Baker Hughes aims at costs after profit warning
NEW ORLEANS, March 27
NEW ORLEANS, March 27 (Reuters) - Oilfield services company Baker Hughes Inc is cracking down on internal costs after supply chain struggles and the disruptions of shifting to oil from natural gas basins led to a profit warning last week.
Martin Craighead, who took over as chief executive at the start of the year, expressed disappointment with the North American business as he tries to shape up its pressure pumping arm, which performs hydraulic fracturing jobs in shale wells.
"We're also looking hard at internal costs," Craighead told the Howard Weil Energy Conference in New Orleans on Tuesday.
Part of the problem, he said, was a spike in personnel costs over the past few quarters, so the company is reducing activity in places like the Haynesville and Eagle Ford basins in Texas and the Marcellus shale in the U.S. Northeast.
Craighead said he also hoped to "carve out" $100 million to $120 million of savings on the supply side this year, and that the company had all the sand - used to prop open cracks created by hydraulic fracturing - that it needed for the year.
Baker Hughes is the world's third-largest oilfield services company. The big four of the industry - Schlumberger, Halliburton, Baker Hughes and Weatherford - went on a hiring spree in 2011, adding a total of 25,000 workers to their worldwide payrolls.
Shares of Baker Hughes have shed a tenth of their value since the profit warning last Wednesday.
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