Abu Dhabi: The energy services giant Baker Hughes will look at continuing investments in the region and boost partnerships as part of a growth strategy.
“Every market is different and the intent is to be close to our customers,” said Ayman Khattab, CEO for South Gulf and East Africa at Baker Hughes, a GE-owned entity.
The US firm recently acquired a 5 per cent stake in Adnoc Drilling, a subsidiary of Abu Dhabi National Oil Company, for $500 million (Dh1.83 billion) in a deal that values the latter at around $11 billion (Dh40.4 billion). “This is by far a huge investment — bigger than what we did and bigger than what anybody else did in the UAE. This shows how committed we are to Abu Dhabi and to the part of the growth that takes place in the market.”
Adnoc Drilling is the sole provider of drilling rigs and associated services to the Adnoc Group and the partnership represents the first time Adnoc has brought an international strategic partner to acquire a direct equity stake in one of its existing services businesses.
“The whole idea of this partnership is to introduce more efficiencies, drill wells faster and cheaper, and therefore reduce the cost of producing a barrel, which is in line with the vision of Adnoc 2030 and in line with what the government is aspiring for,” Khattab said.
The deal comes as Adnoc Drilling plans to increase its conventional drilling activity by 40 per cent by 2025, and substantially ramp up the number of its unconventional wells in line with a 2030 smart growth strategy. It also seeks to reduce drilling time by 30 per cent by end 2019. “Adnoc Drilling has the biggest fleet of rigs in the region and has a great track record in terms of performance. We bring the latest technology, and the experience of drilling complicated wells,” Khattab added.
On oil prices, Khattab said: “If the price is too high, then it might not be good for the business. What operators are looking is that it (oil price) stays at a reasonably good level and stays stable. If it stays in the $80s (per barrel), operators will be happy.”
He said Baker Hughes is well positioned due to its unique portfolio in downstream, mid-stream and upstream segments. And with market growth, it’s going to have a significant share of the growth moving forward.