Baker Hughes 2009 Annual Report Download - page 7

Our new geographical model gives Baker Hughes
tremendous opportunities to drive standardized
and rationalized processes and to improve our
operational efficiencies in supply chain and
manufacturing activities.
central research and development with com-
mercial applications. In 2010, we will begin
construction of two regional technology cen-
ters located in Brazil and Saudi Arabia. These
centers will focus on commercialization of
technical solutions which span our portfolio
and address the specific challenges faced
by our customers in Latin America and the
Middle East. The global marketing team
bridges the geographic and product line
organizations to develop and deliver market
strategies and the reliability team is respon-
sible for quality in manufacturing and for
reliable execution in the field.
BJ Services Merger
In addition to building our reservoir cap-
abilities throughout 2009, we announced a
proposed merger with BJ Services Company.
This transaction will bring pressure pumping
and stimulation capabilities to the company,
in addition to a number of other comple-
mentary technologies.
BJ Services’ capabilities in cementing,
coiled tubing, hydraulic fracturing and off-
shore pressure pumping will advance Baker
Hughes’ competitive position in all of our
strategic market segments, particularly in
unconventional gas and deepwater projects,
which have the highest potential for growth
in the next decade.
Pressure pumping is an important com-
ponent of many integrated operations proj-
ects, and we have partnered with BJ Services
on such projects in the past. With the com-
bination of Baker Hughes and BJ Services,
we can compete on an equal footing with
companies that already have this capability.
Pressure pumping is also a key service in
deepwater projects, which require fracturing,
cementing and gravel packing services, and
combining capabilities with BJ Services will
make Baker Hughes a leader in this area.
BJ Services also is a leader in shale frac-
turing technology and services in North
America, and has operating bases in most of
the key shale basins. Significant opportunities
exist for Baker Hughes and BJ Services to
integrate their respective technologies.
Compliance
Over the past several years, our employ-
ees have undertaken a broad range of com-
pliance initiatives that focus on our Core
Values of Integrity, Teamwork, Performance
and Learning. These initiatives are at the
heart of how we work every day, and I
commend and thank all employees for their
efforts in this regard.
While compliance remains every employ-
ee’s responsibility, we have established a
professional Ethics and Compliance group
within our legal department to guide and
implement our compliance program under
the direction of the Audit & Ethics commit-
tee of the Board of Directors, our General
Counsel and our Chief Compliance Officer.
Opportunities and Outlook
Looking forward, Baker Hughes will
focus on a number of areas which provide
opportunities for long-term growth, includ-
ing relationships with national oil compa-
nies, development of unconventional gas
reservoirs, and deepwater exploration
and production.
National oil companies control more than
eighty percent of the world’s hydrocarbon
reserves and each national oil company has
unique requirements. Our geomarket organ-
ization allows us to tailor our product and
technology capabilities and local content
programs to meet each national oil com-
pany’s needs.
Within North America, the unconven-
tional gas fields present the greatest oppor-
tunity for oilfield service companies. With the
pending addition of BJ Services, Baker Hughes
can compete with a full breadth of products
and services for each of these opportunities.
In 2009, in anticipation of a burgeoning
deepwater exploration and production mar-
ket, we formed a geomarket organization
specifically focused on Gulf of Mexico cus-
tomers. In addition, we increased our pres-
ence in Brazil by investing in new facilities,
adding to our local workforce and signing
a technology agreement with Petrobras.
We also expanded our operations in West
Africa, adding new facilities in Angola and
Nigeria. We are well positioned to increase
our share of products, technology and ser-
vices for this critical market.
By locating senior management within the geomarkets, decision-making
authority is closer to our customers and decisions can be made at
“customer speed”.
2009 Annual Report 5