On GE, Baker Hughes says it's too early to say

GE's oil and gas division said to be exploring a partnership with oilfield services company.

By Daniel J. Graeber

Baker Hughes tight-lipped on reports of partnership talks with General Electric. Photo by Calin Tatu/Shutterstock

 

Baker Hughes said Friday it was too early to offer a comment on rumors of a possible partnership offer from General Electric, the second such effort this year.

A spokesperson for Baker Hughes declined a comment on questions about the offer from GE, but said formal announcements would be made in due course. GE so far has not responded to questions from UPI about the offer.

After it initially reported a full takeover offer was on the table, a spokesperson for GE told The Wall Street Journal that nothing was concrete, though discussions were underway on "potential partnerships."

None of the options under consideration, the GE representative added, included an "outright purchase" of Baker Hughes.

Baker Hughes is one of the largest companies provided services to the exploration and production side of the energy sector. This quarter, it took a $429 million net loss. That follows steep reductions in staffing, but marks an improvement over the $911 million loss during the previous quarter.

Schlumberger, the world's largest oilfield services company, said last week the oil market is in balance and recovery is on the way.

GE's oil and gas business, meanwhile, has built up its position through acquisitions so that it's now one of the stronger divisions within the parent company. Sales for the GE oil and gas unit, however, were down about 25 percent for the third quarter.

In early October, GE Oil & Gas President and CEO Lorenzo Simonelli said "it's no secret the industry has been working through a tough market environment."

Baker Hughes this year unveiled three organizational changes aimed at simplifying its business, reducing costs and bolstering its product sales and customer service efforts. It said it consolidated its regional operations structure into one global entity that will deliver "strong operating profits."

Halliburton and Baker Hughes unveiled plans to join forces in late 2014 as lower crude oil prices started to spill over into the economics of the upstream, or exploration and production, side of the energy sector.

The U.S. Justice Department in early April said the proposed merger of the two companies would be unprecedented in its "scope of competitive overlaps and antitrust issues."