• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 14 hours OPEC will consider all options. What options do they have ?
  • 8 hours Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 12 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 3 hours What to tell my students
  • 3 hours Not The Onion: Vivienne Westwood Says Greta Thunberg Should Run the World
  • 11 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 8 hours A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 22 hours Recession Jitters Are Rising. Is There Reason To Worry?
  • 18 hours With Global Warming Greenland is Prime Real Estate
  • 16 hours China Threatens to Withhold Rare Earth Metals
  • 1 day TRUMP'S FORMER 'CHRISTIAN LIAISON' SAYS DEEPWATER HORIZON DISASTER WAS GOD'S PUNISHMENT FOR OBAMA ISRAEL DIVISION
  • 1 day Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents, building nukes * Too late now
  • 1 day CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"

Baker Hughes Loses Petrobras Contracts to Halliburton, Forced to Cut Workforce

Baker Hughes, the world’s third largest oilfield services provider, has had to cut its Brazilian workforce after losing vital contracts with Petroleo Brasileiro (Petrobras) to its fierce competitor Halliburton Co.

Jose Rangel, the head of the Sindipetro Norte Fluminense oil workers union, told Bloomberg that about 150 workers in the past two months have lost their jobs and that the company has announced plans to fire 150 more in the near future.

The state owned Petrobras, which controls about 92% of all Brazilian oil production, has been on a mission to reduce its costs since Maria das Gracas Foster was appointed as the new Chief Executive Officer. This means that oilfield service companies are offered far smaller contracts with smaller margins. Halliburton has also had to reduce its workforce by about 100 people, despite winning the new contracts.

Related article: Trans-Adriatic Pipeline Takes Step Forward

Brad Handler, an analyst at Jefferies Group LLC, spoke to Bloomberg via telephone to explain that “Baker Hughes has repositioned assets and staff out of Brazil after losing market share to Halliburton. Halliburton ramped up its capabilities in anticipation of performing more work, but is now seeking to trim these after volumes are less than expected.”

Baker Hughes’ share of the Brazilian offshore oilfield market has fallen to around 20% from 50%, whilst Halliburton has managed to grow their share to 50%. Despite Halliburton’s increased market share, the overall market size has fallen, as Petrobras has experienced much higher flow rates from its wells, leading it to reduce the number of wells to be drilled.

Jeff Miller, the Chief Operating Officer at Halliburton, said that “in Brazil, we’ve seen a significant reduction in drilling activity over the course of the year with a shift in focus. We’re working with our customer to right-size our operational footprint, but we expect reduced activity levels to extend through the fourth quarter and continue into the next year.”

The fact that Petrobras is the dominant producer in Brazil, means that service companies have little defence against any changes it makes in its spending. The decision to offer lower margins in contracts is not one that service companies can avoid by agreeing deals with other oil companies, as there are no others in the market.

By. Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play