GE to boost presence in energy with Lufkin buy
Source: Agencies |
April 9, 2013, Tuesday
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Print Edition
Print Edition
GENERAL Electric Co said it will buy oilfield services provider Lufkin Industries Inc for about US$2.98 billion to boost its presence in the energy business.
GE, the world's biggest maker of jet engines and electric turbines, has expanded in the energy industry with a series of acquisitions of companies that make equipment used in oil and gas production, while divesting assets in finance and media industries.
The company has spent about US$11 billion in acquisitions since 2007 to boost its presence in the oil and gas business, which is the conglomerate's fastest-growing and which contributes about 10 percent of its total revenue.
Lufkin will broaden GE's artificial lift capabilities beyond electric submersible pumps.
Artificial lift refers to the use of external means to help lift hydrocarbons to the surface in reservoirs with low pressure, as well as to improve the efficiency of naturally flowing wells.
"The artificial lift segment is at the heart of critical changes that are helping producers maximize well potential, which translates into increased output at lower operational cost," Daniel C. Heintzelman, CEO of GE Oil & Gas, said.
The global artificial lift sector is expected to approach US$13 billion in 2013, according to Spears & Associates, GE said.
Lufkin's fourth-quarter profit beat analysts' estimates on demand for its pumping equipment.
GE, the world's biggest maker of jet engines and electric turbines, has expanded in the energy industry with a series of acquisitions of companies that make equipment used in oil and gas production, while divesting assets in finance and media industries.
The company has spent about US$11 billion in acquisitions since 2007 to boost its presence in the oil and gas business, which is the conglomerate's fastest-growing and which contributes about 10 percent of its total revenue.
Lufkin will broaden GE's artificial lift capabilities beyond electric submersible pumps.
Artificial lift refers to the use of external means to help lift hydrocarbons to the surface in reservoirs with low pressure, as well as to improve the efficiency of naturally flowing wells.
"The artificial lift segment is at the heart of critical changes that are helping producers maximize well potential, which translates into increased output at lower operational cost," Daniel C. Heintzelman, CEO of GE Oil & Gas, said.
The global artificial lift sector is expected to approach US$13 billion in 2013, according to Spears & Associates, GE said.
Lufkin's fourth-quarter profit beat analysts' estimates on demand for its pumping equipment.
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