General Electric Makes Another Oil Deal

Dow component General Electric GE said it will acquire the well support business of John Wood Group Plc for $2.8 billion. The business posted revenues of $947 million and EBITDA of $166 million, GE said in a statement. The division, which generated 13% average annual revenue growth over the past decade, is expected by GE to generate $1.1 billion in revenue and approximately $200 million of EBITDA in 2011, according to GE. GE has been looking to bolster its footprint in the oil business amid rising prices. In December, GE said it would acquire U.K.-based oil services firm Wellstream for $1.25 billion in cash and a special dividend. Wellstream had previously rejected an offer from GE. GE's oil and gas business had a 2009 profit of $1.2 billion on revenue of $7.7 billion. The deal to acquire the John Wood business is expected to close later this year. The purchase gives GE exposure to electrical submersible pumps (ESPs), one of the fastest growing areas of the oil services business. ESPs are used to bolster oil recovery at maturing fields. Wood Group's Pressure Control platform business will help GE meet soaring demand for services at North American shale deposits. GE said $40 billion to $60 billion could be invested in North American shale deposits over the next six years.