanced oil recovery market during 2015 - 2020. Over the next five years,
onshore crude oil reserves are expected to witness higher crude oil production
through enhanced oil recovery methods compared to off-shore oil reserves.
Gaseous enhanced oil recovery methods are expected to lead the global enhanced
oil recovery market, with the most favorable substance used for this method
being carbon dioxide.