The JV will club Baker Hughes’ subsea drilling systems business and Akastor’s subsidiary MHWirth
Baker Hughes will form a joint venture (JV) company with Norwegian oil-services investment company Akastor for providing offshore drilling solutions across the world.
The JV will bring together the subsea drilling systems (SDS) business of Baker Hughes and MHWirth, a fully-owned subsidiary of Akastor.
As per the terms of the deal, Akastor will contribute its shares in MHWirth to the JV for 50% ownership and $120m in consideration.
Baker Hughes will contribute the SDS business to the JV for a 50% stake and $200m in consideration.
MHWirth is a provider of drilling solutions and services.
On the other hand, the SDS business of Baker Hughes is a unit of its oilfield equipment segment. Based in Houston, SDS offers integrated drilling products and services.
With a footprint across 11 countries, SDS’ portfolio includes blowout preventor (BOP) systems, controls, and riser equipment.
The JV company will cater to customers with a full-service offshore drilling equipment offering that will comprise a portfolio of products and services.
Akastor CEO Karl Erik Kjelstad said: “I would like to express sincere gratitude to the good work and dedication shown by the respective teams of Baker Hughes and Akastor for making this happen despite the current challenges caused by the global COVID-19 pandemic.
“I strongly believe that this Company will give a solid basis for both organizations to meet the current challenges in today’s market and to continue as a leader in developing advanced and efficient drilling solutions that support the industry’s transition towards more sustainable operations.”
Operations of the JV will be managed from existing offices in Houston, Texas, and Kristiansand in Norway.
The JV will also have the capability to take part in the shift of the oil and gas industry towards more energy-efficient solutions. Besides, it will engage in deploying technologies and service solutions for boosting the competitiveness of the industry by enhanced drilling efficiency.
Baker Hughes oilfield equipment executive vice president Neil Saunders said: “The oil and gas industry is rapidly evolving, and we are constantly looking at new and innovative ways of delivering value to our customers.
“This Company is the perfect fit between our respective portfolios and further transforms our core operations for long-term success, bringing complementary solutions to market and offering our customers a full offshore drilling equipment package.”
The deal, which is subject to regulatory approvals and customary conditions, is expected to close in the latter half of this year.