Baker Hughes teams up with Goldman Sachs and others to create a hydraulic fracturing unit with a focus on North America. Photo by photostock77/Shutterstock
HOUSTON, Nov. 30 (UPI) -- Oilfield services company Baker Hughes said it formed a business venture with Goldman Sachs and others that would focus on North American hydraulic fracturing.
Baker Hughes will own a 46.7 percent stake in an entity created with CSL Capital Management and Goldman Sachs that includes services tied to hydraulic fracturing operations in the United States and Canada. The new company will operate under the brand of BJ Services with headquarters in Tomball, Texas.
Martin Craighead, the chairman and CEO of Baker Hughes, said the new business unit will tighten the focus on the North American market while at the same time easing financial constraints.
"In line with our asset-light strategy, this ownership model enables Baker Hughes to participate in the North American land pressure pumping market, while reducing capital intensity and maximizing shareholder value," he said in a statement.
The company, which was the target of a takeover bid by rival Halliburton at the depth of the market downturn early this year, said it took a $429 million net loss for the third quarter. That followed steep reductions in staffing, but marked an improvement over the $911 million loss during the previous quarter.
Craighead said project delays and a reduction in activity in the Gulf of Mexico, West Africa and Norwegian operations were to blame for much of the declines for the third quarter.
The arrangement with Goldman and CSL Capital Management comes one month after GE Oil & Gas took a 62.5 percent stake in Baker Hughes for an entity with combined revenue of $32 billion.
Baker Hughes after the agreement touted itself as a "new" company, while GE avoided the costs of a full acquisition.