Page 11 - FSUOGM Week 31 2022

FSUOGM PROJECTS & COMPANIES FSUOGM

Baker Hughes to sell to Russian

local management

RUSSIA THE US oilfield servicing major company Baker Rosneft and Gazprom Neft.
Hughes will sell its Russian business to local As covered by bne IntelliNews, in June the
Halliburton has also management and significantly reduce the scale company stopped servicing LNG projects,
said it will cease of its operations in the country, according to recalled service engineers from Gazprom's
operations in the Kommersant daily. Sakhalin-2 and Novatek’s Yamal LNG projects,
country. As followed by bne IntelliNews, in March as well as project engineers from Novatek's Arc-
2022 Baker Hughes, Weatherford International tic LNG-2, which is under construction.
and Schlumberger announced they were scrap- The decision of Baker Hughes parallels
ping all new investment in Russia following one taken by Halliburton in May, when it also
the fourth sanctions package of the EU, which sold its local business to its Russian manage-
banned investment in the energy sector in ment team, BCS Global Markets reminds on
response to Russia’s military invasion of Ukraine. August 2. Both companies each had circa 2%
Halliburton, another major oilfield service of the Russian oilfield services (OFS) market.
provider (OSP), has also said it will cease opera- “By leaving domestic equipment behind
tions in the country. and selling to its existing managers, the inter-
Reportedly, the Russian management of ruption in the Russian oilfield is minimised,”
Baker Hughes will acquire the drilling business, BCS GM analysts commented.
while the supplies of equipment and technology The analysts believe that the main loss
operations will be shut down and the employees to the Russian oil & gas industry from the
working there will be laid off. departure of these companies will not be via
"We have not disclosed details of the compo- everyday activities such as drilling and gen-
sition of the new management team, but we can eral hydrofracking services, even if they will
confirm that it includes members of the current have to source expendable equipment and
management of the oil services business in Rus- spare parts either locally or from ‘friendly
sia," Baker Hughes told Kommersant. countries’.
Previously in May the daily reported that However, in the longer term, the pullout
Halliburton, another US oil services company, of foreign oil servicing majors will result in a
had also chosen the option of selling the business refocusing of effort into more standard fields
in Russia to management. and horizons for which existing Russian tech-
Baker Hughes notified its counterparties as nology – which is more advanced than gener-
of May 15, 2022 that it had terminated contracts ally understood – is an economically viable
with Russian state-owned companies such as solution, BCS GM warns. ™

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