GE company Baker Hughes (BHGE) will acquire a 5 percent stake in ADNOC Drilling worth $550 million, valuing the Abu Dhabi unit at $11 billion, the two companies announced on Monday.
In a statement, BHGE and the Abu Dhabi National Oil Company (ADNOC) said that the move will “enable and support the growth and development of ADNOC Drilling into a fully integrated drilling and well construction provider”.
The partnership is expected to see ADNOC grow its drilling activity by 40 percent by 2025 and significantly ramp up its number of unconventional wells as it seeks to capture as much as 30 percent of the drilling and completion market over the next three years.
“ADNOC and BHGE will deliver more competitive well completion times, greater drilling efficiencies and better well economics and will capitalise on new business opportunities as ADNOC drilling grows through its expanded offering,” the statement said.
ADNOC believes the partnership will generate long-term revenue streams and growth for both companies through a “mutually beneficial, attractive commercial structure, pre-defined work plans and future dividends.”
“We chose BHGE after a rigorous and competitive process as a partner with whom we have a long-stranding working relationship and who shares ADNOC’s long-term vision and values,” said Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO.
“This unique partnership with BHE comes at an important time in the drilling needs of Abu Dhabi as ADNOC grows its conventional and unconventional hydrocarbon resources and as we see future potential for further regional growth.”
BHGE chairman and CEO Lorenzo Simonelli, for his part, said that the partnership allows BHGE to “to drive predictable revenue streams and long-term growth for both companies and lets us invest in a stable, reliable and secure market environment.”
“The transaction significantly increases our activity in the region and demonstrates our unique ability to create value for our customers and shareholders through innovative commercial arrangements, partnerships and leading technology solutions,” he added.
Currently, BHGE employs more than 1,000 employees in the UAE.
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