(Adds company comment, share price)
OSLO, April 22 Oil services firms Baker Hughes
and Aker Solutions agreed on Tuesday to form
an alliance for their subsea divisions in an attempt to reduce
costs as their customers - oil companies around the world - cut
back on spending.
Their non-incorporated alliance also follows a similar move
by Cameron and Schlumberger, two of the world's
biggest subsea players, which teamed up in 2012 to create
The oil and gas sector has experienced a big rise in costs
over the past decade as energy companies ramped up capital
spending, pushing up costs ranging from labour to equipment.
But now energy firms are having to rein in spending plans
because oil prices have levelled out and the
International Energy Agency expects them to fall in 2014 and
The alliance, to be based in Houston, aims to increase
recovery rates in deepsea fields and work on a subsea processing
plant, an innovative technology that could eventually shift oil
and gas production equipment from platforms to the bottom of the
sea, saving on costs and increasing recovery.
Aker Solutions shares surged on the agreement and were 4.5
percent higher by 1221 GMT, ahead of a 0.5 percent rise in the
European oil and gas index.
The alliance will combine Aker Solutions' strengths in
subsea production and processing systems with Baker Hughes'
expertise in well completions and artificial-lift technology,
the two firms said in a joint statement.
"Deepwater subsea fields have so far been characterised by
low recovery rates, and new discoveries in deeper and more
hostile environments are making these fields even more costly to
develop," Baker Hughes' CEO Martin Craighead said.
"The single-digit recovery rates currently being achieved at
many of these fields don't support a sustainable business
model," he said.
Although the two firms will stay separate, they will work on
joint solutions and may bid for projects jointly.
(Reporting by Balazs Koranyi and Henrik Stolen, editing by
Terje Solsvik and Jane Merriman)