American energy giant General Electric is hoping to double its oil-services business to $15 billion over the next four years, moving into like the market for pumps, compressors and subsea equipment. For a company so used to being among the top two in its field, GE will not just be hoping to enter into these new areas but to dominate them. However, this will not be made easy. For the time being GE are only medium-fry in the oil sector are up against formidable competitors in industry leaders like Schlumberger Ltd. and Baker Hughes Inc., are rapidly consolidating, signing multi-billion-dollar acquisition deals to gain scale and land large contracts.
Unable to compete in the wider oil and gas market, GE Oil & Gas are planning to focus efforts on niche products and markets in which its biggest rivals have less interest. According to the company website, GE Oil & Gas can provide equipment and services "across all segments of the global oil and gas industry." As of yet GE have not done enough to make any serious ground in the industry, and over the last 15 years have only made a number of small acquisitions that focus on very low-key, specific specialities such as drilling equipment and compressors.
But that's not to say that progress hasn't been made. On March 3 this year it was announced that Chevron awarded a contract to GE Oil & Gas technology to support the Gorgon field development. GE will supply five 130 MW Frame-9 gas turbines for the Barrow Island gas treatment and liquefaction facilities, in a deal woth USD$1.5 billion. GE will supply Chevron with approximately 10,000 tons (9,072 metric tons) of equipment to produce gas from the offshore Gorgon and Jansz fields including, twenty subsea trees, twenty subsea wellheads, production controls systems and Pipeline termination systems.
But analysts insist that until GE make some more hefty acquisitions, they will not be able become a major player in the industry. "They have pieces on a few squares, but they haven't really figured out what the jigsaw puzzle looks like," says Geoff Kieburtz, a senior energy analyst at Weeden & Co in Greenwich, Conn. He and other analysts say GE Oil & Gas needs to get bigger and develop a clearer strategy if it hopes to keep up with its larger competitors, as detailed by the Wall Street Journal. "Our aspiration is to continue to develop technology overlaps between the businesses we have," says Joe Mastrangelo, a vice president of the unit.