Baker Hughes 2007 Annual Report Download - page 9

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Drilling and Evaluation revenues were up 14% in 2007 compared to
2006, and operating profits were 12% higher as pre-tax operating
margins averaged 26% for the year. Highest growth was achieved
by the directional drilling, logging-while-drilling and wireline
logging product lines.
PENETREX™ mud systems, and Hughes
Christensen’s Genesis™ ZX technology PDC
drill bits.
Finally, INTEQ helped Exxon Neftegas Lim-
ited drill the world’s longest Extended Reach
Drilling (ERD) well from Sakhalin Island, using
the AutoTrak system and a full range of log-
ging-while-drilling services to reach a total
depth of 37,014 feet. In early 2008, INTEQ
helped ExxonMobil break this record with an
extended reach well of 38,322 feet, and
Baker Oil Tools installed a record-length liner
to complete the well.
Baker Hughes also made gains in Africa
during 2007, with significant growth in Alge-
ria, Libya, Equatorial Guinea and Angola. In
Algeria, INTEQ gained a six-rig integrated ser-
vice contract to provide well engineering, as
well as tools and services in a new gas field in
the southwestern region of Algeria. In Libya,
Baker Hughes gained market share by provid-
ing products and services to serve the emerg-
ing exploration market while helping Libyan
oil companies maximize production from
mature fields. In Equatorial Guinea, Baker Oil
Tools performed more than 50 frac pack well
completions using its Modular Stimulation
Vessel technology.
In Angola, Baker Hughes Drilling Fluids
scored a significant success by providing
MICRO-WASH™ remediation fluid to signfi-
cantly restore productivity from two deep-
water wells where oil based drilling fluids had
impeded flow from the reservoir. This technol-
ogy has strong prospects for 2008 as its use
in additional wells is planned in West Africa
and the Middle East.
Middle East, Asia Pacific
Baker Hughes‘ revenues in the Middle
East, Asia Pacific (MEAP) region increased
17% during the year, reaching $2,015 mil-
lion, up from $1,729 million in 2006. This
growth was paced by activity in Saudi Arabia,
Qatar, China, India and Malaysia.
We are excited about opportunities to
expand our business in the Middle East, and
our focus on this market showed positive
results in 2007.
Saudi Arabia has been leading growth for
Baker Hughes in the Middle East, with activity
increasing rapidly and revenue nearly tripling
since 2005. Baker Hughes technology has
enabled Saudi Aramco to pursue an aggres-
sive strategy of applying horizontal wells to
achieve “maximum reservoir contact” and
maximize production from new and existing
fields. Our drill bit technology, rotary steerable
systems, logging-while-drilling, remote oper-
ations centers and high performance fluid
systems have been applied on up to 30 rigs
simultaneously in the Kingdom.
Baker Oil Tools has applied a wide range
of completion equipment in Saudi Arabia,
including Intelligent Well Systems in multilat-
eral wells and high-pressure, high-temperature
completion strings for deep gas wells. Our
EQUALIZER™ inflow control device for horizon-
tal wells has been installed in nearly 200 miles
of horizontal hole in the country, helping max-
imize oil recovery and limit water production.
In Qatar, revenues increased 58% from
2006, as Baker Hughes applied drilling, for-
mation evaluation and completion technolo-
gies to help develop the country’s significant
natural gas reserves.
In China, Baker Hughes provided technol-
ogy and service for extended reach drilling
and sand control completions for both inter-
national and national oil companies offshore
in Bohai Bay and the South China Sea. Suc-
cess on these ongoing projects helped Baker
Hughes gain work onshore for a national
oil company. Excellent performance in geo-
steering a horizontal well in the Jidong field
helped establish an agreement to provide
ongoing services in the area. INTEQ also
introduced its VertiTrak™ vertical drilling sys-
tem to drill difficult formations onshore China.
Baker Hughes‘ business in India increased
29% in 2007 compared to 2006, as our oper-
ations serviced ONGC, Reliance and other
operators in deepwater markets.
In Malaysia, revenues climbed 86% from
2006 as we provided drilling fluids to deep-
water rigs, INTEQ began a 50-well directional
drilling project for Talisman Malaysia, Baker
Atlas delivered high-end logging services, and
Latin America Revenues
2005–2007, by Quarter
(In millions)
$300
$250
$200
$150
$100
$50
$0
2005 2006 2007
2007 Annual Report 5