Describing the activities of his corporation in Russia, Martin Craighead, chairman of the board of directors and head of the American company Baker Hughes, said that our country is one of the largest oil and gas producers and exporters in the world. In addition, it has huge untapped hydrocarbon reserves so far. Baker Hughes' interest in Russia is based precisely on these fundamental business factors.
Among the largest
One of the largest oil and gas companies in the world, Baker Hughes was founded at the beginning of the last century in the United States. Today, the total number of personnel in the manufacturing giant is about 30 thousand people working around the globe. The largest reconnaissance projects to identify oil and gas deposits, the latest technologies for their production - these are all Baker Hughes. The subsidiaries of the company provide equipment for the development and drilling of wells not only themselves, but also partners in more than 120 countries of the world.
Today, the giant includes several powerful associations, including world-famous ones such as Baker Petrolight, Cen Trilift, INTEC and others. In addition to the discovery and development of deposits of deposits of valuable fuel resources, the company’s specialists evaluate reservoir parameters and develop new technologies for the efficient extraction of raw materials. Over the course of a century, conquering new territories and entering into partnerships with other giants of the oil and gas industry, Baker Hughes became one of the three largest world companies working in this direction.
From creators to followers
In the tenth years of the last century, inventors Walter Sharp and Howard Hughes developed a rock-cut drill bit, unique at that time. Keeping his invention in the strictest confidence, he conducted two tests, one of which was a failure. However, the second showed that the new device is capable of reversing the idea of ​​oil producers about well drilling technology.
A year later, entrepreneurs received a patent for their invention and founded the Sharp-Hughes Tool Company in Texas. With the death of Walter Sharpe in 1912, his part of the business was acquired by Hughes and renamed the company into the Hughes Tool Company. It happened three years after Sharpe's death.
In the same years, in the same place, in the United States, another company was founded - Baker International. Its founder was the inventor Baker, who developed a unique cable for drilling properties. He received a patent for this discovery in 1907. And by 1928, the future oil giant gave its brainchild a new name - Baker OilT ools, Inc. Thirty years after the death of Baker, who died in 1956, his company entered a new round of development by merging with the Hughes Tool Company. The joint organization was named Baker Hughes.
Takeover and merger
Combining their assets, the two oil giants dominated the global market for many years. To keep this bar further, new injections were needed. In 2014, Baker Hughes began negotiations on a merger with Halliburton, one of the world's largest oil and gas services services corporations. The latest technologies developed by Halliburton specialists, which employ about 70 thousand people, could contribute to the more powerful development of Baker Hughes.
Both companies showed interest in the deal, hoping to create the most powerful force capable of leading the global oil and gas market. Baker Hughes was even ready to make a bargain through the takeover of its company by Halliburton Corporation. The amount announced in the press release was nearly $ 35 billion. However, six months after the start of the takeover negotiations, Halliburton announced the termination of the transaction as unprofitable. BakerHughes had to look for a new partner.
Baker Hughes Assets
Specialists in the design and construction of gas and oil fields, equal to working in this organization, can boast of a rare company. They also determine the most effective technology for field processing of various reservoir gas deposits, the required number of drilling rigs in the field and solve a number of other important production problems.
With highly qualified personnel, as well as the latest production equipment, one of the leading American mining companies is able to count on cooperation with many corporations in the world. Of particular interest to Baker Hughes extends to the state’s rich fuel resources. The once-leading corporations in these countries eventually became part of the American oil giant. But the main backbone of the company was American firms. At different times, Baker Hughes joined: the leading manufacturer of drilling rig accessories Elder Oil Tools, drilling fluid developer Milchemand Newpark, lifting equipment supplier Centrilift and many other corporations. Until 2017, Martin Craighead was Chairman and CEO of Baker Hughes.
Representation geography
Over the centenary of its existence, Baker Hughes has regularly increased its technological and economic power by reducing production costs and increasing profitability. The largest market for the company's products is the United States of America, where its headquarters are located in the same state in Texas. However, Baker Hughes towers are located around the world. The Corporation is actively developing deposits in the North Sea, Latin American countries, the Asia-Pacific region, the Middle East, the Caspian Sea, the Mediterranean, and the West African coast.
The most significant subsidiaries of the company with their own representative offices, as well as research centers are located in Aberdeen and Hartlepool (UK), Kuala Lumpur (Malaysia), Pescara (Italy), Celle (Germany), Aktau (Kazakhstan), Dubai (UAE) . But their largest number is in the USA and the Russian Federation.
On the map of Russia
Several Russian regions immediately fell into the Baker Hughes interest zone when the company began to expand its zone of influence on the oil and gas market, exploring new geographical territories. Tyumen, Orenburg, Moscow, Noyabrsk, Nizhnevartovsk are the cities where the company’s offices are located. And of course, the American holding, which pays special attention to its own developments and owns many research centers, could not ignore Novosibirsk, which is famous all over the world for its unique scientific base. Almost the main assets of the company located in our country are concentrated in this Russian region. In Novosibirsk, one of the units of the American giant, Baker Atlas, is the most active. Also, a large multidisciplinary base is deployed on Sakhalin.
Subsidiaries of the company operating in Russia are registered both here and abroad, mainly in the USA. So, in our capital, "registered" Baker Hughes. Moscow has attracted American partners located here by the main offices of leading Russian oil, gas and chemical companies. And in the United States, Baker Hughes Russia Inc. is registered, the name of which speaks for itself.
Mutually beneficial partnership
The beginning of active work in Russia began for the American giant in the distant 70s of the last century with the supply of oil and gas equipment for Soviet enterprises. Subsequently, our Western partners turned their interests to exploration and production of raw materials, gradually increasing their activity in this direction and developing contacts. Currently, Baker Hughes Joint Stock Company is aimed at the comprehensive development of its activities in the Russian regions, especially in Siberia.
For many years, the American holding company only ensured the construction of horizontal, multilateral wells to Russian organizations, connecting to them only at the last stage of development. The technologies used for this were developed specifically for local conditions. They allowed to penetrate to the stocks of raw materials, deeply located in solid rocks. First, the company’s specialists were involved in the development of oil fields, over the years they were connected for gas production.
New merger
In early 2017, two powerful American corporations announced a merger through the takeover of Baker Hughes by General Electric, a company specializing in the production of industrial and military equipment. The “daughter” GE - GE Oil & Gas, focused on mechanized gas production, was supposed to enter the joint organization. In a joint press release, it was announced that by combining its assets and spreading to 120 countries of interest to them, the company predicts to increase its total revenue to $ 32 billion over the next year.
The upcoming transaction was unanimously approved by the boards of directors of both companies. And by July 2017, the agreement was signed. According to its terms, 62.5% of the shares of the combined corporation were transferred to the GE Company. Its headquarters are located in Texas, in the city of Houston, as well as in the capital of Great Britain - London. After the announcement of the successful conclusion of the transaction, the company's shares rose in value. The projected increase in profits began to bear fruit.
Role distribution
General Electric, an infrastructure and media project manager, has breathed new life into Baker Hughes. Drilling rigs in the United States, the Asia-Pacific region, the Mediterranean, the Middle East and other regions where the oil and gas giant has its own subsidiaries are aimed at the speedy reconstruction of facilities, which will lead to more production and development of raw materials.
A widespread merger press release spelled out the intended distribution of roles on the corporation’s single board of directors. Its chairman was assigned to GE CEO Jeff Immelt. The head of GE Oil & Gas Lorenzo Simonelli should take the place of president and head of the combined company, and Martin Craighead, chairman of the board of directors and head of Baker Hughes, should take the chair of its vice chairman. Initially, before the merger, both boards supported the respective appointments.
Out of competition
On average, after the merger, the value of GE, and therefore Baker Hughes, shares rose slightly, but in 2018 it should increase by $ 0.04, and by 2020 - by 0.08. Following the conclusion of the transaction, all the shareholders of the united corporation increased their personal assets, to a greater extent so far the owners of the oil and gas company have been affected. The value of each security was estimated at $ 17.50. In addition, they will get a 37.5% stake in the combined company. By 2020, all shareholders of GE Company will experience a significant increase in profits in their bank accounts.
Before the merger, the Baker Hughes was among the three strongest corporations in the world that supply equipment, as well as technology for the oil and gas industry. What the company is doing after the merger with GE, it will become clear in the coming months, since the time after the merger of the two leading global corporations is not so much. A cardinal change of occupation will not occur. However, the number of regions of its influence may change.