Schlumberger

Petroleum News Alaska Staff

?trger Ltd. said May 31 it has signed a memorandum of understanding with Baker Hughes Inc. to form a joint venture of the two companies’ seismic units, to be called Western GECO.

The creation of Western GECO is subject to completion of a definitive agreement and to regulatory and board approvals. The transaction is expected to be completed before the end of the year.

Schlumberger said the two companies would combine the seismic fleets, data processing assets, surveys and other assets of Schlumberger’s Geco-Prakla and Baker Hughes’s Western Geophysical unit to form the venture.

Terms of the agreement call for Schlumberger to pay Baker Hughes $500 million in cash The new venture will be owned 70 percent by Schlumberger and 30 percent by Baker Hughes.

Gary Jones, the current president of Western Geophysical, will be president of the venture.

The Western GECO seismic venture will have had pro forma 1999 revenue of approximately $1.5 billion.

“This is a natural alignment of two quality seismic companies with complementary markets, technologies and cultural values. The two companies share a common commitment to delivering the best possible seismic services to our customers in a safe and economical manner,” said Andrew Gould, executive vice president Schlumberger Oilfield Services. He added, “This new venture combining Geco-Prakla and Western Geophysical is expected to permit the implementation of substantial cost savings, resulting in better results than would be possible for the companies operating separately.”

Schlumberger has 55,000 employees and operations in over 100 countries. In 1999, its revenue was $8.4 billion.