Baker Hughes (NASDAQ: BKR) and Dussur, owned by the Saudi Arabian Public Investment Fund (PIF), Saudi Aramco and SABIC (Saudi Basic Industries Corporation), have signed an agreement to form a joint venture company (JV) focused on providing oilfield and industrial chemicals in the Kingdom of Saudi Arabia (KSA).
The JV supports Baker Hughes’ efforts to better serve the chemical market in the region and includes the company’s existing chemical blend plant in Dammam and manufacturing facility in Jubail. The JV brings Baker Hughes closer to customers and suppliers, creating efficiencies including lower operating expenses and locally sourced raw materials.
Dussur is a local, strategic partner with regional affiliates to increase efficiencies, enable greater access and generate faster delivery times for customers
“This partnership is directly aligned to our broader strategy to invest for growth and leverage our existing strengths while exploring new business models to better serve our customers and the regions in which we operate,” said Maria Claudia Borras, Executive Vice President of oilfield services at Baker Hughes. “Baker Hughes and Dussur share a commitment to exceeding customers’ expectations, making this JV a natural fit and one that we are proud to announce today.”
As part of the JV, Baker Hughes’ manufacturing facility in Jubailwill directly support chemicals focused on the needs of KSA while expanding localization opportunities. The JV includes increasing Saudi Arabia’s supply base targets of raw materials and accelerates the development of manufacturing skills and capabilities of the local workforce.
Localization opportunities to increase local raw materials and support local workforce development
“Baker Hughes’ expertise and technology leadership made them the ideal partner in this joint venture,” said Dr Raed Al-Rayes, CEO, Dussur. “Expanding the role of oilfield chemicals manufacturing in Saudi Arabia is an important link to Dussur’s mission to support the Kingdom’s industrialization journey and localize technologies that will introduce new value chain capabilities. We are looking forward to commencing our work with Baker Hughes to contribute to the security of supply in the region and build local capabilities for the jobs of the future.”
Baker Hughes will contribute its existing infrastructure, personnel, and contracts within KSA related to oilfield and industrial chemicals under the terms of the agreement. Baker Hughes will own 51% of the JV, and Dussur will own 49%. Upon close, the JV will continue to operate under the Baker Hughes brand and Baker Hughes will exclusively participate in the KSA chemicals market through the JV. The transaction is expected to close in the third quarter of this year.