Global Oil & Gas: Baker Hughes merger aims to reduce oil production costs


Chief Executive Officer, sub-Saharan Africa, Bakers Hughes, a GE Company (BHGE), Mr. Ado Oseragbaje

The Chief Executive Officer, sub-Saharan Africa, Bakers Hughes, a GE Company (BHGE), Mr. Ado Oseragbaje has stated that the merger of Bakers Hughes and GE Oil and Gas would provide the technology that would reduce the cost of crude oil production in Nigeria.


Speaking to journalists on the activities of his company, which was created out of the merger, Oseragbaje said cost could only be reduced by cost cutting or using more efficient technology.

“If you talk to our customers; if you talk to the regulators; if you talk to our partners; there is a tremendous excitement right from the moment that we announced this merger in October 2016. There has been a tremendous excitement about it all the way till today simply because the industry can see a lot of benefits and can also see how those efficiencies can translate directly to cost benefits.

The other thing that you know is that to reduce your cost, there are two ways to do it. It is either you cut the cost itself or you are more efficient with the same cost. If you look at it in terms of an oil and gas company and what is happening, what it means is that they produce more with the same cost.

There are several ways that they can do that. It is either the equipment is more reliable or the predictability of the reservoir and the producibility of the reservoir improve. So, when you start to look at some of the things that we would launch into the market, particularly as well around the digital offerings, one of the things is again unique to GE is our offering around the digital trend,” he explained.

He disclosed that GE would deploy the technology that would make machines more efficient, more predictable and more intelligent across the entire chain to the reservoir.

Oseragbaje, who also explained the merger between the two entities, further stated that the “idea behind BHGE is borne out of a long term strategy of GE looking at how technology can make an impact to the industrial sector”.

“So, GE Oil and Gas started about 22 years ago through a series of acquisitions and the whole idea from that is how could we use technology to improve productivity in the industrial space? Really, as GE, we initially came from that standpoint – looking at technology and its application on industry. As things progressed, we got a better understanding of the industry and we felt that our portfolio is incomplete because we did not have big footprint in the upstream services. That is the backdrop from GE’s standpoint,” he explained.

According to him, GE did not have meaningful foot print in well construction and certain other areas in the exploration and production (E & P) segment.

“So, we started thinking of how to do it. We were trying to find a company that had similar values to GE Oil and Gas. If you look at Baker Hughes, a lot of fundamental core values of Baker Hughes is very similar to GE Oil and Gas. What do I mean by that? There is a tremendous commitment to health and safety; there is a tremendous commitment to integrity; there is a passion for technology and the application of technology. In fact, if you look at the heritage of Baker, it is very similar to the heritage of GE Oil and Gas.,” he said.

“When you look at the compatibility of the two companies not just in terms of technology but actually, culture compatibility, then it was a natural fit. Now, what are we trying to do? We are trying to do something that is completely unique,” he added.

Oseragbaje argued that with the merger, no other company on earth from service or technology provider standpoint has the same footprint in the upstream, midstream and downstream like the new GE company.

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