GE and Baker Hughes combine

The Offshore Engineer reports that GE and Baker Hughes are teaming up to form the “new” Baker Hughes, a company that will be led by current GE Oil & Gas CEO Lorenzo Simonelli and have dual headquarters in Houston and London.

The agreement will combine GE’s oil and gas business (GE Oil & Gas) and Baker Hughes, in what the two hope will be a leading equipment, technology and services provider with US$32 billion of combined revenue and operations in more than 120 countries.

The deal has already been unanimously approved by the boards of directors of both companies. At closing, which is expected in mid-2017, Baker Hughes shareholders will receive a special one-time cash dividend of $17.50 per share and 37.5% of the new company, with GE owning the remaining 62.5%. The deal is still subject to approval by Baker Hughes shareholders, regulatory approvals, and other customary closing conditions.

Both GE and Baker Hughes expect to generate “total run-rate synergies” of $1.6 billion by 2020, which has a net present value of $14 billion, that will primarily be driven by cost out, and positioned for growth as the industry rebounds.

“By drawing from GE technology expertise and Baker Hughes capabilities in oilfield services, the new company will provide best-in-class physical and digital technology solutions for customer productivity,” the two companies said in a joint statement.

The new company will combine the digital solutions, manufacturing expertise and technology from GE, in addition to the track record of success Baker Hughes has in the oilfield services sector.

“With combined revenue of over $32 billion, the product portfolio of GE Oil & Gas and Baker Hughes in drilling, completions, production and midstream / downstream equipment and services will create the second largest player in the oilfield equipment and services industry,” according to the statement from the two companies. “Customers should expect sustainable innovation and integration that will deliver valuable outcomes. Both companies have invested even in the downturn and have strong, complementary competitive scope across the industry. From GE’s fullstream oil and gas manufacturing and technology solutions spanning across subsea and drilling, rotating equipment, imaging and sensing, to the Baker Hughes portfolio in drilling and evaluation and completion and production, the combined company will be moving beyond oilfield services and into oil and gas productivity solutions.”

Upon closing, the new Baker Hughes board will consist of nine directors: five of whom, including Chairman Jeff Immelt will be appointed by GE and four, including Vice Chairman Martin Craighead will be appointed by Baker Hughes.

“This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil and gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes,” said Jeff Immelt, GE chairman and CEO. “As we go forward, this transaction accelerates our capability to extend the digital framework to the oil and gas industry. An oilfield service platform is essential to deliver digitally enabled offerings to our customers. We expect Predix to become an industry standard and synonymous with improved customer outcomes.”

“This compelling combination brings together best-in-class oilfield equipment manufacturing and services, and digital technology offerings for the benefit of all customers and stakeholders,” Martin Craighead, Baker Hughes chairman and CEO said. “The combination of our complementary assets will create a platform capable of seamless integration while we enhance our ability to deliver optimized and integrated solutions and increase touch points with our customers.”

“This transformative transaction will create a powerful force in the oil and gas market as we continue to drive long-term value for our customers and shareholders,” Simonelli said. “Both companies’ employees will benefit significantly from being part of a larger, stronger company that is positioned for long-term growth. We look forward to combining the digital solutions and technology from the GE Store with the domain expertise of Baker Hughes and its culture of innovation in the oilfield services sector.”

The full release is available on http://www.businesswire.com/news/home/20161031005488/en/

Total Exploration and Production chooses Emerson maintenance services

Emerson has been selected by Total Exploration and Production Services to provide control and safety system maintenance services that will support Total’s upstream oil and gas operations around the whole world.

The ten-year frame agreement is part of Total’s Integrated Control and Safety Systems standardisation strategy. It is the first of its kind between Total and an automation systems provider and formalises the already robust relationship between the two companies.

Emerson will be responsible for servicing, maintenance, obsolescence planning, on-call application support, spare parts management, and reporting activities relating to integrated control and safety systems used in selected Total onshore and offshore sites. This includes Emerson’s DeltaV distributed control systems and DeltaV SIS safety systems, along with its AMS asset management software.

“This agreement strengthens Emerson’s excellent relationship with Total and enables our services team to support Total in its continuous efforts to optimise the efficiency of their operations and ensure high safety performance,” said Mike Train, president of Emerson’s Automation Solutions business. “We appreciate being trusted to maintain critical automation systems that will help Total continue to run their operations safely and reliably.”

New ultra-miniature downhole transducer

Over the years you might have read about strain gauge based pressure transducers, and wondered why the major pressure transmitter firms never really went down that simple line for submersible gauge or absolute pressure transmitters. In the UK, Druck created a major business from this technology, and were eventually absorbed into GE, which basically ensured they remained a niche supplier. Another specialist, and niche supplier of such transducers, was Paine Electronics in the US. Originally established in 1951, they moved into strain gauge transducers in around 1968. In 2001 the company was acquired from the original owner, Bill Paine, and moved to Washington: but in 2013 it became employee owned, and proud of that fact.

On the original Paine website it still says “We believe our employees should share in the success of our company in a tangible way”, and this is signed off as “Paine Electronics – an employee owned company”. But with 100+ employees the business was still relatively small, even though it supplied pressure transducers to subsea and satellite/space vehicle applications, as well as to the aerospace industry. So the tangible benefit to employees came fairly quickly, with another change of ownership.

At the end of 2014, in November, Emerson acquired “substantially all of the assets of Paine Electronics”. Reporting into the Emerson Rosemount operation, Paine was seen as “Extending their leadership in providing measurement technologies for the oil and gas industry with expanded upstream capabilities in subsea and downhole drilling operations”. This would also complement the business of a previous Emerson acquisition, Roxar, who supply products used on subsea oil & gas operations. But maybe because it is a small operation, only now do we have some follow-up news, in the shape of a new product release from Emerson, describing a new Paine transducer for downhole pressure and temperature measurement. Size is critical in downhole operations, so this transducer, described as ultra-miniature, has an OD of 0.93cms (or 0.37 inches in US units). It is the Paine 310-38-0050, still labelled like that, and was actually launched on the Paine website back in February 2016.

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The Paine 310-38-0050 transducer provides both temperature and pressure measurements in the smallest and most rugged form factor possible. It provides pressure measurements up to 25kpsi (1723 Bar) and withstands and monitors temperatures up to 425F (218C) to cover the wide range of conditions experienced in downhole operating environments, just behind the drill bit. The unit is also built to withstand the corrosive drilling fluids and high vibration levels normal in these applications.

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ABB $90m order for 100MW ‘power from shore’ cable

A new 200-kilometer cable system to be supplied by ABB will deliver 100 MW of electricity from the Norwegian grid to the Johan Sverdrup offshore facility on the Norwegian Continental Shelf.

ABB won this order, worth around $90 million, from leading international energy company Statoil, for a high-voltage cable system to supply power from shore to the Johan Sverdrup offshore oil field. Located 155 kilometres (km) west of Stavanger in the North Sea, Johan Sverdrup is considered one of the largest offshore oil fields on the Norwegian Continental Shelf (NCS). Once fully operational, production is estimated at 550,000 – 650,000 barrels of oil per day, accounting for nearly 40 percent of total oil production from the NCS.

ABB will design, manufacture and install an 80-kilovolt (kV) extruded direct current (DC) cable system with a capacity of 100 megawatts to transmit power from the Norwegian power grid to the Johan Sverdrup offshore production facility. At around 200 km in length, it will be the longest extruded submarine cable system to an offshore oil and gas platform facility in the world. Supplying electric power from shore for offshore oil and gas production avoids the need to burn diesel or gas out at sea to power the equipment and machinery on the platforms, resulting in substantial reductions in CO2 and nitrogen oxide emissions. In addition to the environmental benefits of powering the cluster of platforms from shore, the cable solution is safer and more energy-efficient than generating the power offshore using fossil fuels.

“Delivering enhanced customer value through close customer collaboration is an important element of ABB’s Next Level strategy and we are delighted to be supporting Statoil with this cable system as well as the HVDC converter stations,” said Claudio Facchin, president of ABB’s Power Systems division. ”With this ‘power from shore’ cable solution, ABB will once again be pushing the boundaries of technology and lowering environmental impact, in line with our vision of power and productivity for a better world.”

In March, ABB was awarded an order to supply the two high voltage direct current (HVDC) converter stations for the same project. One will be located onshore at Haugsneset, where it will turn alternating current (AC) from the grid into DC, which can be transmitted efficiently over 200 km to the second station which is on one of the oil platforms. There, the DC current will be converted back into AC and distributed to the rest of the field.

ABB leads the way when it comes to cable systems delivering power-from-shore to both fixed as well as floating platforms. The company’s track record includes Statoil´s Troll A 1&2 with 3&4 currently under commissioning. Other major references include the Gjøa platform which was commissioned in 2010, the Martin Linge platform which will be the world’s longest alternating current (AC) cable from land to an offshore installation and the link to the Goliat power from shore installation in the Norwegian sector of the Barents Sea. ABB also performed the front-end engineering and design for the entire Johan Sverdrup HVDC power-from-shore system.

ABB is a global leader in high-voltage cable systems across applications such as integration of renewables, city centre infeeds, oil and gas platform power supplies and subsea interconnections. ABB has commissioned more than 25 DC and hundreds of AC cable links around the world.