Well intervention services are essential services used by oil and
gas operators to manage well production, provide well diagnostics
and modify a well’s state or configuration. Both Baker Hughes and
Altus supply various well intervention services in the UK,
including to operators active on the UK continental shelf.
The Competition and Market Authority’s (CMA) Phase 1
investigation has found that Baker Hughes and Altus are the two
largest providers of both coiled tubing and pumping services in
the UK and compete very closely in the supply of these services
currently. After the deal, Baker Hughes would face competition
from only one other major supplier – Halliburton – and a small
number of other suppliers that are much weaker competitors in the
UK.
The CMA is therefore concerned that the loss of rivalry between
the merging companies could lead to higher prices, reduced choice
and lower quality services for businesses in the UK that purchase
coiled tubing and pumping services.
Colin Raftery, Senior Director of Mergers at the CMA, said:
Well intervention services are an integral part of managing oil
and gas wells. Competition is vital to avoid higher prices or
poorer quality of services for oil and gas operators active in
the UK.
Our investigation showed that Baker Hughes’ purchase of Altus
would take out an important supplier and few remaining
competitors would be left in the market. We will move to an
in-depth investigation unless the companies can address our
concerns.
Baker Hughes and Altus have 5 working days to submit proposals to
address the CMA’s competition concerns. The CMA would then have a
further 5 working days to consider whether to accept these in
principle instead of referring the case to a Phase 2
investigation.
For more information, visit the Baker Hughes/ Oz MidCo
(Altus) investigation page.
Notes to Editors
-
‘Baker Hughes’ refers to Baker Hughes Nederland Holdings B.V.
and ‘Altus’, or ‘Oz MidCo’, refer to Oz MidCo AS (Altus
Intervention).
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UK refers to the UK part of the North Sea and UK onshore.
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Coiled tubing (CT) refers to a conveyance method which uses a
continuous length of small diameter flexible pipe to
transport fluids, tools, chemicals or gases down a well.
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Pumping refers to the delivery of gases or liquids from the
surface into the well. It can be provided as ancillary
services to CT or as a standalone service.
