GE CEO on Baker Hughes purchase: right time to invest

With its purchase of oilfield services firm Baker Hughes, GE will now be present in the Bakken from molecule to megawatt.
By The Bakken Magazine Staff | December 20, 2016

With its purchase of oilfield services firm Baker Hughes, GE will now be present in the Bakken from molecule to megawatt. At a time when other companies are pulling back during a downturn in the oil and gas industry, Jeff Immelt, CEO of GE, said his company likes to position itself for growth. “This is the right time in the cycle to invest,” Immelt said of the Baker Hughes acquisition. 

Through the deal, GE will own 62.5 percent of the new company that will remain operating as Baker Hughes. GE also agreed to pay $7.4 billion to existing Baker Hughes shareholders. Lorenzo Simonelli, current CEO of GE Oil & Gas, will maintain his position in the newly formed company. Martin Craighead, current president and CEO of Baker Hughes, will now be the vice chairman of Baker Hughes’ board of directors. 

The deal is one of several GE Oil & Gas has made to strengthen its position in the industry during the past three years. In 2013, GE purchased artificial lift provider Lufkin. Earlier this year, GE Oil & Gas opened a research and technology development center in Oklahoma City. 

Both Immelt and Simonelli can see instant benefits to the oil sector related to the Baker Hughes transaction. “An oilfield service platform is essential to deliver digitally enabled offerings to our customers,” Immelt said. Predix, a digital predictive and analysis software tool developed by GE can be used in the field, he said. 

Simonelli believes GE can bring its battery technology to the oilfield through Baker Hughes. The technology, he said, can help downhole operations be drilled and completed faster. The deal should be completed in mid-2017. Baker Hughes has Bakken offices in the North Dakota communities of Williston, Dickinson and Minot.