Baku, Azerbaijan, May 3
By Maksim Tsurkov - Trend:
Refusal of the US oilfield services providers Halliburton and Baker Hughes from the merger makes further negotiations on the sale of their assets to the company General Electric Oil & Gas (GE Oil & Gas) in Azerbaijan meaningless, a source on the country's oil and gas market told Trend.
GE Oil & Gas claimed for the purchase of Halliburton's Sperry Drilling, the source added.
"It was assumed that in case of merger of the two companies, Inteq (asset of Baker Hughes) would become the primary drilling unit, and Sperry Drilling, a segment of Halliburton, would be sold to a third company with the GE Oil & Gas being the main contender," said the source. "Now that the deal failed, further negotiations are meaningless, the parties will keep their assets."
Halliburton will pay Baker Hughes a $3.5 billion breakup fee as a result of the deal falling apart, said the source.
Following the merger of Halliburton and Baker Hughes in 2014, it was decided to sell a part of services and equipment, including the ones in Azerbaijan.
The oil and gas division of General Electric [GE Oil & Gas] got interested in the acquisition of these assets in Azerbaijan, in particular, such equipment as liner hangers and service work. Negotiations between the parties were already suspended, but then were resumed.
Last week, Baker Hughes reported a bigger-than-expected first-quarter loss and warned that the rig count globally would drop steadily through the end of the year because of fewer new projects.
Halliburton said last month it cut more than 6,000 jobs in the first quarter as revenue slumped 40.4 percent and it took a $2.1 billion restructuring charge mainly for severance costs and asset write-offs.
---
Follow the author on Twitter: @MaksimTsurkov
