Baker Hughes Said to Hold Talks With Abu Dhabi on Drilling Stake
(Bloomberg) -- Baker Hughes, a GE Co., is in talks with Abu Dhabi National Oil Co. to set up a partnership that could lead to the U.S. firm taking a minority stake in the state-owned energy giant’s drilling unit, according to people with knowledge of the matter.
Adnoc is working with boutique advisory firm Moelis & Co. and is also in discussions with other companies about potential alliances, the people said, asking not to be identified as the information is private. No final decisions have been made and the discussions may not result in an agreement, they said.
Representatives for Moelis and Baker Hughes declined to comment. A spokesman for Adnoc said the company has expanded its strategic partnership model and is exploring multiple opportunities, though he declined to comment on these specific talks. The firm will provide an update in due course, he said.
A deal would allow Baker Hughes, which combined operations with the oil and gas unit of General Electric Co. in July, to expand in the Middle East. Adnoc, meanwhile, is revamping its operations as Abu Dhabi, holder of about 6 percent of the world’s crude, tries to forge an economy that’s less dependent on oil. The transformation has so far included the public listing of its distribution unit and management changes.
Adnoc’s drilling unit, established in 1972, is the largest in the Middle East and operates a fleet of more than 90 rigs, according to its website. It also provides drilling and different services to Adnoc’s other divisions.
Separately, Adnoc plans to invest $45 billion over five years to expand its Ruwais refining and petrochemicals complex’s capacity by more than 65 percent by 2025, Chief Executive Officer Sultan Al Jaber said on Sunday. The oil giant is also looking into acquiring a stake -- alongside Saudi Aramco -- in an Indian refinery, Al Jaber said in an interview with Bloomberg Television in Abu Dhabi.
Last month, Adnoc hired Philippe Khoury, formerly an energy banker at HSBC Holdings Plc, to head up its new unit for trading crude oil and refined products. It also appointed Mark Cutis, a former sovereign wealth fund executive in the emirate, as chief financial officer, people with knowledge of the matter said last week.
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